Renewable Energy Certificates (RECs) are tradeable certificates that are created by the generation of renewable energy, which is defined in the legislation. Each REC is equal to 1MWh. Solar farms, wind farms, landfill gas plant, rooftop solar PV systems, Solar Hot Water systems, etc. they can all create RECs. RECs are classed into two categories, Large Generation Certificates (LGCs) and Small Technology Certificates (STCs). STCs apply to renewable power systems below 100kW in size. STCs have the advantage of being able to produce RECs before actual renewable energy production. Estimated production to 2030, up to a maximum of 15 years, is brought forward to create STCs, which are submitted by solar system suppliers to the Government for rebate. This rebate accounts for nearly half the cost of the solar PV system currently. The bigger the rooftop solar system, the more STCs created. Unlike LGCs, the STC price is stable because there is no limit to STC production. All electricity retailers in Australia are charged the cost of all STCs produced nation-wide, this cost being the Federal Government’s price cap on the STC. LGCs, on the other hand, are limited by numbers each year and to a total of 31,000GWh by 2020. Annual numbers are determined by the Federarl Government by requiring electricity retailers to have at least a percentage of renewable energy in their sales portfolios. If they don’t have enough renewable energy, they must buy LGCs to make up the difference. The price for LGC therefore can vary significantly with supply and demand conditions. LGCs are traded in the open market.