The price of STC’s play an important role in determining the deals that a solar retailer is able to offer their customers. Read on to learn more about what they are, and how we, and other solar retailers, calculate them to offer you better prices.
What are STCs?
The solar industry benefits from a government incentive called the ‘Renewable Energy Target’ (RET). Under the Small-scale Renewable Energy Scheme, households and businesses with solar power systems up to 100kW, receive Small-Scale Technology Certificates (STCs) for every megawatt hour of renewable energy expected to be generated or displaced by a solar system. These STCs carry monetary value. When purchasing a solar PV system, your solar company will offer an upfront 'STC Discount' in exchange for assigning these STC's to them.
This STC Discount was at its highest point when the scheme was first introduced in 2011, to counteract the high price of solar energy at the time, and make it a more feasible choice for Australian residents. Overtime, in tandem with the cost of solar energy systems falling, the STC Discount has fallen as well. It is set to phase out completely by 2030.
But until then, homeowners can enjoy the discount these STC’s provide, reducing the cost of their systems.
How are STCs calculated?
The quantity of STCs your PV system entitles you to is calculated by taking into account:
1. System Size
Number of panels x wattage of each panel.
2. The solar zone you reside in
Australia is divided into 4 solar zones.
Each zone has it's own rating used in determining the value of STC's:
If you are unsure which zone you reside in, you can download the list of postcode zone ratings here.
3. The number of years remaining until the scheme ends
So, if you install a 6.6kW system in Perth in 2023, you will receive 6.6 x 1.382 x 8 = 72 STC’s.
What is the value of an STC?
Like shares, STCs have a trading value, which fluctuates depending on supply and demand. Their price is capped at $40 but their median is $35, so that’s a good point to work from. We incorporate STC’s generated by systems we sell as an upfront discount on the price of the system, so that you can enjoy the savings they provide immediately. Real-time STC market prices can be found online.
So, if you take $35 and multiply it by the 72 x STC’s we determined a Perth-based homeowner would receive, you get a discount of $2,520. For those who miss out on a 2023 install spot, that same system installed in 2024 will receive only 63 STC's, which equates to a drop of approx $315 in STC Discount.
If you would like to learn more about STC’s, you can read all about them on the Clean Energy Regulator website. If you’d like to see just how much solar could save you, give us a call on 1300 745 410, or by enquiring below.
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