The inflated STC Price Scam : The Solar Cowboy’s Favourite Trick?

a cowboy

Don’t fall for it!

I’m angry.

I get a lot of emails asking for me to look over quotes. I try to answer every one. Sometimes it takes a couple of weeks to reply, but generally I manage to reply.

Tonight I got 3 emails in a row with quotes from 3 separate companies which all appeared to be trying the same trick. They appear to be deceiving the customer into thinking they are getting a great deal and then hitting them with a bill for thousands more than the quoted price when the system is installed.

I love the solar industry, and to see these guys operating like this makes me so freaking angry I want to scream!

Ladies and Gentlemen, tonight I present to you THE INFLATED STC PRICE SCAM…

In a nutshell:They quote a low price based on a $40 STC price, then they use the current (much lower) rebate prices to jack up your final price.

How to Foil  “The Inflated STC Price”

Remember that the amount of rebate that you get is based on the price of a thing called an STC certificate, which changes from day to day, just like stock prices can.

Read the contract carefully to find out what STC price the total system price is based on.  You can see today’s STC price here.

If they are quoting a $40 STC price then alarm bells should start to ring. At time of writing (April 2012) the STC price is $28. It hasn’t been $40 for years. $40 is the government mandated maximum price that STC will be capped at if they ever go that high (unlikely).

If they are quoting based on a $40 STC price you can be almost certain that the STC price quoted is not guaranteed.

What does that mean? Well let’s go through the quote I am looking at now for  a 1.5kW system:

RECS DISCOUNT ( 94 @ 40.00 ) – Zone 3

Unit Price $-40.00

Total Rebate: $-3,760

If the system is installed next week, the solar “company” will be lucky to get $27 for the STCs from the aggregator.

So the rebate will only be 94 STCs @ $27 = $2,538

That is $1,222 less than the rebate used to calculate the quoted price.

So you are in all likelihood going to have $1,222 added to your invoice. Surprise!

Nice eh?

And if you are looking at a bigger system the discrepancy could be many thousands of dollars.

——

Please Note:

I’m not saying that all installers who don’t guarantee their STC price are cowboys.  Some installers will guarantee the STC price in the quote, some won’t. It is the ones that knowingly quote $40 when they know the current STC price is a lot lower that are the ones to watch out for.

But if they don’t guarantee the STC price then the good guys will be totally upfront and transparent that the final amount payable may go up (or down) based on the STC price on the day of the install. No hide the salami!

If paying a fixed price is important to you – then you should choose an installer who guarantees the STC price quoted. If there is any doubt then don’t be afraid to circle the price in pen and add the comment ‘This contract is signed for this fixed price only’. And remember to keep a copy!

About Finn Peacock

I'm a Chartered Electrical Engineer, Solar and Energy Efficiency nut, dad, and founder of SolarQuotes.com.au. My last "real job" was working for the CSIRO in their renewable energy division.

Comments

  1. Cheryl Guy says

    Hi Finn
    Do you normally see quotes for solar grid systems that have a huge price difference – I am talking over $10,000 in variance?
    Cheryl

    • Hi CHeryl,

      Grreat Question: Typical prices for grid connect solar systems are here:

      http://www.solarquotes.com.au/how-much-do-solar-panels-cost.html

      The only time I would expect to see quotes outside the price ranges on that link are if you are being quoted for either AC Panels or absolute Rolls Royce panels such as Sanyo HIT or the top of the range Sunpower panels. For example I believe a 5kW Tindo Solar system (AC panels) would probably be in the vicinity of $20,000 fully installed after rebates. A budget 5kW system with cheap panels can be had for about $10k.

      There are a few firms out there that go for the hard sell and charge about $10,000 more than everyone else for similar hardware. Their tactic appears to get you with a flyer or a door knock and pressure you to sign up ASAP so that you can’t shop around or get another 2 quotes. Watch out for those guys.

      Cheers,

      Finn

      • Hi Finn,
        Thanks the your marvelous web site. What would one expect to pay for the installation of 12 Sunpower SPR318 panels with an internal switchboard and a Fronius inverter?
        Recommendation of a reputable company in Melbourne would be much appreciated?
        Regards
        Andrew

  2. Hey Finn, Great web site.
    My questions revolve around an off the grid system. Im building (havent started yet) a small shed (12×12 roughly) on a block with no power. Its early days yet but just want to do as much research on it as possible. The shed will be 1/3 house 2/3 work shed. I will need to be able to run a welder, grinder & drills. Im thinking a solar powered setup with generator back up. Thought id get your opinion on where to start. Anything you could tell me will be greatly appretiated.
    Cheers

    • The welder is gonna use an enormous amount of current, so you’ll need to be careful designing a system that can cope with the welder’s power needs. Your best bet is to start talking to a solar installation company that is experienced in off grid solar, and get a feel for what you are up for dollar-wise by reading this blog post about off grid solar costs.

