STCs are a form of financial incentive designed to promote the installation of small-scale renewable energy systems, such as Solar PV systems, in Australia. The government creates these certificates under the Small-scale Renewable Energy Scheme (SRES) to encourage homeowners to invest in renewable energy technologies.
The number of STCs generated by a Solar PV system is based on the estimated amount of electricity it will produce over its lifetime. This estimation is determined by factors such as the size of the system, the location, and the expected Solar radiation in that area.
Homeowners have the option to claim these certificates as a financial benefit, which can help offset the upfront cost of installing the Solar PV system. Alternatively, they can choose to sell the certificates to a registered agent, who then sells them to liable entities, typically electricity retailers.
The value of STCs can fluctuate due to various factors. The market price of certificates is influenced by supply and demand dynamics, as well as government policies and regulations. Other factors that can impact the value of STCs include changes in renewable energy targets, the availability of other financial incentives, and the overall market conditions for renewable energy.
Overall, STCs provide a financial incentive for homeowners to invest in small-scale renewable energy systems by offering them a way to financially benefit from the electricity they generate. These certificates help reduce the upfront costs of installing Solar PV systems and contribute to the growth of renewable energy in Australia.