STCs are a form of financial incentive provided by the Australian government to promote the uptake of small-scale renewable energy systems, particularly Solar panels. The scheme aims to reduce greenhouse gas emissions and encourage the use of clean energy sources.
When a homeowner or small business installs a Solar panel system with a capacity of up to 100 kW, they are eligible to create STCs. The number of certificates generated depends on the size of the system and the amount of renewable energy it is expected to generate over its lifetime.
Once the system is installed, the owner can assign the STCs to an electricity retailer, who then surrenders the certificates to the government as proof of meeting their renewable energy target. In return, the electricity retailer provides a financial benefit to the system owner, usually in the form of a discount on the upfront cost of the Solar system.
The value of STCs is not fixed and can fluctuate depending on market demand and government policy. The number of certificates created for a system is calculated using a formula provided by the government, taking into account factors such as the location, installation date, and expected renewable energy generation.
Overall, STCs provide a way for homeowners and small businesses to reduce the upfront cost of installing a Solar panel system, making it more affordable and encouraging the adoption of renewable energy technologies.