The wholesale REC market

Large buyers and sellers of RECs trade through the wholesale market with minimum parcel sizes of 5,000 RECs. The price for a parcel of RECs is called the spot price. Like any other commodity the price for RECs is determined largely by supply and demand. Wholesale prices can fluctuate considerably.

Factors influencing wholesale REC prices

Wholesale REC prices are determined by the willingness of buyers and sellers to transact at a point in time. This decision and the agreed price is based on their view of demand and supply in the short to medium term.

The key factors influencing supply and demand of RECs over the next few years will be:

• Level of new renewable power project commitments  – there have not been many projects committed recently as investors are waiting on legislation for the increased MRET target
• Level of rainfall and inflow to water storages for large scale hydro – low levels of rainfall mean that storages are at record lows and the level of REC creation is not likely to be significant in the short term
• Level of solar hot water sales and installations – solar hot water RECs have grown sharply
• Green Power sales – the voluntary Green Power market has grown strongly through 2008 and created new demand for RECs beyond the mandated target. However under the proposed CPRS Green Power will no longer be relevant (refer to www.vcma.org.au).
• Government legislation implementing expanded target – the ramp up of the renewable energy target over the next few years and the penalty level are key factors influencing price outlook.

The REC buyback price

The buyback price is the price that RECs Agent/Brokers pays for RECs. It is slightly lower than the wholesale price to cover working capital, processing and administration costs usually $3 less than the wholesale price.

Installers and dealers need to ensure their customers understand that prices are subject to change.

Assigning RECs to RME Renew My Energy

You dont have to worry about the fluctuation of RECs price in the trading market. With RME all assigned RECs after installation are priced at $40/REC it is simply because RME’s RECs prices are locked in.

Getting your RECs registered & created on your own is a lengthy process (around 4 weeks) and the disadvantage is that you don’t get the “Point of Sale” discount. That means you have to pay for your system in FULL. RECs can only be registered and created once a Solar Energy System is installed by an installer who is accredited by the Clean Energy Council of Australia.

Rest assured that all RME installers are all qualified licensed electricians accredited by Clean Energy Council.