What is a Renewable Energy Certificate (REC)?
To start, let’s understand what exactly Renewable Energy Certificates (REC) are and how they work in Singapore.
If we had to give you a one-liner explanation, RECs are essentially tradable assets that quantify the energy generated by renewable energy sources like solar panels and wind turbines. Now, you may say “that is terribly vague”, don’t worry, we’ll get into specifics!
To set the record straight, acquiring a REC is not the same as buying electricity. Instead, it merely represents purchasing the clean energy attributes of renewable electricity. One REC is produced when a renewable energy source — like the solar PV system on a rooftop — generates 1 megawatt-hour (MWh) of electricity. It helps to certify that the owner of the REC also owns 1MWh of clean electricity. Companies often buy up these certificates as a form of carbon credit to offset their carbon emissions and meet their sustainability targets.
While the prices of RECs fluctuate based on demand and supply, they usually fall within a set range. As of mid-2021, the price of 1 REC in Singapore can fetch between US$5 and $20. If you’ve made the right calculations, getting RECs can be one of the top solar financial benefits in Singapore!
How are RECs tracked?
Each REC is unique. They each have serial numbers and usually also contain relevant information like the time period of generation – also known as “vintage” of generation – the power generation source and the type of renewable resource. RECs that have been sold are accounted for and cannot be purchased again.
RECs are certified by registries. They ensure that the registration and tracking of RECs meet international quality standards in a transparent, secure and reliable way. This eliminates any chances of double claiming or double counting.
Some countries do have their own national-based systems. That said, the 2 main REC registries recognised in Southeast Asia are The International REC Standard Foundation (I-REC Standard) and Tradable Instruments for Global Renewables (TIGR) by APX.
Get Help with Selling REC in Singapore
The process of getting RECs and then selling them in Singapore can be complicated and complex. There are many steps and costs involved that you’ll have to navigate through carefully to ensure that selling RECs is cost-effective and worth the effort — we’ll take a look at the process below!
Confused about the REC registration and trading process? Fret not. Solar AI Technologies is here to help! Reach out to us anytime and we’ll be happy to guide you through the entire REC process.
Buying and Selling RECs: The Entire Process
Now that you understand what RECs are and how they are secure, the next question would be “how do I trade RECs?”. We’ll take a look below!
Before going into the trading process, it’s important that you understand some key terms.
Registrant: Individuals or organisations that register their renewable energy assets with REC registries.
Issuer: Government agencies or independent entities that control the registration of renewable energy assets. They oversee and verify energy data reporting and issue RECs based on how much clean energy is reported. Issuers act as an intermediary between registries and registrants to ensure that renewable energy generated is legitimate and valid. In Singapore, SP Group is the issuer for I-REC, while T-RECS.ai is the issuer for TIGR.
We’ve also included a table below with all the prices and charges involved in the entire REC registration and trading process for easy reference and comparison. Be sure to refer back to this table while reading!
|RECs Registry||TIGR (Click here)||I-REC (Click here)|
|New Account Registration||US$0||S$0|
|Revenue Class Meter||S$300 – S$800/meter|
|Asset Registration Fees (by Solar Panel System Size)|
|< 250 kWp (TIGR) | < 300 kWp (I-REC)||US$100/year||S$75/year|
|250 kWp (TIGR) | 300 kWp – 1 MWp (I-REC)||US$200/year||S$220/year|
|1 MWp – 10 MWp (TIGR) | 5 MWp (I-REC)||US$500/year||S$450/year|
|> 10 MWp (TIGR) | 5 MWp (I-REC)||US$1,000||S$520/year|
|REC Registration / Issuance Fee||US$0.040/MWh||S$0.038/MWh|
|Sales Transaction Fee||10.00%/transaction (US$)||S$0.900/MWh|
|Withdrawal Service Fee||2.00%/transaction (US$)||N/A|
|REC Redemption Fee||US$0.040/MWh||S$0.100/MWh|
Next, into the tough part. Overall, the REC procurement and trading process can be quite complicated. There are also differences between the 2 registries, but we’ll seek to simplify everything into 6 clear steps.
1) Create a Registrant Account with the Registry
The first and most easy step. If you’re a renewable energy asset owner, you’ll need to set up a registrant account with the registry of your choice to gain access to the registry. The application is usually free of charge.
2) Register your Renewable Energy Asset
The next step will be registering your renewable energy asset with I-RECs or TIGR — in Singapore this would likely refer to your solar panel system. Renewable energy asset registration is a one-time process and needs to be completed by the registrant. This can be done by either the asset owner or a third party on behalf of the owner — an “Owner’s Declaration Letter” will be required — and is usually valid for 5 years.
