Most installers meet the RET as a line on a quote: the STC discount. Behind that line sits a legal obligation that gives certificates their value.
The Renewable Energy Target in brief
The RET began in 2001 as the Mandatory Renewable Energy Target and was expanded in 2009. In 2011 it was split in two. The Large-scale Renewable Energy Target (LRET) rewards power stations with large-scale generation certificates (LGCs) and was set at 33,000 GWh of extra renewable generation a year by 2020. The Small-scale Renewable Energy Scheme (SRES) rewards households and businesses for small systems with small-scale technology certificates (STCs), and it has no fixed cap on certificates.
How the STC obligation works
Every year the Clean Energy Regulator sets the small-scale technology percentage (STP). It is set from the forecast of certificates that will be created that year: the more STCs expected, the higher the percentage. For 2026 it is 11.67% (see the creation forecast).
Liable entities, mostly electricity retailers, multiply the electricity they acquire by the STP to find how many STCs they owe. They must surrender those certificates to the CER every quarter. Miss it and they pay the shortfall charge, which is why demand for STCs is steady. The cost of the obligation is passed through to power bills.
If retailers cannot find certificates on the market, they can buy from the STC Clearing House at a fixed $40 each (excluding GST). That is why the spot price rarely exceeds $40, and why it has traded roughly $38 to $40 at the time of writing.
SRES versus RET: the difference in one table
| SRES (small-scale) | LRET (large-scale) | |
|---|---|---|
| Certificate | STC | LGC |
| Created by | Rooftop solar, batteries, hot water, heat pumps | Power stations |
| Retailer surrender | Quarterly | Annually |
| Scheme end | 31 December 2030 | 2030 |
Where installers fit
An installer does not take on any of this obligation. You create STCs (or assign the right to create them) when you install an eligible system, and sell them to someone who sells them on to retailers. Your job is accurate claims. The retailer’s job is surrender. Everything in between is the market.
What this means for you
Learn the vocabulary once: RET, SRES, STP, liable entity, clearing house. Then read the SRES explained for the scheme rules, the STC trading pillar for how certificates are sold, and how it works for how our desk settles them. For the history, see STC scheme history.