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I regularly get asked whether the government incentive scheme is ending or even still available.
The regulatory body for the facts on this topic is the Clean Energy Regulator (CER), not to be confused with CEC (Council). I would not recommend the information found on open forums such as whirlpool or google to be very accurate.
More to the point of this piece, I bet most of you may have a few more questions about this so called rebate or “point of sale discount”. I remember when we had our first system installed and on the day of signing up, I received no background information on what these (STC’s) Small-scale Technology Certificates were about. I was left wondering if I got my fair-share of a discount which stuck with me for years.
I pride myself on providing educational facts to help our clients make well informed decisions and this is no different. Let’s clarify what this “discount” is.
The scheme entitles small-scale renewable energy users to credits, calculated on a few variables. Let’s look at what goes into the calculation.
For our example, we are referring to PV solar in metro Perth.
Variable 1 Generation size
Refers to the panel output capability that is to be installed.
Example: 24 x 250watt panels = 6000watts or 6.0kW
Variable 2 Lifetime
A sliding scale currently sitting at (15) years.
At the start of every calendar year, this variable will decrease by (1).
Example: currently 15. Jan 1st, 2017(14). Jan 1st, 2018(13). Jan 1st, 2019(12)
Variable 3 Area Code
This figure has been calculated on climatic conditions associated to each
location. Every designer should have access to these records that allocate post codes
to a specific number. It is this number that we use for our third multiplier.
Example: majority of Perth Metro postcodes
Variable 4 Share Price
Governed by demand, the STC share price had been capped to a maximum of $40.
Writing this today, it stands at *just checked* Wow! $40.00!! Best I have seen in more
than 12 months. Yet this is not the figure offered to the home owner. Every retailer has
associated costs for processing these credits. The most common include, using a
registered trader to legally process the shares, but also using a registered and legal
platform to keep record of every credit created. Both of these come with fees that the
retailer must account for in their costs, thus reducing the final price offered.
Example: based on today’s price
Let’s assume you have seen TV adds that talk about getting $5000 off from STC’s. Many people call up wanting to get a big discount.. Put simply
The more panels you install, the larger the rebate. We’ll do a comparison to show you.
24 panel install: 6(kW) x 15(years) x 1.382(area code) = 124 credits x ($37)
Discount = $4,588
12 panel install: 3(kW) x 15(years) x 1.382(area code) = 62 credits x ($37)
Discount = $2,294
The credits that a system is entitled to are shares for trading. Each credit is equal to (1) Megawatt Hour of electricity generation. By producing this energy in a carbon neutral way, we can agree that this has reduced the demand on less environmentally friendly energy sources.
For these credits to hold any value there must be someone willing to buy them. The most common acquirers of STC’s are those with big carbon emission outputs. Allowing the large companies to be indirectly involved helps to push for cleaner energy, but also helps to reduce their taxes. It is cheaper for these companies to invest in small-scale projects, than it is to re-develop their process plant.
The main outcomes include the home owner receiving a reduced system cost, ongoing support for the solar industry and less taxes for the big guys, through clean energy investment.