What are solar power STCs and how do they work?
Synopsis
An STC, or Small-scale Technology Certificate, is a type of market mechanism designed to incentivize the adoption of renewable energy in Australia. STCs are created when a solar system generates green energy, and polluters must purchase these STCs to offset their carbon emissions. As a result, the price of STCs fluctuates based on supply and demand.
The number of STCs a solar system can generate is based on its wattage and is predetermined at the beginning of each year. The value of STCs is expected to decrease over time, with the program currently set to end in 11 years. Therefore, it's important to choose a high-quality solar system that will last, rather than a cheaper option that may need to be replaced before the STC program ends. By investing in a long-lasting system, homeowners can maximize the rebate associated with STCs and put it towards something of value.
Video Transcript
So our best way of trying to explain what an STC is, is your solar system is going to create these green points. The polluters are going to create black points and they have to offset their black points by purchasing green points. So these green points are called STCs. So they are put into a pool, into a marketplace, so these polluters have to purchase these green points, these STCs, and there's a market demand. So if there's a large influx of STCs, with not a large demand, price will vary accordingly. If there's not a very large input of STCs, then there's less to be picked from, price goes up. So the price will always fluctuate, in the price range of it.
The number of STCs are based upon the size of wattage you get installed onto your roof, and that's predetermined per year, 1st of January, every year, that's a predetermined value for that one year. Then the next year, they will decrease slightly again, and for every year after that. For the moment, you're looking at 11 years worth of STC's value. STCs are not an eternal thing, we suspect that STCs will likely end before the deemed values. They're meant to end in 11 years, but we've got a feeling that it just won't last that long. By the time the STC value decreases to a certain time, to a certain dollar value that just doesn't make financial sense, it will disappear and it wouldn't be a reasoning behind making a certain selection.
So going and choosing now the quality product that will last a long time, so you don't have to try to then do it again in two years time, or in three years time, STCs values have gone down. You're going to choose another crappy product, so just get it right the first time round. Because the rebate is associated with the wattage to the system, You might as well put it towards something that's going to last you a long time, rather than putting it onto something that's going to last you a year, two years, three years or four years. So it's the same rebate. It's the same costing. Put it towards something of value.