STCs are part of the Australian government’s Renewable Energy Target (RET) scheme, which aims to increase the proportion of electricity generated from renewable sources. The scheme creates a market for these certificates, which are created when eligible renewable energy systems are installed.
The number of STCs a system owner receives is determined by the system’s capacity and the location’s Solar radiation zone. The more electricity the system can generate over its lifetime, the more STCs it is eligible to receive. The system owner can then sell these STCs to electricity retailers, who are obligated to acquire a certain number of certificates each year to meet their renewable energy targets.
The value of STCs is market-driven and can fluctuate depending on supply and demand. The financial benefit to the system owner comes from selling these certificates at the prevailing market price. This can help offset the upfront cost of installing the renewable energy system, making it more affordable for households and small businesses to adopt sustainable energy practices.
The Small-scale Renewable Energy Scheme (SRES) is an important component of Australia’s efforts to transition to a more sustainable and low-carbon energy future. By incentivizing the installation of small-scale renewable energy systems through the issuance of STCs, the scheme encourages the use of clean and renewable energy sources, reduces greenhouse gas emissions, and promotes energy independence at the household and small business level.