Australia's Renewable Energy Target Explained: How the RET, LRET and SRES Affect Your Solar Decision

The RET was originally a single scheme created under the Renewable Energy (Electricity) Act 2000. It started in 2001 as the Mandatory Renewable Energy Target (MRET), requiring a modest 9,500 GWh of additional renewable generation by 2010.

In 2009, the target was ramped up to 41,000 GWh by 2020. But then something unexpected happened: rooftop solar took off far faster than anyone predicted. The flood of small-scale certificates started overwhelming the market, making it harder for large-scale projects to compete. So in January 2011, the government split the RET into two separate schemes:

Every time an accredited wind farm or solar farm feeds one megawatt-hour of electricity into the grid, it creates one LGC. These certificates get sold on the open market to electricity retailers who need to meet their annual surrender obligations.

The LRET target was set at 33,000 GWh per year from 2021 through 2030 (reduced from the original 41,000 GWh trajectory after the 2014 Warburton Review). That target was met ahead of schedule in January 2021, and large-scale renewables have continued growing well beyond it.

In the second quarter of 2025, large-scale renewables hit a record 27.7% of all electricity in the National Electricity Market, totalling 14.9 TWh. Wind contributed 7.6 TWh, hydro 3.7 TWh, and utility-scale solar 3.6 TWh. A record 14.2 million LGCs were created in Q1 2025 alone.

The SRES is the half that directly puts money in your pocket. When you install solar, your system earns STCs based on its size, your location (sunnier zones earn more), and how many years are left in the scheme. Your installer trades those certificates and gives you the value as an upfront discount on your system price.

We've written a detailed SRES explainer that walks through the formula, zone ratings, and deeming period schedule. The key thing to know here is that the SRES uses a countdown. Your system is credited upfront for all the energy it's expected to generate between now and December 2030. As the end date gets closer, the credit gets smaller.

In 2026, a standard 6.6kW system in Zone 3 (Sydney, Brisbane, Perth, Adelaide) earns roughly 45 STCs, worth about $1,800. By 2029, that same system would only earn 18 STCs, worth about $720. The rebate phase-out schedule has the full year-by-year breakdown.

Both the LRET and SRES are legislated to end on 31 December 2030. After that, no new certificates can be created. Final reporting and surrender obligations will wrap up in 2031.

For large-scale generators, the LGC surplus and declining prices mean the LRET is already becoming less relevant as a revenue driver. Many new projects are being built on the back of power purchase agreements (PPAs) and state-based schemes rather than relying on LGC revenue.

For homeowners, the end of the SRES means the upfront solar rebate disappears entirely. There's no replacement scheme currently announced at the federal level. State rebates vary and change frequently, so it's worth checking what's available in your state right now.

The good news: solar panel prices have dropped so dramatically over the past decade that systems are already cost-effective without any rebate. The rebate just makes an already good investment even better. If you're weighing it up, our STC calculator shows exactly what the rebate is worth for your postcode, and our analysis of whether solar is still worth it runs the full numbers.