Ongoing demand for solar power drives up STC price

CER proposes change to federal solar rebate amount

A predicted increase in demand for Small-scale technology certificates (STCs) in 2018 which will affect the STC price is good news for solar retailers and customers.

According to a new analysis by the Australian Clean Energy Regulator, there was a 25 per cent increase in STCs in 2017. This is likely to continue into 2018.

STCs are created by the installation of a small-scale renewable energy system, like a rooftop solar system. They are a kind of upfront subsidy on your home solar installation.

The higher the STC price, the more of a discount on the cost of installation the customer receives. This discount is passed on to the customer by the solar installer, for example Energy Matters.

According to the CER, there remains “considerable uncertainty as to whether, or when, a STC shortage may arise”. However, if a shortage does occur, it’s unlikely to be before mid-2018.

Australia’s uptake of rooftop solar

The CER’s 2017 analysis shows a 25 per cent increase in small-scale renewable system compared to the same time last year.

STC price: surplus/deficit and spot prices from 2011 (Source: Clean Energy Regulator)

STC surplus/deficit and spot prices from 2011 (Source: Clean Energy Regulator)

Over 146,000 small-scale solar panel systems have been installed so far this year with a collective capacity of 887 MW. This is a 33 per cent increase in installations compared to 2017 and a 49 per cent increase in capacity.

Current projection indicate the installation capacity for 2017 will reach approximately 1.05 GW. This will make 2017 the highest installation year on record, surpassing the 1.035 GW of installs in 2012.

Owing to the high rate of STC creation in 2017, the 2018 small-scale technology percentage is expected to increase, increasing demand for STCs next year.

The Renewable Energy Target and the STC price

STCs were created by the Renewable Energy Target (RET), which operates through the creation of the tradable certificates.

This creates an incentive for additional generation of electricity from renewable sources. Certificates are created and issued through the REC Registry—the online platform managed by the Clean Energy Regulator.

Australia has already met its 2020 target under the RET, which is to be replaced by the National Energy Guarantee (NEG).