STCs are a form of government incentive in Australia that aim to promote the adoption of small-scale renewable energy systems, including Solar panels. The number of STCs received depends on two main factors: the size of the Solar panel system (measured in kilowatts) and the geographical location of the installation.
The Clean Energy Regulator, an Australian government agency, determines the number of STCs allocated to eligible Solar panel installations. The agency has established a formula that calculates the number of STCs based on the estimated amount of electricity the system will generate over a period of 15 years.
The geographical location of the installation is an important factor in determining the number of STCs. This is because different regions in Australia receive different amounts of sunlight, and thus have varying Solar generation potential. Areas with higher Solar radiation levels receive more STCs per kilowatt of installed capacity compared to areas with lower Solar radiation levels.
Once the Solar panel system is installed and connected to the grid, the system owner can create STCs for the expected electricity generation over the next 15 years. These STCs can be traded or sold to other entities, typically to electricity retailers or brokers, who have an obligation to surrender a certain number of STCs each year to meet their renewable energy targets. The revenue generated from selling STCs can help offset the upfront cost of installing the Solar panel system.
It is important to note that the value of STCs can fluctuate due to market conditions, such as supply and demand dynamics. Therefore, the financial benefit of STCs may vary over time. Additionally, the eligibility criteria and STC calculation methodology may be subject to change as per government policies and regulations.