STCs, or Small-scale Technology Certificates, are a form of government incentive in Australia to promote the installation of small-scale renewable energy systems. These certificates are created for every megawatt-hour of electricity generated by eligible systems, such as Solar panels.
The eligibility for STCs is based on various factors including the size and location of the renewable energy system, as well as the expected electricity generation over its lifetime. The more electricity a system is projected to generate, the more STCs it is eligible for.
Once these certificates are created, they can be sold to electricity retailers. The retailers, by law, are required to purchase a certain number of STCs each year. This mechanism creates a market for STCs, and the value of these certificates fluctuates based on market demand and supply.
The value of STCs is typically determined by the market, and factors such as the demand for renewable energy, government policies, and the overall supply of STCs can influence their price. As the demand for renewable energy increases, the value of STCs may rise, making them more valuable for those who generate them.
The purpose of STCs is to provide financial incentives for individuals and businesses to adopt small-scale renewable energy systems. By selling these certificates, system owners can recover some of the costs of installing and maintaining their renewable energy systems, making them more affordable and attractive.
Overall, STCs aim to drive the adoption of small-scale renewable energy systems by creating a market for the generated certificates, providing financial benefits to system owners, and helping to reduce greenhouse gas emissions.