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What are Small-scale Technology Certificates (STCs) and also what is the Renewable Energy Target?

The Renewable Energy Target is a Federal Government scheme that creates and oversees a market and a value for the emissions savings from solar power systems (and other renewable energy technologies).

The savings of CO2 emissions via solar electricity generation is being rewarded through tradeable certificates for small scale solar systems called Small Scale Technology certificates or STC’s. The governing body for this scheme is the Clean Energy Regulator.

When a solar system is installed, a calculation can be done to confirm how many STC’s will be created over the life of your solar system, which is effectively a measure of the renewable energy generation from your system.

Solar system installation companies typically offer an up-front discount equal to the value they can get when they sell the STC’s. This means these STCs for your system are being handed over by you to the solar system installation company in lieu of some of the payment for the system. The solar system installation company then trades the certificates and gets cash in return.

It is important to understand several key aspects of these STCs:

  1. The Government does not pay you for certificates, nor does it set the price;
  2. As a tradeable certificate, STC value can and does vary over time and is not fixed;
  3. The quantity of STCs you may receive for a system varies depending on your location and when you create them;
  4. Suppliers who agree to offer you a price for STC’s must comply with certain rules and conditions set out by the Clean Energy Regulator and only approved companies may register and trade STC’s;
  5. If the STCs are not traded (cashed in) 12 months after creation they become null and void.

Most customers have the STCs treated like a rebate and have the value deducted from the sale price of their solar system. Most advertised prices for solar systems already have the rebate (STC value) deducted.