Suppose you are thinking of installing or are about to install a solar system. In that case, you may have heard about the Small-scale Renewable Energy Scheme (SRES) and its Small-scale Technology Certificate (STC), financial incentive. We know it can all be a little confusing but don’t worry; we are here to help you understand what it all means and how much it can put back in your pocket.
What is the Small-scale Renewable Energy Scheme?
The SRES Scheme is a government incentive to move Australia towards clean energy and to meet its renewable energy targets in the future. The scheme has created a new market for buying and selling Renewable Energy Certificates (REC), which can be thought of like vouchers. One kind of certificate is the Small-scale Technology Certificates (STC’s), which subsidizes small clean energy technologies like solar systems for the public and helps electricity retailers meet their renewable energy obligations. Electricity retailers can buy the STC certificates (or vouchers) off you to meet their targets.
What Is an STC?
Small-scale Technology Certificates are tradable certificates created, validated and registered by a Clean Energy Council (CEC) approved installer. The CEC is a non-profit body that represents the clean energy technologies across Australia and helps to ensure the safety and quality of the clean energy industry. For a solar system to create STC’s, a CEC accredited installer must install the solar system.
One STC is the equivalent of 1,000 kilowatt-hours of renewable energy generated or displaced by the system. In most situations, the installer receives the credits to lower the out of the pocket price of a solar system. This allows the customer to bypass the obstacles involved in selling the STC’s themselves, such as; registering the STC’s, waiting in a queue and needing an appropriate REC registry account.
How do the STC financial incentives work?
When you install your system, you can receive your financial incentive by claiming STCs. The amount of STC’s you will receive will depend on the size of your system and how much energy will likely be generated by where you live. You will get 1 STC for every 1,000 kilowatt-hours of energy generated between the installation and 2030; however, you claim these STC’s in advance. The fluctuating market value influences the value of your STC. Usually, the value is claimed by the installer, who then deducts this from the cost of your system.
How are they Calculated?
The amount you receive is calculated using three main factors; The area where you are installing the solar (how much energy you are likely to produce), the market value of your STC’s and the deeming period (This decreases every year as the scheme is being phased out). So the earlier you install, the more you can claim.
To calculate how many STC’s you will receive from installing your system, you multiply the size of your system in kilowatts by your zone rating and deeming period in years (2030 being 1 and 2020 being 11); this number is rounded down to produce your STC’s.
Areas are divided into four zones. To check which zone rating you need to use to calculate your STC value, you can check using your postcode here.
Solar system size (kW) x Zone rating x Deeming period (years) = Number of STC’s rounded down.
For example, a 6.6kW system installed in zone 3 in 2020 would be:
6.6 x 1.382 x 11 = 100 STC’s
100 STC’s x $37.5 (The STC market value on the 10/09/20) = $3,750
$3,750 would be the value of your total STC’s
Keep in mind that when you see an advertised price for a solar system, it is usually not the actual value. Often you will see the out of the pocket expense advertised, of say, $4,000, but the real value of the system may actually be worth $7,750.
Who is eligible?
STC’s can cover both solar, wind and micro-hydro so long as you have used a CEC registered installer. The scheme is open to homeowners, small businesses, community groups and schools. You can be both on-grid or off-grid, and it can apply to motorhomes, sheds and boats as long as it is your primary place of residence and has an address.
If you are thinking about installing solar and need more information or are still having trouble understanding financial incentives, we would love to hear from you, and we would be happy to have our experts guide you through the process.
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