These STCs are a form of government incentive to promote the adoption of renewable energy sources, such as Solar power. The idea behind the system is to create a market for these certificates, which represent a certain amount of renewable energy generation. By granting these certificates to households and businesses that install Solar panels, the government effectively creates a financial incentive for individuals to invest in renewable energy.
The number of STCs that a Solar system is eligible for is determined by the Clean Energy Regulator in Australia. The regulator sets a baseline for the number of certificates based on the system’s expected electricity generation over a 15-year period. This baseline is then adjusted based on factors such as the location of the system (since some areas receive more sunlight than others) and the size of the system.
Once the Solar system is accredited by the Clean Energy Regulator, the owner can create and sell the STCs on the market. The price of the certificates is determined by supply and demand, with the value fluctuating over time. By selling these certificates, households and small businesses can recoup a portion of their installation costs, making Solar power more affordable and financially viable.
Overall, the STC system is designed to incentivize the adoption of Solar power by providing a financial benefit to those who invest in renewable energy. This helps reduce greenhouse gas emissions and promotes the transition to cleaner energy sources.