The Renewable Energy Target, or RET, is a piece of policy that most Australians have never heard of and almost all of them have paid for. It sits on every electricity bill as a small component of the cost of power, and it is the reason a rooftop solar system comes with a certificate discount. It is also the reason STCs and LGCs exist, and why both stop mattering after 2030.
This article explains what the RET is, how its two halves work, what the key numbers mean and what comes next. It is a plain-language overview, not legal advice, and where a figure is reported, we say so.
One target, two schemes
The RET is a single legislative scheme with two parts, each with its own certificate:
| Large-scale RET (LRET) | Small-scale Renewable Energy Scheme (SRES) | |
|---|---|---|
| Covers | Accredited power stations: solar farms, wind, hydro and others | Rooftop solar, solar hot water, heat pumps, and since 2025 home batteries; from 1 October 2026 mid-scale solar up to 1 MW |
| Certificate | LGC, one per MWh generated | STC, created up front from a deemed output |
| Target | Fixed 33,000 GWh a year to 2030 | No fixed cap; demand follows supply |
| Price | Market-set, no ceiling | Market-set, with a $40 clearing house backstop |
| Obligation set by | Renewable Power Percentage | Small-scale Technology Percentage |
You can see the two halves in the LGC glossary entry and the SRES definition.
The large-scale half
The LRET is a fixed target. The annual target rose to 33,000 GWh by 2020 and has been constant ever since, to 2030. Accredited power stations create one LGC for each MWh of eligible generation. Liable entities must surrender enough LGCs each year to cover their share, set as a percentage of the electricity they acquire.
The percentage is the Renewable Power Percentage (RPP), published by the Clean Energy Regulator each year. For 2026 it is 16.67 percent. So a retailer acquiring 1,000 MWh surrenders about 167 LGCs. At $8 an LGC that is $1,336, or $1.34 per MWh. At the $45 seen in 2023 the same obligation cost $7.50 per MWh.
Because the target is fixed and the market now has more certificates than it needs, LGCs have been oversupplied and cheap in 2026, roughly $6 to $9 in September. See why LGC prices are falling.
The small-scale half
The SRES has no fixed cap. Any eligible small system creates STCs, and liable entities must surrender enough to cover their share, set by the Small-scale Technology Percentage (STP), reported at about 11.67 percent for 2026. The Clean Energy Regulator sets it from its forecast of how many STCs will be created, so the market balances through the percentage rather than through a fixed quantity.
A $40 clearing house gives sellers a backstop. See the STC Clearing House guide. STCs are created up front on a deeming period, which shortens each year to one year in 2030, and the scheme ends on 31 December 2030.
For the arithmetic, a 6.6 kW system in a zone 3 postcode creates 45 STCs in 2026 (6.6 x 1.382 x 5), about $1,755 at $39. A retailer with 1,000 MWh of liable acquisitions surrenders about 117 STCs, around $4,550 at $39, which is $4.55 per MWh. Add the LRET cost at 2026 prices and the total scheme cost is about $5.90 per MWh at an $8 LGC, against about $12 per MWh when LGCs were $45.
The 2026 change: mid-scale solar
From 1 October 2026, the SRES extends upward. Systems above 100 kW and up to 1 MW installed from that date create STCs with a fixed five-year deeming period, instead of LGCs. The Renewable Energy (Electricity) Regulations were amended in 2026, and the CER has said applications open mid to late November 2026. Below 100 kW nothing changes, and above 1 MW remains in the LGC scheme. A 500 kW system in zone 3 creates 3,455 STCs, about $134,700 at $39. The policy moves a slice of commercial solar from the slow, cheap LGC route to the up-front STC route. See mid-scale solar STCs and the installer guide to selling commercial solar.
RET and the 82 percent goal
People confuse the RET with the government’s goal of 82 percent renewable electricity by 2030. They are different things. The RET is legislation with fixed targets and a certificate mechanism. The 82 percent figure is a policy goal for the share of renewable generation in the grid, and it is not itself the RET. The RET’s 33,000 GWh target has effectively been exceeded, which is why LGC prices are low, and the push toward 82 percent relies on other tools, notably the Capacity Investment Scheme and state programs.
What replaces the RET
The RET ends in 2030. The Guarantee of Origin scheme began on 3 November 2025 and issues Renewable Electricity Guarantee of Origin (REGO) certificates, which can be time-stamped, are available to batteries and hybrid projects and continue beyond 2030. REGOs initially sit alongside LGCs. Market participants widely expect them to become the main instrument after 2030, but details of how demand will be created may change, so check the Department and the CER.
For households, the end of the SRES means the end of the up-front STC discount for new small-scale installs after 31 December 2030. Our guides on the schedule to 2030 and the SRES wind-down cover that.
From the desk: the easiest way to keep the two halves straight is by how the money arrives. An STC is paid up front for a deemed future output, so the value reaches you at installation. An LGC is paid as the generation happens, so the value dribbles in over years. If a customer asks which one their system will create, ask for the size and the install date first.
Who pays for the RET
Retailers must surrender certificates, and the cost is passed through in electricity prices. That is why the RET is a hidden line on a bill. A household’s share is small in dollar terms, and falls when certificate prices fall.
Why the RET matters to installers
Installers deal with one half of the RET at the front door and almost never see the other. But the large-scale half sets the tone for the whole certificate market. When LGCs collapsed, it showed what happens to a certificate market that has more supply than demand, and it prompted the policy change that moved mid-scale solar into STCs. It also frames the end date: the RET ends in 2030, and everything built on it, including the STC discount and the deeming ratchet, ends with it. Our answers on STCs versus LGCs and large-scale generation certificates explain the contrast for customers.
What to do next
- Work out which half your system sits in, using size and install date.
- Read the answer on LGC versus STC if you are comparing.
- Check the scheme-change pillar at /stc-trading/scheme-changes/.
- For small-scale selling, see the pricing page and how it works.