STCs are a form of financial incentive provided by the Australian government to encourage the adoption of small-scale renewable energy systems, particularly Solar power. The scheme aims to reduce the upfront cost of installing Solar power systems and make them more accessible to homeowners and small businesses.
The number of STCs a participant can create is calculated based on the expected electricity generation of their Solar power system over a 15-year period. This calculation takes into account factors such as the size of the system, its location, and the amount of renewable energy it is expected to generate.
Once the STCs are created, they can be sold to electricity retailers or other entities that have a legal obligation to meet renewable energy targets. These entities purchase the STCs at an agreed-upon price, which helps offset the cost of the Solar installation for the participant.
The price of STCs can vary based on market demand and supply, and it is typically higher in areas with lower Solar penetration. Participants can either sell their STCs directly or engage the services of an agent or broker to assist with the sale.
In summary, STCs provide a financial incentive for homeowners and small businesses to invest in Solar power systems by allowing them to create and sell certificates based on the expected electricity generation of their system. This helps offset the upfront cost of installation and makes renewable energy more affordable and accessible.