In many countries, including Australia, the installation of Solar panels is encouraged through a government incentive program called the Small-scale Renewable Energy Scheme (SRES). Under this scheme, the government issues Small-scale Technology Certificates (STCs) to eligible Solar panel owners.
The number of STCs a system is eligible for is determined by several factors. Firstly, the location of the Solar panels is taken into account. Different regions receive varying amounts of sunlight, and areas with higher Solar radiation levels are awarded more STCs. This encourages the installation of Solar panels in areas with abundant sunlight.
Secondly, the size of the Solar panel system is considered. Larger systems generate more electricity, thus contributing more to the renewable energy goals. As a result, they are eligible for a greater number of STCs.
Lastly, the efficiency of the Solar panels is taken into consideration. More efficient panels produce more electricity for the same surface area, allowing for a higher number of STCs.
Once the STCs are issued, Solar panel owners can sell them to electricity retailers, who are obligated by law to purchase a certain number of STCs each year. The retailers use these certificates to meet their renewable energy obligations. The price at which the STCs are sold varies depending on market conditions, such as supply and demand. Generally, the higher the demand for STCs, the higher the price.
The Rebate received from selling STCs can significantly reduce the upfront cost of installing Solar panels. This financial incentive aims to make Solar panel installations more affordable and attractive to homeowners and businesses, thereby promoting the adoption of renewable energy sources.