If you are installing a solar power system, you are most likely eligible for government incentives. Australian government incentives are available for both households and businesses. Part of Australia’s Renewable Energy Target, these incentives come in two types. Small-scale Technology Certificates (STCs) and Large-scale Generation Certificates (LGCs).
Small-scale Renewable Energy Certificates (STCs)
STCs help reduce the upfront cost of installing solar systems under 100kW. STCs are calculated based on the expected amount of power generated by a solar system until 2030. So, basically, the bigger the system is, the most STCs will be attributed. As a guide, one STC is equivalent to one megawatt-hour of expected electricity produced.
The number of STCs you are eligible for also depends on the location. Australia has been divided into 4 zones based on how much energy a solar system is expected to produce in the given area (see map below). A system installed in a sunny area will receive more STCs than the same system installed in a less sunny location, under the expectation that systems in a sunny location generate more energy.
What is the value of an STC?
STCs work like currencies or shares. In a nutshell STCs are tradable certificates and their values vary with supply and demand. They can be sold and bought on the open STCs market where prices are subject to market forces or through the STC clearing house at a fixed price of $40 (ex GST).
Solar companies and installers apply STCs in the form of a discount, deducted from the total price of your system. When comparing prices, make sure you use the “out-of-pocket” prices.
You can calculate the STCs in your area with the Clean Energy Regulator’s STC Calculator here.
Large-scale Generation Certificates (LGCs)
Large-scale Renewable Energy Target (LGC) is similar to STC for systems above 100kW. One LGC equivalent to one megawatt-hour of electricity generated. Like STCs, LGCs’ value varies depending on supply and demand.
The main difference between STCs and LGCs is that LGCs are produced on an on-going basis, as opposed to STCs which are created upfront.
In order to be eligible to create LGCs, the system must be registered as a power station with the Clean Energy Regulator (CER). Once registered, you’ll have to send your electricity meter reading to the Renewable Energy Certificate Registry for certification. The Clean Energy Regulator certifies the LGCs on a monthly, quarterly, or yearly basis. Once validated, LGCs are available for purchase and may be bought and sold by traders and businesses through the LGC open market.
Renewable Energy Certificates to phase out
As all good things come to an end, these incentives will reduce every year to end completely by 2030. LGC can be created until this date. STCs reduce by 1/15 every year and are calculated with the following:
Energis can assist you in accessing incentives. For further information, contact us on 13 782 217 or fill out an inquiry form.
