What on Earth are Renewable Energy Certificates (RECs)?

When you buy a solar system in Australia you can apply for 2 upfront subsidies from the government:

(note: this all changes on July 1, 2009: read about the rebate changes here)

1. The $8000 rebate (for the 1st kW) assuming your household income is under $100k

2.Renewable Energy Certificates (RECs)- works out at $600-$1200 per kW (the price changes over time)

The concept of the rebate is easy to understand – it is simply a handout from Mr Rudd to encourage solar power (can’t argue with that!).

The concept of RECs can be a bugger to get your head around. So here is my attempt at an explanation:

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