There are two main types of Renewable Energy certificates, Large scale generation certificates (LGCs) and Small scale generation certificates (STCs)
The certificates are created as part of the Federal governments Renewable Energy Target legislation, which mandates that large electricity users and generators need to generate or create green energy in proportion to the volume of electricity they deal with. Under the legislation I REC is equivalent to 1 MWh (mega Watt hour) of renewable energy production.
Each year the government sets the number of certificates required through the Office of the Renewable Energy Regulator (ORER) and
large energy generators (power stations) need to surrender Renewable Energy Certificates equal to their generation and output.
They purchase these RECS from large-scale renewable generators or small-scale generators such as solar power owners.
The price of the RECs fluctuates due to supply and demand but is generally between $20 and $40.
The amount of REC’s that can be created depends on the size of the system installed and the location of the system. Systems installed in areas of Australia that receive a lot of sun, are eligible for more REC’s as they will produce more renewable energy over its lifetime.