STCs are a type of renewable energy certificate (REC) that is specifically designed for small-scale renewable energy systems. The scheme was introduced as a part of the Australian government’s efforts to promote the adoption of renewable energy sources and reduce greenhouse gas emissions.
Under the STC scheme, individuals and businesses are eligible to receive a certain number of certificates based on the size and location of their small-scale Solar, wind, or hydro system. The number of certificates is determined by the amount of renewable energy that the system is expected to generate over a period of 15 years, compared to the average electricity consumption of a household or business.
These certificates can then be sold to electricity retailers, who have a legal obligation to purchase a certain amount of them each year. The price of STCs is determined by supply and demand factors in the market, and it can fluctuate over time.
By selling the STCs, individuals and businesses can receive a financial incentive that helps to offset the upfront cost of installing a small-scale renewable energy system. This makes renewable energy more affordable and encourages more people to invest in these systems.
The STC scheme is administered by the Clean Energy Regulator in Australia, and it is an important part of the broader Renewable Energy Target (RET) policy. The RET aims to ensure that 33,000 gigawatt-hours of Australia’s electricity comes from renewable sources by 2020.
Overall, the STC scheme provides a financial incentive for individuals and businesses to invest in small-scale renewable energy systems, which helps to reduce greenhouse gas emissions and promote the transition to a more sustainable energy future.