As part of Australia’s review process of the Renewable Energy Target (RET) scheme, the Council of Australian Governments (COAG) are currently examining some of the eligibility provisions of the RET for micro generation and is inviting industry and individuals to comment.
The COAG Renewable Energy Sub Group has released a discussion paper seeking stakeholder input on the treatment of Solar Credits related Renewable Energy Certificates under the RET.
The Solar Credits scheme works on a multiplier system; issuing extra Renewable Energy Certificates (RECs) for each megawatt hour a system is capable of producing. The extra RECs allow for increased rebates on residential and business solar power systems, without which, the acquisition of a system may not be affordable.
While the Solar Credits program is certainly boosting the uptake of grid connect systems in Australia; by providing multiple RECs for each megawatt-hour, Solar Credits create RECs that are not backed by actual generation, referred to as “phantom RECs”. As such, critics state that RECs created by the multiplier under Solar Credits will lead to less actual renewable generation than would otherwise occur.
The COAG review is considering whether to increase annual targets to offset these additional RECs created by the Solar Credits multiplier. While it may seem a simple and straightforward thing to do, according to the discussion paper increasing the annual targets would also increase the costs of the Renewable Energy Target for liable parties as it would increase the number of RECs that these liable parties need to acquire under the RET. This would have a flow-on effect to households, businesses and other electricity consumers in the form of higher electricity prices.
The discussion paper, submission guidelines, templates and further details can be viewed here. Submissions are due by close of business 28 January 2010.
