By Julie Curnow

Solar hot water systems become cheaper as STC price rises to new high

The Small-Scale Technology Certificate, STC price from Green Energy has today risen to $37. This is the highest level since around June 2010.

So what you may ask?

Well, certain green products (solar hot water, heat pump hot water, wind power, hydro power and solar powered photovoltaic systems) attract STCs. This means that when the STC price rises the purchase price of those products fall.

For example, Rinnai’s family sized Equinox solar hot water system retails for $4,163 supplied and installed.

From this price you deduct STCs. Rinnai’s Equinox solar hot water system is very efficient so it attracts 39 STCs (measured by an independent government body, the Clean Energy Regulator).

STC Map of Australia

With STCs trading at $37, the price of your Equinox is reduced by $1,443 (39 STC x $37 per STC) and costs $2,720 installed, saving over a third of the cost!

This example is based on STCs in zone 3 which covers Perth, Sydney, Brisbane, Canberra and Adelaide. Other zones attract different quantities of STCs.

For a two panel Equinox solar hot water system, every $1 change in the STC price will cost you or save you $39 on your system price.

The STC price got down to its lowest around June 2011, at $18. At that time you would only get STC totalling $702 deducted from the price of your solar hot water system.

So why is there such a big change in STC prices?

STCs are traded, like shares on the stock exchange, so their price rises or falls depending upon the level of supply and demand.

The supply of STCs comes from home owners and businesses installing green products such as solar hot water, heat pump hot water, wind powered and photovoltaic systems. The supply of STCs has been artificially high for the last couple of years because of generous federal and state government rebates for installing photovoltaic systems and falling solar panel and inverter prices.

The demand for STCs comes from large businesses (typically electricity retailers) that are required, under the Renewable Energy (Electricity) Act 2000 to purchase STCs to mitigate their carbon emissions.

With historically high supply and static demand the price of the STC fell to a low of around $18 mid 2011 when federal rebates and feed-in tariffs for photovoltaic systems were at their highest.

STC rules and eligibility are determined by the government, managed by the Clean Energy Regulator.

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