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RECS and Solar Energy

By The Axe Man - 19 November 2009 19

Hi All,

I’m hoping the wise people that read and comment on the site can explain the whole Solar Energy and RECS thing for me

Basically I’m going to build a house and have been told that I can get paid or reduce my electricity bill if I connect up solar power and feed it back to the grid.

I think I understand that part and that I get $0.50 for every  kwh I produce (if I opt into the ACT Governments Scheme for 20 years) but what I don’t understand at all is the RECS part of all of this

Are these something that I need to care or worry about?  Is it better to keep them myself or let the company I purchase the equipment off handle them?

Do I keep generating RECS or are they a 1 off thing I get when installing the unit?

The flyer I have for a particular company says that they have discounted the solar units on the assumption that I hand over the RECS I generate to them

And while I think of it if I sign up for the ACT Governments scheme to get the $0.50 do I have to be a customer of ACTEWAGL?

Any help would be greatly appreciated

What’s Your opinion?


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19 Responses to
RECS and Solar Energy
njo 6:37 pm 20 Nov 09

Humm…17k for a 2.1kW system seems pricey, unless that’s pre-rebate?

To find out more I would recommend also booking in for one of the Govt’s free Greenloans assessments – we just had one and the assessor was happy to go through our solar panel quotes with us and explain the technologies (obviously completely non-biased) and give us an idea of what we should really be paying in Canberra. Get one even if you don’t want the $10,000 interest free loan.

http://www.environment.gov.au/greenloans/

Also, someone before mentioned that the solar shop offer finance whereby they take your feed-in tariff credits to pay off your loan over 10 years. What wasn’t mentioned is that this finance loan comes with a 12.5% interest rate over the life of the loan. Over 10 years that’s a lot of interest so don’t bother – go with the Govt’s interest free loan over 4!

We’ve had most of the Canberra-based solar shops quote us – one that has stood out for us in terms of up-front service is Armada Solar because the fellow had an engineering background and was obviously very knowledgeable about their different panels and wasn’t at all pushy. That said, we haven’t decided who we’ll go with just yet – we still have a bit of learning and comparing to do 🙂

Finally, whilst the ACT is ahead of the game with the ‘gross’ feed in tariff, the others are catching up. NSW commences a gross scheme in Jan 2010 with a ‘gross’ feed-in tariff rate of 60 cents per kilowatt hour – that’s more than us!

The Axe Man 10:19 am 20 Nov 09

Thanks for all the replies guys. It’s been a great help
Just so all know, I contact the supplier I had for the quote of the system for 17k thinking that was for the 4.2kW system when it was in fact a 2.1kW system expandable to a 4.2kW

I might check out Solar Shop to see what they say

icantbelieveitsnotbu 9:22 am 20 Nov 09

Coach said :

We pay 13 cents for our electricity and get a credit of 55c for the solar energy we generate(where else in our world can you get a deal like that).

Germany… that’s where the idea came from. They started back in 2001. I think off memory Spain pay a gross system as do Japan. But you are quite right… we do have a pretty good system here.

Nick Sundance 8:27 am 20 Nov 09

have you tried http://lmgtfy.com/?q=recs solar energy ?

54-11 10:28 pm 19 Nov 09

Thanks, Che. It’s really useful being able to see what poeple are actually getting, not just what the salespeople say.

Holden Caulfield 9:46 pm 19 Nov 09

OYM said :

It’s not really ‘profit’ you are earning. The price paid is locked in for 20 years (current 50.05c I believe), so it’s not reducing…

Yeah, I know, you’ve missed my point a bit (or more likely I haven’t explained it properly), although I agree my use of the term “profit” wasn’t quite right.

The rate you are paid is currently locked in at 50.05¢ as you say (plus GST, so that’s where the 55¢ figure comes from). But with the ACT system you still actually buy the power you use before it is offset against the power you sell. Currently the price at which you buy power is 13¢. My point is the price at which you buy the electricity will only go up, whereas the price at which you sell the power your panels produce is fixed.

In basic terms the reseller will calculate how much your system will earn each year and then compare that to your annual power bills working out a figure in your favour (presumably). For simple terms here let’s call that your profit. So as the price of power goes up, your profit will reduce because your sell price remains constant.

That means if you expect to make $500 per year (or whatever) based on today’s figures, don’t expect that figure to remain constant over the life of your 20 year contract with ACTEW.

OYM 8:28 pm 19 Nov 09

Was the $5100 back when RECS were much cheaper?
What brand of panels did you get?
What brand of inverter did you get?
What warranty?

che 7:50 pm 19 Nov 09

my system cost $5100 through See Change organised bulk community buy
its 7 panels, with a 1.3kw inverter
on most days I get 8kwh of energy unless its totally overcast
even in the middle of winter

OYM 7:38 pm 19 Nov 09

It’s not really ‘profit’ you are earning. The price paid is locked in for 20 years (current 50.05c I believe), so it’s not reducing. You are still getting the same return on your investment as you did when you installed it (less repairs, maintenance & gradual degradation of the panels).

We’ve looked into it all very carefully.

