The SRES is administered by the Clean Energy Regulator and is designed to encourage the installation of small-scale renewable energy systems, including Solar panels, Solar water heaters, and heat pumps. The program aims to reduce greenhouse gas emissions and increase the use of renewable energy sources.
Under the SRES, eligible Solar panel installations are assigned a certain number of STCs based on the amount of electricity they are expected to generate over a set period of time. This number is determined using a set formula that takes into account factors such as the location of the installation, the size of the system, and the amount of sunlight it is likely to receive.
Once the Solar panel system is installed and the STCs are created, they can be sold to electricity retailers. These retailers are required by law to buy a certain number of STCs each year, known as their “STC liability.” This creates a market for the certificates, with the value of STCs fluctuating based on supply and demand.
The value of STCs can also be affected by factors such as changes in government policy, changes in technology costs, and changes in market conditions. The Clean Energy Regulator regularly updates the “Small-scale Technology Percentage” (STP), which determines the number of STCs that can be created for each megawatt-hour of electricity generated by eligible systems. The STP is typically reduced each year to gradually phase out the scheme as the cost of renewable energy technologies decreases.
Overall, the SRES and the STC system provide a financial incentive for individuals and businesses to invest in Solar panel installations and other small-scale renewable energy systems in Australia. This helps to increase the uptake of renewable energy and reduce reliance on fossil fuel-based electricity sources.