      • Richard Clowes says

        Have you considered an engine powered welder such as the Lincoln Weldanpower? Lets you weld and run power tools, washing machine etc.

    • Karl,
      Also you may be able claim an STC rebate for the off grid system. Have a look at http://www.envirocertificateservices.com.au for more information if you like or check out the Clean Energy Council Website which will list the amount available for the non grid connected.

      regards,

      Mick

  3. Do your own paperwork and get $40/STC?

    http://ret.cleanenergyregulator.gov.au/Certificates/Small-scale-Technology-Certificates/STC-Clearing-House/stc-clearing-house#access

    “You have the option to sell your small-scale technology certificates through the STC Clearing House for a fixed price of $40 (excl.GST).”

    • Good Luck with that one!

      If you want to try and get $40 for your STCs you are going to have to be prepared to wait for years (possibly forever).

      Have a read of the terms on the ORER government website, after the single sentence you quote and you’ll find that there is a waiting list of 6757 people who are waiting for their $40 STCs and there is a surplus of 6,369,327 STCs that noone currently wants to buy. The first person on the waiting list has been waiting since 25 Feb 2011.

      You can see the waiting list here:

      https://www.rec-registry.gov.au/clearingHouseTransferList.shtml

      My guess is that by the time you get your $40 per STC the Net Present Value of the STC will be less than the current STC price on the STC spot market.

      If you take the market price for the STCs, however (about $25 at time of writing), you’ll get the cash almost immediately.

      • Simple calcs:

        1.6% (March 2012) inflation over 2 years (assumed time to get cash from Clearing House)

        40(1.016)^-2 = $38.75

        Difference:

        38.75-25 (spot rate as of date above)= $13.75

        25/13.75=0.55 – which is 55% more by waiting 2 years

        If you paid cash for system, you are getting around 50% return on investment for patiently waiting for 2 years.

        Seems like a wise investment…

        • NSW installer says

          Those figures look great if you get your money back in 2 years we have been waiting 17 months so far until the market price gets closer to $40 no one will get their money from the clearing house.

  4. Darren Kelly says

    Finn
    I about to sign up a deal with a queensland company Ingenrno Energy
    But will look at a lease option. What do you think about lease options??
    Darren Kelly
    Cummins SA 5631

    • A lease has these advantages:

      * The solar company takes full responsibility for the performance and maintenance of your system over the life of the install.
      * Less up front cash required.

      The only disadvantage is that it will cost you more money over time than if you pay for everything up front because they have to take their costs out of your lease.

      But Ingenero are a fine company if you choose to go ahead.

  5. Reg Hodges says

    Hi Finn. What a great website!! I wish I had seen it before I went ahead with my solar installation. I would have, perhaps had second thoughts. Needless to say, my installation is now in and working. It was installed by Todae Solar and cost me a tad over $6000.0 for the 3.25Kw system. I am happy with its current operation. What I am NOT happy with is the paltry sum that I get from Origin Energy of $0.06 per Kilowatt FiT.
    The current costs for electricity from the grid here in NSW are $0.3129/KWh Peak usage with $0.1229/KWh Off-Peak usage. I get a 10% rebate on usage from Origin. Plus of course the Service to property of approx. $126.00.
    OK, so what’s your point, you ask? Well, I would like to query that the current rate of FiT is grossly unfair and should be at least around $0.25/KWh. Why, you may ask? Well the Electricity Generating companies such as Energex say that the current FiT is calculated at this price because they have all the maintenance of the lines and power stations etc. Surely that is calculated in the price of Service to Property?
    My contentions are:
    1. that if the FiT were a more reasonable rate, more households would be getting solar or other forms of alternative energy generation. Which would LOWER the maintenance costs for the Generating Companies as they would be able to use this energy instead of increasing their own generating facilities.
    2. where is the COMPETITION element for the billing companies such as Origin and AGL etc when the State Govt. tells these companies what they must charge for electricity? Or is it collusion? As they all charge exactly the same amount in NSW! If this was petrol and the Petroleum Companies all charged the same they would be smartly visited by the ACCC!!
    I suppose I am just having a bit of a rant here, but the points I have made are certainly worth considering for someone who is contemplating going to Solar/Alternative energy generation.
    I would appreciate any comments you may have.
    Thanks,
    Regards,
    Reg Hodges

    • I was planning to get a 5kw system, but after further research and discussions I worked out it wasn’t worth getting more then 3kw.
      We are a fairly heavy power household (lots of computers/electronics/pool) but because the PV only offsets the usage at the time of production, the payback for producing excess power against the extra cost of the larger PV just isn’t there. If I knew I could produce extra that would be offset against my usage later at night it would make sense, but it doesn’t work that way.

