The purpose of this system is to provide a financial incentive for individuals and businesses to invest in Solar panel systems. By assigning STCs based on the expected electricity generation, the government aims to encourage the installation of more Solar panels, which in turn helps reduce greenhouse gas emissions and dependence on fossil fuels.
The electricity retailers are obligated to purchase a certain number of STCs each year as part of their renewable energy targets. This creates a market for the STCs, allowing Solar panel system owners to sell them and recover a portion of their initial investment. The price of STCs is determined by supply and demand dynamics in the market.
The SRES and STC system have been effective in promoting the uptake of Solar panel systems in Australia. They have significantly contributed to the growth of the Solar industry and helped drive down the cost of Solar installations. Moreover, the scheme has played a crucial role in Australia’s transition towards a more sustainable and renewable energy future.