REC (Renewable Energy Certificate)

Written and checked by the Energy Merchants desk · Reviewed 2 October 2026

REC stands for Renewable Energy Certificate. In Australian law it is the umbrella term for the certificates created under the Renewable Energy Target: Large-scale Generation Certificates (LGCs) and Small-scale Technology Certificates (STCs). Both are denominated in megawatt-hours and both are held in the REC Registry.

In practice

Installers use “REC” in three slightly different ways, and it pays to notice which.

1. As the umbrella. “We trade RECs” can mean any federal certificate.
2. As shorthand for STCs. Many people on the tools say “RECs” when they mean the STCs on a solar job.
3. As a company name. REC Traders, the certificate trader behind Energy Merchants, has traded since 2004, which is part of why the term sticks.

When you write a contract, ask a trader for a rate, or read a regulator notice, use the specific name. An STC is not an LGC and the two are priced very differently. At the time of writing STCs trade around $38 to $40 and LGCs around $6 to $9 in September 2026.

The word REC also appears in the REC Registry, the system that holds the certificates.

Common confusion

In other countries, REC usually refers to voluntary renewable energy certificates sold to companies that want to claim green power, such as in the US. In Australia the term is a compliance term under the RET, and it is not the same as a voluntary GreenPower purchase.

Batteries under the Cheaper Home Batteries Program also create STCs, so they sit under the REC umbrella, but the Victorian VEEC and NSW ESC are state certificates and are not RECs.

See the certificate trading glossary for the full vocabulary, and STC trading or pricing for the certificates most installers sell.