The Solar Credits program is part of Australia’s Renewable Energy Target. Under this initiative, every megawatt hour of qualifying energy generation is eligible for renewable energy certificates (RECs).
These certificates come in two types: large and small. Small-scale technology certificates (STCs) are the ones that apply to residential solar installations.
You might think of an STC as a discount voucher on the cost of installing your solar system. Depending on how big your system is, and where you live, the number of STCs you are eligible for varies and therefore the amount of your rebate varies.
How does the solar credits scheme work?
STCs are issued with qualifying solar power systems and solar panels and can be redeemed for a dollar value that is deducted from the cost of the solar system. The value of an STC at any one time depends on market conditions.
When you purchase a solar power system from Clean Power Co, we have already discounted this value for you in your solar paperwork. That’s because we take over the hassle of registering and selling the STCs on the market from you. We give you a point of sale discount based on your STCs.
On the day of installation, you assign the STCs over to us, then we complete the registration of these certificates with the Renewable Energy Regulator on your behalf and eventually recoup their value. You don’t have to wait for this to happen, we do. You get an immediate deduction in cost.
STC values and ‘zoning’ – How they affect your discount
The amount you get back from the STC scheme is based on three factors:
§ Zoning (where you live)
§ STC $$ value (which fluctuates)
§ The deeming period (which decreases each year)
Australia is divided up into various zones based on how much renewable energy can be generated by a solar panel in a given area. It works by postcode. Look up yours in this table and find out which zone you are in.
Once you have your zone, note down the ‘rating’ number:
Zone 1 – 1.622 rating
Zone 2 – 1.536 rating
Zone 3 – 1.382 rating
Zone 4 – 1.185 rating
Here’s how to calculate how many STCs you are eligible for:
Solar system size (kW) x Postcode Zone Rating x Deeming Period (years) = Number of STCs (rounded down).
The deeming period was set by the scheme and decreases every year until 2030. That’s because the scheme was designed to phase out totally in 2030.
The shorter the deeming period, the fewer STCs you get and the less of a discount you get. In 2018, the deeming period was 13 years. In 2019, it will be 12, etc.
So how much are my STCs actually worth?
Let’s look at the following example:
If you buy a 5 kW system in Melbourne, Victoria in 2019 the calculator will tell you that you are eligible for 71 STCs. You then multiply this by the dollar value of an STC in the market (your solar installer will be able to tell you the current value). This dollar value fluctuates, but at time of writing it’s $36.50* per STC.
71 STCs x $36.50* = $2,591.50
If you live in a different zone and/or have a bigger/smaller system, the amount of subsidy will be different.
* Estimated value only – values fluctuate due to market conditions.
How much will the subsidy reduce in coming years?
Because the scheme is being terminated, the deeming period will reduce each year. The following graph shows the impact of the shortening deeming period on the STCs out to 2030, assuming a 5 kW installation in Melbourne and an STC value of $38 per certificate.
Can I redeem the STCs myself?
While you can claim the value of the STCs yourself, it means you’ll need to pay the full price of the solar power system up front, then register your STCs on the government market exchange and wait in the queue.
However, Clean Power Co can offer you a point of sale discount if you assign the credits to us because we are a registered STC selling agent. We then take care of the rest, saving you the headaches.