STCs are part of the Australian government’s Renewable Energy Target (RET) scheme, which aims to increase the use of renewable energy in Australia. The scheme creates a market for STCs, which are tradeable certificates that represent the environmental benefit of generating renewable energy.
The number of STCs that can be claimed for a Solar panel system depends on several factors. Firstly, the size of the system, measured in kilowatts (kW), determines the number of STCs. The larger the system, the more STCs can be claimed. Additionally, the location of the system affects the number of STCs, as different regions have different levels of Solar radiation and renewable energy targets.
To claim STCs, individuals or businesses must meet certain eligibility criteria and register their system with the Clean Energy Regulator. The STCs can then be sold on the open market to liable entities, such as electricity retailers, who are required to surrender a certain number of certificates each year to meet their renewable energy obligations.
The financial incentive of STCs comes from their market value, which fluctuates based on supply and demand. The value of STCs can be used as a discount when purchasing a Solar panel system, reducing the upfront cost. Alternatively, STCs can be sold separately to generate additional income.
Overall, STCs provide a financial incentive for installing small-scale renewable energy systems, such as Solar panels, and help drive the adoption of renewable energy in Australia.