To prepare for the registration, you’ll need to gather some essential details. These include your asset’s address, coordinates, installed capacity and date of commissioning. You’ll also need to allow the issuer to inspect your solar PV system and verify energy generation data from time to time. An asset registration fee will be charged at this juncture as well.
Fun Fact: Renewable energy assets are also often called “energy production devices”.
3) Register for REC in Singapore based on Electricity Production
Once you’ve created your registrant account and validated your renewable energy asset, you’ve completed all the prerequisites and you’re ready to work with RECs! These certificates are often registered on a periodic voluntary basis which can range from once a month to even once a year, based on the amount of renewable energy generated in that period. You’ll also need to reapply for new RECs at the end of each electricity generation period.
For RECs to be issued, you’ll have to submit your renewable energy asset’s electricity production data and allow it to be audited by an issuer. REC issuers generally also conduct frequent audits to ensure electricity production data is accurate. On top of that, some registries may also have certain electricity production data tracking requirements that you’ll have to adhere to. For example, most registries require a revenue-grade meter — also referred to as an Advanced Metering Infrastructure (AMI) meter — to be installed at a solar asset’s point of generation. The price of these meters can range from S$300 to S$800 for a residential solar system.
That said, you can also choose not to install a revenue-grade meter and use your electricity bills as proof of energy generation. However, the downside to this will be that you’ll only be able to register for RECs based on exported clean energy, and not for all the renewable energy generated by your solar panel system.
Pro Tip: We recommend finding out when large companies release their sustainability spending reports — usually released in tandem with their financial reports. As a rough gauge, this is often done quarterly and demand for RECs is likely to be higher in the weeks leading up to the release of these reports. With that in mind, applying for RECs around these time frames will make it a lot easier to sell them.
Note: The maximum registerable period of generation or “vintage” of generation period is 2 years.
4) Issuance of REC
The issuance of RECs is almost always done together with REC registration. Upon electricity production data verification, RECs will be issued to you for the relevant application period and created in the registry’s system. You’ve finally gotten your RECs!
Once you’ve received your RECs, there are 2 ways to store them: with a trading account or with an issuer. If you decide to open a trading account with a registry, you’ll be able to hold, trade and subsequently redeem the issued RECs on your own. This will help you reduce sales transaction fees and withdrawal charges. That said, this can be a rather costly option to go with if you’re only planning to sell a small number of RECs. For instance, the trading account opening fee for I-REC is €500 and a subsequent €2,000 is charged yearly to maintain the account.
Planning on only getting RECs for your residential solar PV system? We’d recommend storing your RECs with an issuer in Singapore instead! You’ll be able to do this either via SP Group or T-RECs.ai. Keeping your RECs in their trading accounts will incur some charges, but this will be significantly lesser than what you’ll need to open your own account.
5) Trading REC in Singapore
Now, onto the main reason for getting RECs: selling them. If you’ve got your own trading account, you’ll be able to go ahead and move, trade and sell your RECs as you wish!
Meanwhile, REC issuers in Singapore often provide internal trading platforms for you to sell your RECs. SP Group and T-RECs.ai both provide marketplaces to connect REC sellers with buyers. That said, it’s important to also note that the tradable RECs market is still very much in its infancy. Therefore, these transactions and prices are often not fully transparent. These marketplaces also lack real-time trading capabilities and most transactions being done manually.
Note: A sales transaction fee is applicable for SP Group and T-RECs.ai marketplace transactions. For SP Group, this is currently $0.90/MWh, while T-RECs.ai charges a 10% transaction fee based on the price of the REC.
6) Redemption and Retirement of REC
Most of the complicated steps are out of the way now. The process involved in redeeming RECs is a pretty straightforward one. Once purchased, RECs will be transferred into a redemption account. At the same time, these RECs are also then retired to remove them from circulation. If you sell through a REC issuer, the issuer will handle this process on your behalf!
Once this is done, REC buyers have the right to claim that they’ve used a volume of renewable energy that is equivalent to the number of RECs that they’ve bought. REC redemption is usually done by companies to meet their sustainability goals.
Note: There is also a small redemption fee involved in this process. I-RECs charges S$0.10/MWh redeemed, while TIGR charges USD$0.04/MWh redeemed.
Still unsure about the REC registration and trading process? Don’t worry. Contact us anytime and let us assist you with monetising your solar assets!
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