If your business uses a solar energy system in any of its properties, you may be entitled to recover some of the costs of installing it through what are called small-scale technology certificates (STCs).
The system of STCs is believed by many to be a government ‘rebate’ – it isn’t.
The Government doesn’t give you money for installing a solar system (that would be too good to be true!). However, it does create a market-based way for you to recover the money you’ve spent on a solar system.
- The Government subsidies your solar system
If your business invests in a solar system, a Federal Government scheme called the Small-scale Renewable Energy Scheme acts as a “subsidy”, helping you with the costs of installing it.
You can take advantage of these subsidies by installing ‘small-scale renewable energy systems’ on your property, which includes things like solar panel systems and solar water heaters.
For every megawatt-hour of power that your system generates, you’ll be entitled to create what is called an STC.
Administered by the Clean Energy Regulator, the STCs are given to you “up front” for your solar systems’ expected power generation from the year of its installation until 2030, when the scheme comes to an end.
The number of STCs you can generate differs depending on:
- your location;
- the date on which you installed your system; and
- the amount of electricity created.
In the “Zone”
Australia is divided into four different “zones” which determines the value of your STC.
As you’ll see, the incentive rate decreases as the Zone numbers increase. The STC value in Zone 1 will always be highest.
The STC postcodes change from time to time – so it’s important to check the sone you in to determine the value of your STC.
You can either create the STC yourself or you can engage a registered agent to do it for you.
- Selling your STCs
STCs are a commodity – a resource your business can use to generate revenue.
You can sell your STCs to recoup some of the costs of buying and installing your solar system.
You can sell them in:
- an open STC market (where the price is unregulated); or
- the STC clearing house, an online marketplace where you can sell your STCs for $40.00 (not including GST).
Before you sell, you must register your STCs on the Renewable Energy Certificate (REC) Registry.
This is an online system administered by the Regulator to monitor the ownership of STCs and will allow you access to the STC clearinghouse.
You can sell your STCs to anybody with a REC Registry account, but your main customers will be what are called Renewable Energy Target (RET)-liable entities (typically those entities that emit fossil fuels).
These entities have obligations under a separate Government scheme (the Renewable Energy Target Scheme) to purchase STCs and surrender them to the Regulator every quarter.
How much can I recover?
Quite a lot, actually.
It will depend on the market price of the STC, which can escalate up to around $35.00.
But it pays to act quickly. The amount you can recover from the STC scheme will reduce by around one-fifteenth every year (as it has been since its introduction) until it reaches zero in 2031.
You can see the current STC market prices at Demand Manager.
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ower Saving Solutions specialises in helping Australian businesses take advantage of solar energy by installing high quality solar systems. Visit our website today to start discussing your business’ electricity needs.