Renewables Obligation Certificates (ROCs)

Sounds complicated, but isn't really. ROCs were dreamt up as part of the Renewables Obligation to reward people who produce renewable energy with extra cash. All suppliers (eg npower or British Gas) must get a percentage of the electricity they sell to you from renewable sources. In 2005/06 this was set at 5.5% and the idea is that is rises gradually to be 10% in 2010, and 15.4% in 2015/16. 

 

How it actually works

Renewable energy generators (and this could include you with your mini-turbine) are awarded 2 ROCs for each MWh of renewable electricity they generate. At the end of each year, the energy suppliers can either present enough certificates to cover the required percentage of their renewable energy, or they can pay a ‘buyout’ price for any shortfall (£37.19 per MWh for 2009-10, up from £35.76 in 2008-09). The proceeds from these payments are then divided up between the renewable generators in proportion to the number of ROCs they originally cashed in. For example in 2004/05, £13.66 was returned per ROC.

 

What is it intended to do?

Because renewable energy is currently quite expensive to generate, the Renewables Obligation is designed to make it more economic to generate renewable energy, as by selling their ROCs, renewable generators have an additional source of income.

 

So how much is a ROC worth?

One ROC is worth around £30 (although the price fluctuates), and you’ll get issued 2 ROCs for every MWh (which is the same as 1000 kWh or 1000 units of electricity) your system produces.

 

How do I sell my ROCs?

There is a fair bit of paperwork involved, so most households who export to the grid choose an energy supplier, or another intermediary who deals with the admin on their behalf. Good Energy and Ecotricity offer this service, as do many of the other energy companies. Paul at Alternative Energy is going through the process of selling his ROCs, via Scottish and Southern, follow the link to his pages to find out more. There is also more about trading your ROCs here.

 

2009 update:

  • Good Energy will now pay 15p per kWh for all electricity from renewable energy systems up to 6kW, including small wind turbines and solar PV systems (previously 10p per kWh). This rate will also apply to energy you consume yourself, so not only will you save the cost of paying for the electricity, but you will earn 15p per kWh as well.  
  • Scottish and Southern pay 28p per kWh for all energy generated by a small scale solar PV system and exported to the grid. Ideal if you're not at home using electricity during times of peak demand.

 

More info:

More information on ROCs can be found on the BIS website and through OFGEM who regulate the RO, in particular their guidance for microgenerators (under 50kW or less) contains more detailed information on ROCs.