  6. I’ve got a quote where they have stated a REC price of $10. The quote also says the installer assumes all financial risk associated with the REC price so the price quoted is fixed and won’t change.
    I guess I’m not really worried by how much they want to price the RECs at if they are fixing the quote price, and ultimately it will be a direct comparison of their fixed price against others.
    I suppose at the end of the day the $10 price gives them some extra wiggle room to drop the price further if they need to without carrying an unreasonable risk for fixed price quoting.

  7. This is a cowboy technique, but generally not for the reason you’re pointing out. I used to work for a reputable solar installer in QLD, and would lose sales because of this scam all the time. To make up some figures we would advertise a $6,000 system with a market STC price of $20, so you paid $4,000. A competitor would advertise a substantially similar system as an $8,000 system, tell you they’ll pay the full $40 for the STCs so you’d pay $4,000. People would then look at the second system and see that it was “worth more” ($8,000 vs $6,000) and also think that we were ripping them off by paying half as much for the STCs. This made them look good, and us look bad, when in fact all things were equal. People would even pay more for poorer systems because of this at times. I’d urge people to ignore made up RRPs and huge rebates, and just look at the bottom line. Most panel and inverter manufacturers are foreign, and don’t set retail prices in Australia, so the only one “recommending” the RRP is the person who’s trying to claim it’s worth a lot so you’ll think it’s great. Don’t sign any contract that doesn’t list a guaranteed figure that you’ll pay in the end.

  8. Just had a visit from Citisolar in Ipswich. Salesman rather than a technician fronted up and stayed for 2 1/2 hours. Was very good at his spiel, but I was aware of what he was doing. He followed all the program, nice house, discount for advertising, special pricing and trying to push Sanctuary Energy as a supplier without telling me they used differential tariffs! How Sanctuary can still offer 30 cent rebate was beyond me until I saw that it is only paid on excess energy provided to the grid! Not much chance of excess energy from this little black duck and the 2 KW system I am interested in! He also made a lot of telephone calls to his manager. Price started at $11,100 but slowly dropped to a ‘good’ deal at $7,100. It may be good business, but from my point of view, not for me considering as this visit was a result of a cold call that happened to arrive at the right time. No mention of the current STC price and who much they would gain from that either. They are also pushing Perlight blackbeauty monocrystalline panels with an Aurora inverter. The inverter seems OK but I am unsure about the panels. Any thoughts on this arrangement. I am waiting for more quotes from other suppliers.

  9. Hi… Has anyone had dealings with Costless
    Solar from Cranbourne Victoria?

  10. I’m looking for an honest installer in Sydney’s Northern Beaches. I don’t want a ‘deal’, I already own the panels and inverter. I just want a qualified person to hook it up, as although as an engineer I have designed hundreds of industrial systems, the pathetic laws don’t ‘allow’ me to do it myself.

    Most companies I’ve spoken to refuse to use my equipment, saying that it isn’t their ‘business model’ WTF? For the others, the prices I am being quoted for installation are ridiculous, with some installers trying to tell me that the STCs are theirs. NO they’re bloody NOT!

    At the end of the day, this is a 1-day job that I am prepared to pay an honest hourly rate for + materials), but where are the honest installers?

    I just want to pay a fair amount for an honest days’ work. As a consulting engineer with 35 years’ experience, it is not unusual to charge $1000 for a days’ work occasionally, but I am not paying tradies $1000/day each!

  11. Perhaps this article needs a minor revision because here in December 2016, the STC spot price is $40, and the quoted price I’m getting on quotes is about $37-$38, with the lowest $36.
    Taking into account that the “financial incentive” starts to reduce from next year, I’m surprised that the STC value hasn’t dropped lower.

    I would love to know how the Solar companies decide how many STC’s a given system is worth. I thought that it was a simple calculation based on #kW of quoted output (Panel Wx #of panels) with a factor for where you live. One company bravely told me that lots of factors including the efficiency of the system are taken into account…

    • Ronald Brakels says

      I’m afraid that even with STC prices at just short of $40 the best price available for them is about $38. But for households the bottom line is the total price of the solar system. For most people the exact price of STCs isn’t really relevant.

      I wrote about how the number of STCs are determined in this article:

      https://www.solarquotes.com.au/blog/solar-panel-rebate-phased-1st-january-2017/

      It simply depends on the zone you are in (most Australians are in zone 3), the number of kilowatts of solar panels, and the number of years left in the scheme. Efficiency or other factors are not included.

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