STCs are a way for the government to incentivize the adoption of small-scale Solar systems by providing financial benefits. The number of STCs awarded to an installation is determined by various factors such as the size of the system, its location, and the expected electricity generation over its lifetime.
When a small-scale Solar system is installed, the owner can create STCs equal to the system’s expected electricity generation over a certain period, usually 15 years. These STCs can then be sold on the open market to electricity retailers or other entities that have an obligation to meet renewable energy targets.
The price of STCs fluctuates depending on market demand and supply. Generally, the more STCs available, the lower the price. By selling the STCs, the system owner can offset the upfront cost of the Solar system, making it more financially viable for them.
STCs are part of the government’s Renewable Energy Target (RET) scheme, which aims to ensure that 20% of Australia’s electricity comes from renewable sources by 2020. STCs provide a way for individuals and businesses to contribute to this target and receive financial benefits in return.
It is important to note that the STC system is subject to change, and the government periodically reviews and adjusts the number of STCs awarded based on various factors such as the state of the renewable energy market and the progress towards meeting the RET.