STCs were introduced as part of the Renewable Energy Target (RET) scheme in Australia. The aim of the scheme is to encourage the uptake of renewable energy and reduce greenhouse gas emissions.
Under the STC scheme, individuals and businesses who install eligible small-scale renewable energy systems are entitled to create a certain number of STCs. The number of STCs depends on the amount of renewable energy the system is expected to generate over its lifetime, as well as the location of installation.
STCs are created at the time of installation and can be sold or traded to electricity retailers, who are required by law to purchase a certain number of STCs each year. The value of STCs fluctuates based on supply and demand, which means that the financial incentives received can vary over time.
By selling or trading the STCs, individuals and businesses can reduce the upfront cost of installing a renewable energy system. The value of the STCs is typically deducted from the total cost of the system, making it more affordable for consumers.
It is important to note that the STC scheme is subject to certain regulations and requirements. Installations must meet specific criteria to be eligible for STCs, and installers must be accredited by the Clean Energy Regulator. Additionally, the STC scheme is subject to periodic reviews and adjustments, so it is important to stay informed about any changes in the scheme.
Overall, the STC scheme provides a financial incentive for individuals and businesses to invest in renewable energy systems such as Solar panels. By reducing the upfront cost of installation, the scheme helps to promote the adoption of clean and renewable energy sources, contributing to a more sustainable future.