2018 Market Update: STC Discount Expected to Reduce Dramatically | Infinite Energy

2018 Market Update: STC Discount Expected to Reduce Dramatically

2018 Market Update: STC Discount Expected to Reduce Dramatically

Written by Infinite Energy

At Infinite Energy we encourage our clients to do their research and not to rush into any decisions. After all, solar is a significant one-time investment. You only have one chance to choose quality components, and one chance to have them installed properly.

However, there are market forces currently in play that will cause the price of solar to increase as we head towards Summer. So, if you’re waiting for the right time to get a solar system installed, we wanted to let you know the time is now.
Continue reading to find out why...

The Solar ‘Rebate’ – a brief overview

Once a Solar PV system is installed, Small-scale Technology Certificates (STC’s) can be created. These STC’s represent the amount of renewable energy that is expected to be generated by the system. To avoid the paperwork of creating STC’s, most people assign them to their solar company in exchange for an upfront discount. This is what people commonly refer to as the solar ‘rebate’.

Under the Renewable Energy Target, liable entities (usually electricity retailers) are required to source a certain amount of renewable energy each year. One way they meet this obligation is by buying STC’s. The price of these STC’s depend on supply and demand.

When the solar industry is booming, more STC’s are created and put on the market for sale. This can create an oversupply, causing STC prices to fall. When STC prices decrease, so does the upfront discount offered by your solar company.

Oversupply of STCs Expected During Last Quarter of 2018

So, when does the solar industry ‘boom’? Not surprisingly, spring and summer. In the coming months, an oversupply of STCs is expected to flood the market, causing STC prices to decrease.

The same thing happened last year when STC prices dropped by around $10. This reduced the ‘rebate’ for a 6kW solar system by over $1,000!

Federal Government’s STC Phase Out

In addition to the general market supply and demand impacting STC prices, the Federal Government’s planned STC phase out means these incentives are set to further reduce by 1/13 (around 7.6%) in January 2019 and every year until 2031 when they are eventually phased out completely.

There is also no guarantee that STCs will even stick around until 2031. The Federal Government has the ability to axe the incentives at any point in time and have recently announced they are looking at scrapping the subsidies available for solar.

Now’s the time to act

To secure the current government incentives and maximise your savings, you’ll need to purchase and install your solar system before January 1, 2019. With longer installation wait-times anticipated during the summer months, we recommend you look at purchasing your system now to ensure you beat the January 1 deadline.

For information on which system size best suits your energy needs and how much going solar could save you on electricity bills, request a no obligation quote today.

Households will soon be able to choose their electricity retailer

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