Large-Scale Generation Certificate (LGC)
A solar PV system with a capacity of more than 100kW is classified as a large-scale generator and may be eligible for LGCs. LGCs can be claimed for excess energy generation by your solar PV system.
WHAT IS LGC?
To put simply, these Large-Scale Generation Certificates (LGC) function as a form of currency for the buying and selling of renewable energy.
LGCs are part of the federal government’s Renewable Energy Target, which aims to reduce emissions in the power sector and boost renewable energy generation.
LGCs govern the exchange of electricity generated by solar systems with capacities of more than 100kW. Certificates are issued for each megawatt hour (MWh) of qualified electricity generated by a specific system or power plant.
This amount of electricity is determined on a monthly basis using a formula set by the Clean Energy Regulator of the Australian Government. This amount is utilised when claiming LGCs, which is usually done on a monthly, quarterly, or annual basis. LGCs are developed and added to the REC (renewable energy certificates) if they are considered acceptable.
LGCs can be transferred to other parties once they have been registered. They can, for example, be sold to energy retailers, who are required to buy them under the Renewable Energy (Electricity) Act of 2000. LGCs are sold in bundles of at least 5,000 certificates on the market. Buyer and seller negotiate sale prices, with value determined by supply and demand.
LGCs can be a source of ongoing revenue for firms with large-scale systems, accelerating return on investment.
WHAT IS MEANT BY LARGE-SCALE?
If the solar system is of 100kW or larger, it is counted as a large-scale generator and qualifies to claim LGCs on excess power generated by the system.
With regard to the system’s size in context, average household systems are roughly 5kW.
Access up to $50,000.00 in business solar rebates.
HOW ABOUT THE SMALLER SYSTEMS?
Many large commercial systems are sized in the 100kW range. Many of these are slightly under this size, weighing in at between 99 and 100kW, classifying them as small-scale systems. This is done because small-scale systems offer advantages of their own, even if they cannot be used for LGC trading.
They can, for example, generate small-scale technology certificates (STC). These are created in advance and are often claimed by the solar system supplier. This bonus is subsequently passed on to the buyer as a discount on the system’s price. Many organisations prefer this over generating LGCs since it helps with cash flow management early on. Financial benefits from LGCs, on the other hand, are unlikely to be immediate.
WHAT DOES THIS MEAN FOR YOUR COMPANY?
It’s probable that your business solar system qualifies for LGCs now, or will in the future. If you have more than 100kW of commercial solar, LGCs will almost certainly help you maximise your return on investment.
If you’re considering installing commercial solar, whether you include LGCs in your financial plan will be determined by your overall objectives.
To know more about Large-Scale Solar or to find out what system size is right for your business, contact the commercial solar experts at Cyanergy today.
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