STCs are essentially a financial incentive for individuals and businesses to invest in small-scale renewable energy systems, such as Solar panels. The number of STCs that can be created is determined by a calculation that takes into account the expected electricity generation of the system over its useful life, which is usually 15 years.
Once the Solar power system is installed and connected to the grid, the owner can create STCs for the system. These STCs can then be sold to electricity retailers, who are obligated by law to buy a certain number of STCs each year in order to meet their renewable energy targets.
The value of STCs can vary depending on a number of factors. One major factor is the size of the Solar power system, as larger systems are capable of generating more electricity and therefore create more STCs. The current market price of STCs also affects their value. This price is influenced by supply and demand dynamics in the market.
The process of selling STCs involves registering the system with the Clean Energy Regulator, which is the governing body responsible for administering the SRES. Once registered, the STCs can be created and then sold through the STC clearing house or directly to electricity retailers.
By creating and selling STCs, Solar power system owners can offset the upfront cost of installing the system and make it more financially viable. This helps to encourage the uptake of small-scale renewable energy systems and contributes to reducing greenhouse gas emissions.