A power purchase agreement (PPA) is a contract to buy electricity from a specific project at an agreed price. It is not automatically a green claim. In Australia the renewable attribute of the electricity is carried by the certificate, so whoever holds and retires the LGC is the one who can say the power was renewable.
Why the PPA alone is not enough
The energy and the environmental attribute can be separated. A generator can sell the electricity under a PPA and sell the LGCs to someone else, or surrender them to a retailer. If that happens, the PPA buyer has bought power with no claim. For corporate reporting and for sustainability commitments, this is a trap.
What a proper claim needs
- The certificates are included in the PPA. The contract should state that LGCs for the contracted generation transfer to the buyer.
- The LGCs are transferred to the buyer’s registry account. See the registry transfer process.
- The buyer retires them voluntarily. Retirement takes the certificates out of circulation so they cannot be resold or surrendered by someone else.
- Volumes line up. MWh consumed under the PPA should match the number of LGCs retired for the period.
Behind-the-meter and onsite PPAs
An onsite solar PPA for a business rooftop can create LGCs if the system is above 1 MW and accredited, or STCs if it is 100 kW to 1 MW from 1 October 2026 (the pillar page for that is mid-scale solar STCs). Note that STCs are surrendered for the retailer obligation, so the owner of a system that earned STCs generally cannot also claim 100% renewable electricity for the same generation. See who owns the certificates in a PPA for how contracts usually handle this.
After 2030
LGC creation is tied to the RET, which runs to 2030 with no scheduled extension. Voluntary demand and the Guarantee of Origin scheme may continue after: see LGCs after 2030 and the REGO explainer.
What this means for businesses and installers
If you sell solar to commercial customers on PPA or lease structures, be clear about who gets the certificates and what claim the customer can make. Compare contract types in commercial solar PPA versus buying outright. For per-kWh pricing context see solar PPA rates. Settlement desks like ours handle STCs, so for certificates on smaller systems see how it works and pricing.