The purpose of STCs is to provide financial incentives for the installation of small-scale renewable energy systems, such as Solar panels, in Australia. By creating a market for these certificates, the government aims to increase the uptake of renewable energy and reduce greenhouse gas emissions.
The number of STCs that a Solar panel system is eligible for is determined through a formula that takes into account factors such as the location’s Solar radiation levels, the system’s efficiency, and the time period over which the energy is expected to be generated. This information is used to calculate the expected amount of renewable energy that the system will produce over its lifetime.
Once the STCs are awarded, they can be sold to electricity retailers. These retailers are required by the government to purchase a certain number of STCs each year, which they can use to meet their renewable energy targets. The price of STCs is determined by supply and demand dynamics in the market. If there is high demand for STCs, their value will increase, and vice versa.
The revenue generated from selling STCs can help reduce the upfront cost of installing a Solar panel system, making it more affordable for homeowners and businesses. This financial incentive encourages more people to invest in renewable energy systems, leading to an increase in the overall renewable energy capacity in the country.
Overall, STCs play a crucial role in promoting the adoption of small-scale renewable energy systems by providing a financial incentive and creating a market for these certificates. They contribute to Australia’s renewable energy targets and help reduce greenhouse gas emissions.