STC Program – The Solar Rebate That Is Not Officially a Rebate
STC program is the abbreviation of Small-scale Technology Certificate. STC is a government program that gives financial incentives issued with qualifying solar power systems and solar panels. This can be redeemed as a dollar value that is deducted from the cost of the solar system. The value of STC can be varied depending upon the market conditions.
- What Is The STC Program?
- Reduce Upfront Cost
- Criteria for Claiming the Financial Incentive
- How Much Is the STC Rebate?
- How Did the Solar Rebate Work?
- Why You Should Get Quotes for Solar Sooner?
The STC program comes under the solar credits program which says every megawatt-hour of qualifying energy generation is eligible to get Renewable Energy Certificates (RECs). These certificates can be split into two types: small-scale technology certificates and large-scale generation certificates (LGCs). STCs are the ones applicable to residential solar installations.
The government says it cannot be referred a solar rebate. The clean energy regulator website says that under the Small-scale Renewable Energy Scheme, the cost reduction in your solar panel is not a rebate. You will not be eligible for any Government-based financial compensation at the completion of any process relating to STCs. This only means the reduction in solar system price you are getting is not coming from the government.
You can get the benefit of this program while purchasing a solar power system from any reputed solar installers. Probably the installer discounts the STC value for you in your solar quote. They will take over the hassle of registering and selling STCs from you.
Read more about renewable power incentives given by the Australian government
If you buy a solar energy system now, it is subsidized by the government scheme worth around $650 per kW installed. For a typical 5kW system that cost reduction will be about $3250. This cost reduction will be applied at the point of sale.
The solar rebate started to reduce one fifteenth every year bases on the current legislation. It started in 2017 and it will gradually reduce until 2032 when the reduction will end up at zero.
If the demand for solar panels gets increased the value of the rebate will go down with STC price. The STC price can be varied between $0 and $40. This means the maximum value of STC set by law is $40.
Most of the owners are assigning a registered agent to create their small-scale technology certificates. But you have the option to create and trade the certificates by yourself. To claim your certificates, you need to follow the steps given here.
- Determine the eligibility of the solar power system or other small-scale renewable energy systems to be installed.
- Calculate the number of STCs to claim for your system.
- Obtain and complete the proper compliance paperwork.
- Create an account in the REC registry that includes verifying your identity and an assessment as a fit and proper person
- Creating STCs in the REC Registry within 12 months of the installation date.
- Wait for the Clean Energy Regulator to validate the certificates
- Find a buyer for the STCs or place them in the STC clearing house queue for sale.
Currently, the value of the solar rebate is about $38 per STC. It translates into a solar rebate of $525 per kW installed. As the STCs are traded in the open market it is exposed to market fluctuations. The historic low price of STCs has fallen into is $17. But still, the rebate will be worth around $221 per kW installed.
STCs are issued with eligible solar PV systems and solar panels and their dollar value can be redeemed which is usually deducted from the cost of the solar system. Most of the accredited solar installers take over the hassle of registering and selling STCs on the market from you and give the point-of-sale discount based on your STCs.
You can assign the certificates to the solar system installing agency will complete the registration process with the Renewable Energy Regulator on your behalf. But you don’t have to wait for that and will get an immediate cost reduction for the solar panel installation.
The amount you get can from this program is based on 3 factors:
- Dollar value of STC
- Zoning:Australia is divided into separate zones based on how much solar energy can be generated by the panels in a given area. You can see your zone by using the postal code.
See the Postcode zone ratings and postcode zones for solar panel systems given on the Clean Energy Regulator website to check your zone.
Each zone has a particular rating number which is used for the calculation of the number STCs the system eligible for. Those ratings are:
Zone 1 – 1.622 rating
Zone 2 – 1.536 rating
Zone 3 – 1.382 rating
Zone 4 – 1.185 rating
- The deeming period: Since the solar rebate is gradually reducing one fifteenth every year until it gets completely ended, the deeming period will reduce each year.
Here are the approximate values of financial incentives for a 6.6kW solar energy system based on the $38 STC price:
Zone 1 – $4066
Zone 2 – $3852
Zone 3 – $3466
Zone 4 – $2971
As already mentioned, the amount of solar rebate can be varied according to the current market price of STC. Now the dollar value of STC is about $38 and the rebate will be worth around $525 per kW installed. When there is a high demand for solar panel installation, a lot of STCs will be created. As the supply of STC increases, the demand decreases and therefore the STC price and subsidy gets reduced.
Currently, a 6.6kW solar system is eligible for a rebate of $3465 (6.6kW x $525 = $3465). If the demand for solar panels increased too much, that can cause the STC price to drop. This means if you get quotes for solar now, you can get the rebate based on the current STC price.
The renewable energy certificates are introduced to attracts people to have renewable energy systems. They can also buy the right to other people’s energy systems in the form of RECs. The Small-scale Technology Certificate is a special type of REC. The value of STC can be redeemed as its dollar value. Most likely the installer will take care of the STC registration and other hassle related to it and you will get a reduction in cost during installation.
To calculate the rebate, you need to find out the number of Small-scale Technology Certificate your system eligible for. This can be calculated by the following equation?
Solar system size (kW) x Zone Rating x Deeming Period = Number of STCs
Then to find the solar rebate use the formula given below.
Number of STCs x Dollar value of an STC in the market = Amount of subsidy
The solar incentive program is open to a large group of people. Homeowners, small businesses, and community groups are all eligible for the program. The only eligibility criteria are:
- Your solar PV system should be less than 100kW.
- The system should be designed and installed by Clean Energy Council accredited professionals.
- Only use the solar panels and inverter that are approved to use in Australia by the Clean Energy Council.
The renewable energy system owners must complete the STC assignment form to assign the certificates to an agent in exchange for a financial incentive. The form can be completed after the system installation is complete.
Commonly, the homeowners will assign the solar installer to create their small-scale technology certificates. You can ask a residential solar installer whether can manage the procedures to claim the STC solar rebate. But you can create and trade the STCs by yourself. The steps that need to be followed to claim by yourself have been explained above.
For 2020, the solar rebate value in Western Australia (WA) was $814 which translates into 22 STCs for a 1.5kW system. If you have a 2kW system, the incentive will be about $1110 or 30 STCs. All these estimates are calculated based on the $37 STC value.