Government Solar Incentives – STCs & LGCs

The Renewable Energy Target is split into two parts. The Large-scale Renewable Energy Target (LRET) and the Small-scale Renewable Energy Scheme (SRES). Both schemes create financial government incentives to invest in renewable energy generation.

Solar PV Systems up to 100kW are eligible for the SRES and systems above 100kW are eligible for the LRET.

STCs

The SRES creates a financial incentive for owners to install small scale solar installations under 100kW. The SRES works by issuing Small-Scale Technology Certificates (STCs) for these installations. The number of STCs issued is based on how much electricity the system will generate over 15 years. One STC is the equivalent of one megawatt-hour of electricity.

For example, a 30kW system (approx 115 panels) will produce around 621MWh worth of electricity over a 15-year period, meaning you are entitled to 621 STCs.

STCs are an electronic form of currency that can be purchased, sold and traded on an open market, often to recover a portion of the cost of purchasing a system. (It’s common practice to allocate the STCs to the system provider in exchange for a discount on the purchase price.) Their value fluctuates with supply and demand, and currently trade for around $38 each.

This means you’d receive a $23,600 discount off the cost of a 30kW system.

LGCs

The LRET creates a financial incentive for large scale renewable energy installations such as Solar PV Systems, above 100kW. After the system has undergone an accreditation process the owners can generate Large-Scale Generation Certificates (LGCs).

One LGC can be created for every megawatt-hour of electricity generated. Like STCs, LGCs can be purchased, sold and traded on an open market and their value fluctuates according to supply and demand.

The key difference between STCs and LGCs is that LGCs are produced on an on-going basis (once the system has been installed, is producing electricity, and has undergone the accreditation process) as opposed to STCs which are created upfront.

For example, a 200kW system would produce an average solar output of 320,000kWh, or 320MWh. This means they would produce 320 LGCS.

LGCs currently trade for around $80, which means at the current value, a 200kW system would receive around $25,600 per year in government incentives.

Accreditation and Creating LGCs

In order to create LGCs the solar system needs to become an ‘accredited power station’. The first step would involve the system owner becoming a ‘registered person’ in the REC Registry. Once this has been completed the system owner can apply for power station accreditation.

Following successful accreditation, LGCs can be created in the REC registry where, once validated, they can be made available for purchase. LGCs are sold through the open LGC market, where the price will vary according to demand. 

Infinite Energy are able to assist and manage the accreditation and sales process for both STC’s and LGC’s.

If you would like more information on government incentives for solar please get in touch on 1300 074 669, or submit an enquiry online.  

To arrange a no obligation consultation at your home or office:

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