STCs are a form of financial incentive designed to promote the uptake of small-scale renewable energy systems, particularly Solar panels, in Australia. The scheme aims to reduce greenhouse gas emissions and encourage the transition to cleaner energy sources.
When a household or business installs a Solar system, they are allocated a certain number of STCs based on the expected electricity generation of the system over its lifetime. The number of STCs is determined by the size of the system and the location of the installation.
The value of STCs is not fixed and can vary depending on market conditions. The price of STCs is primarily influenced by supply and demand factors in the market. If there is high demand for STCs, the price may rise, whereas if there is low demand, the price may fall.
The value of STCs can be used to offset the upfront cost of installing the Solar system. Installers can offer customers a discount on the cost of the system by trading the STCs on the market. The installer will typically handle the process of creating and selling the STCs, relieving the customer of any administrative burden.
The number of STCs that can be created for a Solar system decreases each year as the scheme is designed to gradually phase out over time. This reduction in STCs is intended to reflect the decreasing cost of Solar systems and the increasing competitiveness of the renewable energy market.
Overall, STCs provide a financial incentive for households and businesses to invest in Solar systems, making them more affordable and helping to accelerate the transition to renewable energy sources in Australia.