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STCs

What is an STC?

Small-scale Technology Certificates (STCs) are created for eligible installations of Small Generation Units (SGUs) - small-scale solar photovoltaic panels, wind and hydro electricity systems – and Solar Water Heaters (SWHs) including gas-boosted, electric boosted and air source heat pump water heaters. 

An STC is generally equivalent to:

  • 1 MWh of renewable electricity deemed to be generated by small generation units unless the Solar Credits REC multiplier applies; or
  • 1 MWh of electricity deemed to be displaced by the installation of solar water heaters.

History

The Renewable Energy (Electricity) Act 2000 was established to:

  • Encourage generation of electricity via renewables
  • Reduce Greenhouse Gases (GHG) in electricity sector
  • Ensure that renewable energy sources are ecologically sustainable

The Renewable Energy Target was established by the Renewable Energy (Electricity) Act 2000 and came into effect in 2001.  In August 2009 the Government expanded the target of electricity generated from renewable sources (solar, wind, hydro, bio-mass) to 20% (or 45,000 GWh) of electricity generation by 2020.

On 1 January 2011 the RET scheme was split into the Large-scale Renewable Energy Target (LRET) and the Small-scale Renewable Energy Scheme (SRES).

  • These schemes enable the owner of the renewable energy technology to create environmental credit certificates.
  • The certificates are a commodity and are tradeable akin to shares.
  • The price of certificates is not fixed and varies according to supply and demand. 
  • Electricity suppliers have a liability to purchase certificates to off-set a percentage of their ‘dirty electricity’ usage and require streamlined systems, ease of process and the ability to purchase certificates in bulk. 

A Legal Framework

  • The SRES  is overseen by the Clean Energy Regulator. 
  • The Clean Energy Regulator administers the implementation of the SRES through the control of certificate targets, enforces compliance and conducts audits of installed renewable energy systems.
  • The Clean Energy Regulator also administers a Clearing House where certificates can be placed in a queue to obtain the currently agreed price ($40) per certificate.
  • Liable parties can purchase certificates from the Clearing House, however they are not obligated to do so if certificates are available in the wholesale market.
  • In reality, the wholesale market is the actvie marketplace for the sale and purchase of certificates.

Solar Credits

  • The Solar Credits scheme boosts support to households, businesses and community groups that install eligible small-scale solar PV, wind and hydro-electricity systems by multiplying the number of STCs that can be created. 
  • Solar Credits multiply the number of STC certificates for the first 1.5kW of installation.
  • Certificates are created on a 1:1 ratio for capacity over 1.5kW.
  • For off-grid systems installed on or after 29 June 2010 and before 1 July 2015, the Solar Credits multiplier will apply up to 20 kW provided that the system is more than 1 km from the nearest main-grid line or the cost of connecting to the grid is more than $30,000.
  • The Solar Credits Scheme applies to off-grid and grid-connect wind and solar power installations only – solar hot water rebates operate under completely different schemes. 

For more information on Solar Credits click here

 

Creating Certificates

  • Certificates can be created on a “deemed basis” for the installation of Solar PV systems. Owners of these systems are eligible for STCs or LGCs and can choose to create certificates in either 1, 5 or 15 year deeming periods.
  • The system owner can either create and sell their certificates themselves  or assign them to an agent such as Green Energy Trading.