STC Discount Set to Reduce | Infinite Energy

STC Discount Set to Reduce

STC Discount Set to Reduce

Written by Infinite Energy

At Infinite Energy we encourage our clients to always do their research and not to rush into any decisions when it comes to investing in a solar power system. After all, solar is a significant investment and you need to be sure that you are getting the best solar solution to perfectly suit your requirements.

However, there are external factors which will cause your STC rebate to reduce as we head towards Summer, meaning that you could pay more for your solar power system if you wait to install.

What is the STC rebate?

Small-Scale Technology Certificates or STCs are government rebates as part of the Renewable Energy Target, designed to incentivise homeowners and businesses to invest in renewable energy like solar power and wind power. When purchasing a renewable energy system, you’ll generate 1 STC for every Megawatt-hour of energy your solar power system is expected to produce until 2031.

Once your STCs have been authorized, they act as a form of currency that can be sold to recover a portion of the cost of purchasing the solar power 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 or STC rebate. The value and number of STCs your solar power system will receive is determined by the when your solar power system is installed, the size of the solar PV system being installed, as well as the location for the installation.

Different zones around Australia have different ratings as you’ll see in the table below, and these ratings factor into the calculation of your STC amount.

To calculate how many STCs you would receive for your system you can follow this formula:
Postcode Zone Rating x Deeming Period (years) x System Size in kW = Number of STCs created

For example, let’s say you live in Perth which is in Zone 3 and has a rating of 1.382. You decide to invest in a 6.6kW system and are planning to install your solar power system in 2021. So, this calculation would be: 1.382 x 10 x 6.6 = 91 STCs 

With the current STC price at around $38 per STC, you can work out your STC rebate amount: 91 STCs x $38 = a STC rebate value of $3,458.

STCs received are based upon the date of installation, not the date of sale, which is important to consider as it will affect the number of STCs and, therefore, the discount received. To calculate the number of STCs you are likely to receive based on your details, you can also use this STC calculator provided by the REC registry.

How does this affect the solar rebate?

STCs are provided 'up front' for the systems' expected power generation from the installation year until 2030 when the scheme ends, this period of time is what is known as the ‘deeming period’. Because the deeming period is reducing by 1 year every year until 2030, this means that the amount of STCs you will receive for your solar power system installation will also reduce each year.

For example, if a 6.6kW system was to be installed on December 31st, 2020, it would receive a total of 100 STCs. Meanwhile, the same system, installed in the same place on January 4th, 2021 would receive 91 STCs. The average price recently for STCs has hovered around $38 of per STC, so using this figure this is a price difference of $342 that you would lose from your rebate, by delaying installation just a few days.

What this means for rooftop solar power

The increased affordability of solar panels has seen Australia achieve the highest rate of household solar panel installations in the world, with around 29% of homes with rooftop solar PV. This year, about 2.77 million residential solar power systems have been installed across Australia.

Next year, the STC rebate value is set to drop by 9.8%, causing the out-of-pocket price of a 6.6kW system to increase by more than $350. With longer installation wait-times anticipated during the summer months, we recommend you consider purchasing your solar power system sooner rather than later, to ensure you beat the January 1 deadline.

To join the thousands of Australian home and business owners who have invested in solar, give Infinite Energy a call on 1300 074 669, or click here for a no obligation quote.


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