The SRES was introduced by the Australian government in 2011 to support the installation of small-scale renewable energy systems, including Solar panels, Solar water heaters, and heat pumps. Under this scheme, homeowners and small businesses that install eligible systems are entitled to receive a certain number of STCs, which represent the environmental benefits of the renewable energy generated by their systems.
The number of STCs a system owner receives is determined by the amount of renewable energy the system is expected to generate over a certain period, known as the deeming period. This period is typically 15 years for Solar panel systems and 10 years for other eligible systems.
The value of an STC is not fixed and can vary depending on market conditions. The market price of STCs is determined by supply and demand factors, as well as government policy changes. Generally, the value of STCs tends to decrease over time as the deeming period progresses. This is because the number of STCs that can be created for each system decreases each year.
Once system owners receive their STCs, they have the option to sell them through the open market or assign them to a registered agent who can sell them on their behalf. Electricity retailers are obligated to acquire a certain number of STCs each year as part of their renewable energy obligations. By purchasing these certificates, retailers can meet their legal requirements and demonstrate their support for renewable energy.
The revenue generated from the sale of STCs can help offset the upfront cost of installing a Solar system, making it more affordable for homeowners and businesses. The value of the STCs can vary depending on the factors mentioned earlier, such as the location, size, and efficiency of the system. Generally, larger and more efficient systems located in areas with higher Solar irradiance will generate more STCs and therefore have a higher value.
Overall, the Small-scale Renewable Energy Scheme and the trading of STCs play a significant role in promoting the adoption of Solar energy in Australia by incentivizing and supporting the installation of small-scale renewable energy systems.