STCs are a form of environmental currency in Australia that represent the amount of renewable energy a small-scale Solar panel system is expected to generate over its lifetime. The number of STCs a system can create is determined by the system’s size, location, and the amount of electricity it is expected to generate.
Homeowners and businesses can create STCs by installing eligible small-scale Solar panel systems. The number of STCs created is calculated based on the system’s capacity and the number of years it is expected to generate electricity. The more electricity the system is expected to generate, the more STCs it can create.
Once the STCs are created, they can be sold to electricity retailers, known as liable entities, who are required to surrender a certain number of STCs each year to meet their obligations under the Small-scale Renewable Energy Scheme. By purchasing STCs, liable entities are able to meet their obligations and demonstrate their commitment to supporting renewable energy.
The value of STCs is not fixed and can fluctuate based on market demand and supply. The price of STCs is typically higher when the demand for renewable energy is high and can provide a financial incentive for homeowners and businesses to install Solar panel systems. The revenue generated from selling STCs can help offset the upfront cost of installing Solar panels, making the investment more affordable.
Overall, STCs play a crucial role in incentivizing the installation of small-scale Solar panel systems by providing a financial benefit to homeowners and businesses and promoting the uptake of renewable energy in Australia.