Rooftop Solar STC Value Still Solid

Value of the virtual bits of paper underpinning Australia’s national solar rebate is looking very strong – and that’s good news for solar buyers.

Australia’s solar panel “rebate” can knock a big chunk off the up-front cost of going solar. For example, it can save around $4,000 on a 10kW solar system depending on a few factors.

The subsidy is based on Small-scale Technology Certificates (STCs). The number of certificates accompanying an eligible system depends on its size (solar panel capacity), the geographic location of the installation and the year it was installed. While STCs can’t be created until after a system has been installed, solar businesses offer their value as an up-front discount. The system buyer signs over rights to the STCs once the installation is done, and the installer (or their agent) then creates and sells the certificates.

The value of these certificates varies depending on market conditions.  Their maximum value is $40 each and minimum value is $0.

Spot STC Prices Remain Strong

The very good news is STC values have remained pretty much rock-solid for the last 12 months and spot prices were sitting around $39.90 as at the middle of last week – so bumping up against their maximum. How long this will continue is anyone’s guess, but I’m not aware of anything that could see STC spot prices plummet in the short-term.

But something to bear in mind is the subsidy drops in value annually; i.e.; the number of certificates a system is eligible for reduces on January 1 each year. This is part of a planned phase-out.

Why Solar Buyers Don’t Get Full STC Value

While STC spot prices are just about as high as they can go, the value per certificate solar buyers will receive in terms of the up-front discount usually won’t be as much. The reason for this is the solar business doesn’t get to cash them in until after the installation has taken place, and there is some administrative overhead involved. For example, if the solar company uses a registered trader to unload the certificates, that party will also want their piece of the action.

Based on a $39.90 spot price, solar buyers can expect to receive a certificate value of around $35 – $37 each. Some installers may appear to offer the full spot price value on a quote, but it’s safe to say whatever admin expenses are involved are factored into the overall system cost.

As far as I know, it’s possible to forgo the “rebate” and sell the certificates yourself. But given the complexity and headaches involved, the effort probably wouldn’t be worth it. I haven’t heard of anyone doing this in recent years.

Calculating Your Solar Rebate

As mentioned, there are a few elements involved in determining a solar rebate figure. But instead of tussling with a formula, the easiest and fastest way to get an idea of how much subsidy a system will be eligible for is to use the SolarQuotes STC calculator. After entering a few basic details, on the results page you’ll see how many certificates would accompany the system and there’s a slider for adjusting STC value.