STC price continuing to fall

17 Jun 2011

STC prices have continued their downward slide with the wholesale price (parcel sizes greater than 5000 STCs) falling from $25 at the end of May to $20.25 by Friday 17 June. The fall is in response to a  dramatic increase in the number of PV systems being installed and claiming STCs. For the month of May more than 40,000 PV systems claimed certificates which was a 30% increase on the 30,000 that claimed certificates in April. Large numbers of STCs have come onto the market and depressed the price. There has been an average of 1.7 million STCs created for each of the last four weeks and at this rate we expect that more than 28 million STCs (which is the level of the target for 2011) will have been submitted to the regulator by 30 June 2011 – meeting the target six months early.

We are expecting to see a slowdown in the level of STCs created after the rush to get systems installed by 30 June in order to be eligible for the 5 times multiplier.  As a result of the lower price we are also seeing an increasing number of people holding on to certificates and placing them in the clearing house. There are currently more than 2.3 million STCs in the clearing house and as a result of the large surplus we do not expect the clearing house to come into play in any meaningful way for at least another 12 months.

The target for next year will be increased to accommodate the large surplus of STCs created this year therefore we expect that the price will start to improve as the level of systems installed starts to slow and the Regulator announces what the target for next year will be (expected before the end of this year).