How Does it All Work?
The Australian federal governments offer the owners of rooftop solar systems an incentive that’s often referred to as a rebate. It’s not actually a rebate as you don’t have to apply for it; in fact, the incentive is the Small-scale Technology Certificates (STCs) which you can use against the initial cost of installing your system.
STCs fluctuate in value
The value of the STCs fluctuates according to supply and demand. The lowest value the STCs have had is $16 and they’ve never risen any more than to $40, which seems to be their unofficial cap.
Federal government body the Clean Energy Regulator sets the market size for STCs each year after deciding how many small-scale renewable energy systems they anticipate being installed in the coming year.
When the market looks like it’s in line with CER projections, supply meets demand, which stabilises prices. Prices have remained stable for the last few years, with STCs staying around $37 each. This value works out as around $3,500 for a 5kW system – a subsidy of around a third.
Price rises on the way?
Australia has some of the lowest prices for PV systems, largely due to the STC incentive. Once an installation company takes on your commission, it can create STCs and sell them on to traders. Installers tend to calculate their prices based on what they expect to get for their STCs, so when the value is high, you get a bigger subsidy.
So, because the value of STCs is set to drop, these subsidies may well decrease. Installation companies have two choices – they can maintain their existing subsidised prices and absorb the losses (which may put them out of business) or they can increase their prices and risk losing customers.