Understanding STCs: Small Scale Technology Certificates Explained

Under a federal government program introduced under the Renewable Energy Act 2000. The cost of purchasing a solar system for your home is subsidised up to a maximum dollar value. This is called STCs (Small Scale Technology Certificates). However, the government says that this isn’t a rebate, it’s simply a reduction in the cost of buying a solar system.

How are the Small Scale Technology Certificates (STCs) calculated?

STCs certificates can go up or down and may even be eliminated completely. The number of STCs allocated to your new solar system is calculated based on where you live, the size of your system. Also the deeming period and market conditions. We will discuss these last two points in the next section.

Generally, each STC is equivalent to one-megawatt hour of generated renewable electricity. So the larger the solar system you install, the more STCs you receive and the greater the subsidy. If you know the size of your installation, you can calculate the number of allocated STCs on the REC Registry website (Renewable Energy Target).

What is the actual value of the STCs incentive?

By law, each STC can’t be greater than $40, but it can be as low as $0! Currently, each single STC is worth $33, but it has been higher and it has been lower.  As mentioned above, the actual redeemable cost of each STC is partly dependent on the deeming period and market conditions. Both of which change over time.

The deeming period runs from January 2017 to January 2030. Decreasing every year until zero STCs will be created for new solar systems in 2030. Since the value of the STCs is calculated on the amount of renewable electricity. The solar system can generate over the remaining deeming period. As this timeframe reduces, so does the value of the STC.

This means that the longer you leave your solar installation, the lower the STC subsidy you will receive. Your solar installer usually deducts the dollar value of the STCs from your purchase and installation quote. So hypothetically the total cost of installation might be $10,000, but the installer only quotes $6,000 because of a $4,000 STC.

However there is no guarantee STCs are going to be around until 2030; Scott Morrison our new Prime Minister has also proposed to remove the STCs instead of waiting for the end of the scheme. Since the new prime minister was elected the STCs value have dropped from $37.5 to $32. Therefore getting solar installation now is more important than ever!

For more information on installing solar, call us on 1300 732 679 or send us an email.