STCs are a mechanism under the Australian government’s Renewable Energy Target (RET) scheme, designed to encourage the uptake of small-scale renewable energy systems. These certificates are created for eligible installations and can be sold or traded to liable entities, such as electricity retailers, to help them meet their renewable energy obligations.
The number of STCs an installation can create is determined by the amount of electricity it is expected to generate over a set period, known as the deeming period. The deeming period for small-scale Solar systems is 15 years. The calculation takes into account factors such as the system’s location, its capacity, and the amount of electricity it is expected to generate based on historical weather data.
The market price of STCs is not fixed and can fluctuate based on demand and supply dynamics. The price is influenced by factors such as government policy changes, installation rates, and the overall supply of STCs in the market. As the market price of STCs increases, the financial incentive for installing small-scale renewable energy systems also increases. Conversely, if the market price decreases, the financial incentive decreases.
The financial benefit of STCs for Solar panel installations can vary depending on the size and location of the system, as well as the prevailing market price of STCs. It is important to note that the value of STCs is separate from any savings on electricity bills that may result from using Solar energy.
To claim STCs, the installation must be undertaken by an accredited installer, and the system must meet certain quality and safety standards. The process involves the creation and assignment of STCs, which are then transferred to liable entities for compliance purposes.
Overall, STCs provide a financial incentive to encourage the adoption of small-scale renewable energy systems, such as Solar panels, by reducing the upfront cost of installation.