This system of creating and trading STCs is a key component of the Small-scale Renewable Energy Scheme (SRES) in Australia. The SRES is a government initiative aimed at promoting the adoption of small-scale renewable energy systems, such as Solar power systems.
When a homeowner or business installs a Solar power system, they are eligible to create STCs based on the amount of renewable energy it is expected to generate over a certain period of time. The larger the system and the sunnier the region, the more STCs can be created. These STCs are essentially certificates that represent the environmental benefits of generating renewable energy.
Once the STCs are created, they can be sold or traded on the market. The value of STCs is determined by supply and demand, and it can fluctuate over time. The revenue generated from selling STCs can help offset the upfront cost of installing the Solar power system, making it more financially viable for homeowners and businesses.
The process of creating and trading STCs is regulated by the Clean Energy Regulator in Australia. This ensures that the STCs are genuine and meet the necessary criteria for creating and trading them. The goal of this system is to incentivize the uptake of renewable energy systems and reduce greenhouse gas emissions.
It’s important to note that the SRES and the creation and trading of STCs are specific to Australia and may not be applicable in other countries. Other countries may have their own incentive programs and mechanisms for promoting renewable energy adoption.