This system is known as the Small-scale Renewable Energy Scheme (SRES). The SRES is a government initiative in Australia that aims to encourage the installation of small-scale renewable energy systems, such as Solar panels, by providing financial incentives.
When homeowners or businesses install eligible Solar panel systems, they receive a certain number of STCs based on the system’s size and location. The number of STCs is determined by the amount of renewable energy the system is expected to generate over a set period.
Once the Solar panel system is installed and the STCs are created, they can be sold to electricity retailers or other liable entities. These entities are required to buy and surrender a certain number of STCs each year to meet their renewable energy targets, as mandated by the government.
The price of STCs is determined by supply and demand dynamics in the market. The value of STCs can vary over time, as it is influenced by factors such as the overall demand for renewable energy and the number of STCs available for sale.
By selling the STCs, homeowners and businesses can receive a financial benefit, which helps offset the cost of installing the Solar panel system. The value of the STCs can be taken into account when calculating the upfront cost of the system or can be sold separately to generate additional income.
Overall, the SRES and the creation of STCs provide an incentive for individuals and businesses to invest in renewable energy systems, such as Solar panels, by offering a financial return through the sale of STCs. This helps to promote the adoption of renewable energy and reduce greenhouse gas emissions.