As of 20th July 2017, the prices of STC have dramatically fallen. Unfortunately, that affected every single solar industry company…
As of 20th July 2017, the prices of STC have dramatically fallen. Unfortunately, that affected every single solar industry company in Australia. The STC dip price has caused an enormous problem within the industry, and in turn, increased 5kW solar power systems costs by at least $1000. However, do you know how STCs work, and when the prices expected to drop again?
The first question that you need to know is what STCs are? Small-Scale Technology Certificates are part of a government incentive scheme for householders and businesses that have solar power systems up to 100kW. That scheme is called the Renewable Energy Target, or RET. For every megawatt-hour of renewable energy that is generated by an accredited solar panel, they will receive an STC.
The number of STCs that you are entitled to have some particular prerequisites for the calculations. In this section, we will take a quick look over what those are, and how you can calculate the number of STCs that you are entitled to.
Therefore, for example, if you have a system capable of 6.48kW, with a 5kW inverter and 24 x 270W solar panels in Perth, you use this as your calculation:
6.48kW x 1.382 (zone 3) x 11 (2020) = 98.50896 STCs.
If you wish to make a calculation based on your own circumstances, please check this online calculator.
STCs are not a fixed price value. They are very much like shares in this respect, as they fluctuate following supply and demand.
However, as with stocks, owners, and registered agents of these small-scale renewable energy systems can sell through two options:
However, there is a process that you must follow to trade those STCs. In the next section, we will look at the process.
The process is this:
The clearinghouse can have some significant price differences. Furthermore, they can also go into a surplus. It is when there is a surplus that those prices are immensely lower than that of when there is an undersupply. Knowing what the renewable energy target is of the year that you are in is how you calculate if there is a surplus or not. Therefore, the longer you wait, the lower the price will be, hence the problem that we now face.
At the time of writing this, the STC price at the open market is $38. Therefore, there is no reason why anyone would purchase through the clearinghouse, even if there is a surplus. Furthermore, you need to know that STC sales will have a different turn around times, based on the number of sellers and buyers. If there are more buyers than sellers, your STC will sell instantly. However, if there are more sellers than buyers, you could sit on yourSTCs for an infinite amount of time.
As you have seen, the speed at which you require a sale can have a dramatic impact on their cost. However, if you wish to sell them quickly, some retailers offer you a POS (Point Of Sale) cost to sell them on your behalf. Many of the solar customers will decide to exchange their STCs for a discount on their PV system. However, one thing you have to note is that the lowest price an STC has held is $16, while the cap remains at $40.
If you use that calculation above, at a median of $28 per STC, you will see that you can gain a $2,758 discount on a high-quality system, which equates to around 20%.
It is unlikely that the price of STCs will rise again because of the changing and decreasing the third point of calculation. Therefore, you will probably never get a chance as good as today to sell and upgrade your system. Remember that the better the system you buy now, the more STCs you will gain.