Investing in a solar power system for your home or business is currently still affordable through several government incentives. One such incentive is the Small-scale Technology Certificate (STC) or Large-scale Generation Certificate (LGC).
These government initiatives are provided under Australia’s Renewable Energy Target (RET) and incentivises the investment in renewable energy by making it more accessible to homes and businesses across Australia.
Commonly referred to as a ‘rebate’, these financial incentives are not paid for by the government!
It works through the creation of ‘certificates’ which are traded for a monetary value online. Through these schemes, anybody generating green energy can create certificates and ‘sell’ them to any electricity retailer or wholesale purchaser of energy in ‘percentages set through regulation each year’*.
STC:
STCs are calculated by your system’s estimated output over a ‘deeming period’ of 15 years from 2016* and is reduced by one year each year until 2030.
The number of STCs allocated to you is calculated by:
- The size of your solar power system;
- The location of where your solar power system is to be installed.
To estimate how many STCs you will receive please visit: [https://www.rec-registry.gov.au/rec-registry/app/calculators/sgu-stc-calculator].
To accurately calculate the number of STCs that can be created for your installation, you will need to consult the Renewable Energy (Electricity) Act 2000, the Renewable Energy (Electricity) Regulations 2001, or get advice from a solar industry professional.
It is important to recognise that only the owner of the solar energy system at the time of installation is entitled to the STC.
STCs can only be created within the first 12 months after the installation of your system. However, no STCs can be created, and no financial benefits will be given towards your STCs after 1 January 2031.
However, there is one key thing we would like for you to take away from this section:
STCs are simple.
You don’t have to think about applying for it. Your installers will take responsibility for all the paperwork it takes to apply for this scheme, and on your end, you will receive a ‘discount’ directly applied to the total price of your system!
LGC:
Created for any solar power system that can generate 100kW or more, LGCs are the government’s biggest solution towards the continued investment into green energy.
To receive the LGC, your business must first apply for accreditation as set out by the Renewable Energy (Electricity) Act 2000 (REE Act) and the Renewable Energy (Electricity) Regulations 2001.
To apply for accreditation visit: [http://www.cleanenergyregulator.gov.au/RET/Scheme-participants-and-industry/Power-stations/Applying-for-accreditation]
The application must:
- Meet application and eligibility requirements (outlined in section 13 & 14 on the REE Act 2000, and regulation 4 of the Renewable Energy (Electricity) Regulations 2001).
- Include all required information and supporting documents.
- Pay application fees.
- Operate in compliance to Commonwealth, state, territory or local government planning and approval requirements.
It is important to note that only the ‘registered person’ can make an application for ‘power station accreditation’. Therefore, your business must nominate a suitable candidate to apply to be a registered person before making the application.
LGCs are ongoing and tradeable – meaning that after the system has been accredited, installed and first starts producing power, it will continue to create certificates. Therefore, rather than a one-time discount, LGCs provide an ongoing source of revenue for their owners. Due to this, it is important for you to monitor your system and the market, as the unit price of one LGC will fluctuate depending on supply and demand.
With that said, all good large-scale solar system projects and designs MUST focus on the initial total cost of the solar system – rather than relying on LGCs to support the project.
To find out more in-depth information regarding LGCs please visit: [http://www.cleanenergyregulator.gov.au/RET/How-to-participate-in-the-Renewable-Energy-Target]
