STC spot prices have remained pretty strong so far this year, making it a great time to go solar – find out why.
Australia’s hugely popular “solar rebate” is almost always accessed as an up-front discount rather than something you have to apply for after forking out the full system cost. Generally speaking, the prices you see advertised for systems include that up-front discount.
The subsidy is based on Small-scale Technology Certificates – or STCs for short. These bits of virtual paper can only be created after a system is installed. When you buy a solar power system, you agree to sign over the rights to them to get the discount and the installation company will claim the STCs post-installation.
The number of STCs accompanying a system depends on three elements:
- The system size in terms of solar panel capacity1
- The year of installation
- The geographical location of the installation
The value of an STC fluctuates with market conditions. There is a ceiling on value ($40), but no floor; so they can theoretically drop to $0. That has never happened, but there was a period some years ago when they dropped to $26.
STC Spot Prices In 2021
The following graph sourced from DemandManager (and butchered by me) shows that this year STC spot prices (in blue) kicked off around the $38 mark and generally stayed above that level to this point; currently around $38.70. These are good prices in terms of supporting high solar rebate values.
For example, a eligible 6.6kW system installed in Sydney at the moment would be entitled to 91 STCs and attract a rebate value of around $3,5002.
What would happen if STC spot prices dropped to that low of $26 mentioned? In that scenario, the rebate would be worth approximately $2,366. A difference of more than $1,100 could make the difference between many households being able to afford to install a solar system and not.
So, what are the chances of STC spot prices plummeting? I have no idea, but over the last 12 months the spot price doesn’t appear to have dropped below $37.20. At $37.20, the rebate value for a 6.6kW system would be around $3,385.
At the maximum value of $40, the rebate would be $3,640.
But if the last 12 months or so has taught us anything, it’s to expect the unexpected and holding out for potentially $140 maximum more may not turn out to be the best move. Also bear in mind the longer you put off installing solar panels, the longer you’re being locked into electricity bills much higher than they would be with solar energy.
If you’d like to see the impact of changes in values and what sort of rebate you can expect in your part of Australia, try the SolarQuotes STC calculator, it’s super-easy to use.
Footnotes
- The number of STCs being based on solar panel capacity is another reason why it’s good to “oversize” a solar power system. Under the relevant rules, you can add up to 33% more solar panel capacity than an inverter is rated for; i.e. 5kW inverter = 6.65kW of solar panels. This will also help ensure the inverter is working at its maximum capabilities more of the time. With the cost of solar panels so low nowadays, it makes sense in most scenarios to get as many on your roof as you can while the installers are up there. ↩
- But note that solar installation companies may offer $2-3 less than the STC spot price per certificate to cover the administrative cost of handling the STCs as there’s a bit of work and some fees involved. ↩
About Michael Bloch
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Hi, i live in Adelaide and some solar installation companies are giving to me quotes where they offer me a merely $34 for each of my 91 STC’s, i’m thinking of keeping my STC’s and sell them online where every green traders (but the STC clearing house at $40 although the entire process is more complicated and you get paid after a long waiting time) offer me at least $36, it seems to be an easy operation (just 1 form) and it also means almost $200 extra in my pockets…
Could STC prices theoretically rise above $40? If the deeming period is near zero in 2029, wouldn’t the low supply and unchanged demand for STCs, by liable entities force prices to go to or near$65 (the fee these liable entities pay per missed STC surrendered)? $40 isn’t a price ceiling, but actually the set price at the clearing house?