Government incentives lower the cost of solar system installations for consumers. There are currently three types of financial assistance offered for solar panel systems in Australia: STCs, Solar Credits and Premium Feed-In Tariffs.
Small-scale Technology Certificates (STCs)
When you install solar power, you are helping to reduce greenhouse gas emissions. This entitles you to create environmental credits called Small-Scale Technology Certificates or STCs for short. “Renewable Energy Certificates” (RECs) was the original term, which was replaced by “STCs” in January 2011; however it is still an umbrella term covering both Small-scale and Large-scale certificates.
You pay for a solar system through a combination of your own money and money generated from the sale of the Small-scale Technology Certificates (STCs) that are accredited to you for your purchase. A Small-scale Technology Certificate represents the equivalent of one megawatt hour of electricity generation from your system. 15 years worth of STCs can be created “up front”. In other words, you sell 15 years worth of renewable energy output upfront for a discount on the solar system.
These credits are the primary commodity of the RET (Renewable Energy Target) Scheme and are tradeable like shares. Prior to January 1st 2011, the price of Renewable Energy Certificates (RECs) fluctuated daily. Now these commodities have been renamed Small-scale Technology Certificates and regulation has been put in place to stabilise their price.
The government is going to be revising the Small-scale Renewable Energy Scheme in early July this year; therefore it is most important to have your system installed before prices go up.
The level of subsidy available will depend on a number of factors, including:
- the geographic location of the installed system. Installations in areas of Australia which have less sunshine receive fewer STCs;
- the size of the system;
- the value of STCs at the time the system was installed.
The Solar Credits Scheme for solar systems is based on the RET, but multiplies the number of STCs created for a system up to 1.5kw by a factor of 5. In other words, for every actual STC generated for this system, four credit STCs are also created.
||9 June 2009 – 30 June 2011
||1 July 2011 – 30 June 2012
||1 July 2012 – 30 June 2013
||1 July 2013 – 30 June 2014
||From 1 July 2014 onwards
||No multiplier (1)
Newsflash: From 1st July 2011, the Solar Credit Scheme will be slashed. This incentive is being phased out a year earlier than originally planned for Sydney, Brisbane, Perth and Adelaide.