$17k for a 4.2kW system sounds extremely (perhaps suspiciously) cheap to me. Prices we’ve been looking at would be much closer to $40k for that size system. A 4.2kW system should generate an annual average 22kWh per day or about $4000 per year. That’s a pretty good tax free return on your investment.

We’ve been well advised to beware of dodgy installers and second rate panels.
Japanese panels are said to be much better.

Solar Shop seems to be really good in all the dealings we’ve had with them. You get a fair bit of confidence when you realise they are in for the long haul and are prepared to finance the systems they install so they are basically paying themselves off by the income the solar panels earn offsetting your powerbill and so you pay your powerbill and it goes toward an approx 10yr repayment of the system. After that it’s all just money for jam.

A friend has just put in a 6.7kW system and his solar ‘farm’ is generating around 45kWh a day at the moment. We’ve had good sunny days recently although when the temperature gets too hot then production drops a little. He has two meters installed: his buy meter and his sell meter.

Apart from the environmental benefits, it is a great pleasure to watch your roof earning a little bit of cash each day, the solar panels provide significant shading to your roof, thus keeping your house cooler in summer, plus the installation must surely add significant value to your house – specially as electricity prices rise and people become more sensitive to the cost of power.

At up to 10% tax free return on investment guaranteed, it’s definitely worth considering.

I’m not in any way affiliated with the solar industry, and I hope this bit of info helps.

Holden Caulfield 5:13 pm 19 Nov 09

I hate to sound like an ad man, but I was at the Solar Shop thingy the other week, too. I would seriously recommend giving them a call and getting them to explain some of these things.

I went expecting their info session to be a mad con sell job. While it was that to a degree, they also seemed pretty open and honest about the basic information they supplied. I came to this conclusion through doing some simple research prior to and subsequent to attending their talk. My wife and I certainly haven’t tried to uncover every truth or untruth, but anecdotal evidence suggets we have looked into a bit more than some others we know who already have panels installed.

As to the ratings, I am a reasonably sceptical kind of guy, so I would expect the ratings given by resellers to be optimistic. By how much depends on how far the salesperson sets off your BS meter, haha. Also remember that the time of year/angle of the sun, angle of your panels, quality and age of panels will affect the efficiency of your system. Seems like no system can ever operate at 100% of its capacity, so you need to factor those issues in when calculating/predicting the amount of power you will produce.

The best advice I can give is to spend an hour or two online researching the info they have given you to see if it stacks up.

The other thing to keep in mind when doing your sums is that the rate that ACTEW will pay is locked in for 20 years (subject to government reviews). That is, the income you earn could remain capped at 55¢ (inc GST) for the 20 year contract. However, you can bet the buy rate won’t remain at 13¢ for the next 20 years. That means the “profit” you earn will reduce over time. It’s probably not a deal breaker, but something to keep in the cycnical department of your mind.

The Axe Man 3:53 pm 19 Nov 09

Yeah – the 4.2kW was very big – about 20 panels. I was quoted on the wrong system, I’ve asked for 2.1kW.
The 17k was after the rebates, without them it was about 27k

So with the quoted generation numbers does anyone know if they are over estimating or under estimating?

54-11 3:33 pm 19 Nov 09

A 4.2kW system is a very big one – depending on the panel type and house size, that could just about cover much of your house. Averages seem to be around the 2kW mark. Is that $17k net after rebates? We had an estimate of about $18k for a 2.4kW system, before rebates.

When they quote production figures, be wary of peak generation and average generation. There is not a lot of evidence available for Canberra, or at least nothing that suppliers are willing to quote.

The Axe Man 3:02 pm 19 Nov 09

Thanks guys.
So what do you expect a system to cost then?
I’ve got 1 quote for about $17,000 for a 4.2kW system that apparently produces 21kWh
That seems rather steep to me or is that pretty normal?

54-11 2:18 pm 19 Nov 09

The real con with RECs is that they are then sold on to polluters, effectively allowing them to pollute more. The dilemma you have is whether or not you retain the RECs (in which case total emissions are reduced by that amount), or sell them to the solar company to help make your system more cost-effective.

We’ve just signed up for panels and decided to sell the RECs for around $1,000, which makes the whole deal a little more affordable for us. However, our impact on global pollution is NIL.

Coach 1:26 pm 19 Nov 09

I sat in on a really informative seminar 2 weeks ago which went through it all.

The ACT has the most generous scheme in Australia for the feed in tariff, so it makes more financial sense here than anywhere else.

We pay 13 cents for our electricity and get a credit of 55c for the solar energy we generate(where else in our world can you get a deal like that). The difference is that in the ACT, it is paid on your gross tariff (everything you generate) while elsewhere in the country, it is paid on the net (What you generate less what you use yourself).

Renewable Energy Certificates RECS, are granted when you install solar panels, and these have a monetary value which can be traded, like shares. The solar company will give you a credit off the purchase price of your panels and inverter, in return for your RECS, and then trade them in bulk. It is hard to trade them individually.

RECS are a one off credit, based on an assumed life of your panels.

I assume you would have to be an ACTEWAGL customer.

You can also get a Green Loan from the government ($10,000 interest free – but it has to be repaid within 4 years) to buy the solar panels.

I was given this information at The Solar Shop seminar. They were very professional. I was impressed.

Hope that helps.

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