The SRES 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 promote the use of clean energy sources.
Under the SRES, homeowners and businesses that install eligible Solar systems can create STCs. The number of STCs generated is based on the amount of electricity the system is expected to produce over its lifetime, known as the deeming period. The deeming period for Solar systems is typically 15 years.
The value of STCs is determined by supply and demand dynamics in the market. The government sets a fixed price for STCs, known as the Small-scale Technology Percentage (STP), which is adjusted annually. As of 2021, the STP is 13.5%. This means that for every megawatt-hour (MWh) of electricity retailers sell, they must surrender STCs equivalent to 13.5% of that amount.
Electricity retailers are required by law to purchase a certain number of STCs each year to meet their obligations. They can acquire STCs through various means, including purchasing them directly from system owners or from the open market.
The value of STCs can fluctuate due to factors such as changes in government policy, market demand, and the overall supply of STCs. The price of STCs can impact the overall cost of installing a Solar system, as homeowners can choose to sell their STCs to offset the upfront cost of the system.
It’s important to note that the SRES is separate from other Solar incentives, such as feed-in tariffs, which provide additional financial benefits for exporting excess Solar energy back to the grid. These incentives vary by state and territory in Australia.