New RECS Scheme and Solar Credits now on - Don't be afraid of RECS but watch the fine print...
Consumers should not be concerned about the fluctuating market price of RECs (Renewable Energy Certificates) when considering buying a solar electrical system – but they do need to watch the fine print, said ODG National Services Manager Mr Andrew Cross.
Mr Cross was responding to the Federal Government announcement today that the RECs scheme is available from today for Australians installing rooftop solar panels, and is to be backdated to 9 June when the last rebate scheme closed.
Solar Credits were part of the Renewable Energy Target (RET) legislation, passed by the Parliament on 20 August, said Climate Change Minister, Senator Penny Wong, Under the RET, electricity retailers are required to purchase Renewable Energy Certificates, known as RECs.
This is good news for ODG, as one of the premier national installers for Origin Energy solar rooftop panels, as it now opens the subsidy support door to $100,000+ p.a. households, who can potentially secure between $4000 and $6000 for their solar panel installations, depending on location and unit Kw size, said Mr Cross.
As Mr Cross points out: “Whilst the subsidy incentive for a household earning less than $100k a year isn’t quite as high as it was through the old means-tested system, what this new legislation has done is made solar a much more attractive choice for those households bringing in more than $100k in a year, and we’re expecting a rush of orders once this message has filtered through to the public.”
In Senator Wong’s statement, she said that through Solar Credits, households installing rooftop solar panels can receive five times as many RECs for each megawatt-hour of solar energy produced by their solar panels. For example, based on a REC price of $40, a 1.5 kilowatt solar panel system installed in Sydney would receive $6200. Based on a REC price of $50, the same system would receive $7750. “Solar Credits will significantly reduce the cost of going solar at home,’’ Senator Wong said.
“Although the price of RECs will rise and fall in line with market demand reputable solar companies will provide a fixed price at the time of purchase. Major companies such as Origin Energy are actually guaranteeing the price of their systems on the day of purchase,” said Mr Cross.
Mr Cross said although consumers had the option to keep the RECs instead of taking them in the form of the scheme’s subsidy it was a complex process and major companies were better suited to trading in large numbers on the exchanges.
“Consumers don’t need to watching the market price for the right opportunity to buy to receive the maximum discount if the price is locked in with your supplier when you purchase,” he said.
“In other words watch the small print to ensure that the price paid does not vary in line with the market value of RECs” Mr Cross said.
He said the major electrical retailing companies had a huge appetite for RECs due to the recent legislation requiring 20% of energy to be generated from renewables by 2020.
“Smaller companies may collect the RECs and trade them but they then become very exposed to market fluctuations that could have a detrimental impact on their business and the ability to deliver,” Mr Cross said.
He said the price paid for the RECs is determined at the time of the completed installation if the price was not guaranteed.
“For post September 1st orders, not those ordered before the previous scheme was withdrawn, there could be a risk that consumers are exposed to the market fluctuations and are not aware of it.” Mr Cross said.
Mr Cross said it also may take some time for consumers to adjust to the fact that the subsidies – although now available to everyone, regardless of household income – had fallen from $80000 to around $4000.-$6000
ODG is currently the national installer for Solar Panels for Origin Energy.
O’Donnell Griffin is part of the Electrical & Communications division of Norfolk, an ASX listed company.
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