For several months it has seemed that something was brewing in the STC (Small Scale Technology) market.
So what is an STC?
Your Solar system, will be discounted by 1 STC for every Megawatt-hour of energy your system is expected to generate until 2031.
In monetary terms: a 6.6kWh system purchased in early 2017 would have had an STC discount applied of $4864. In July 2017, the discount is reduced to $3840.
To sum up this issue… the lower the STC price, the more it will cost to install Solar Electricity.
That’s a difference of almost $1,000 in only a few months and it is likely to get worse!
There is a number of theories, but at the end of the day, it comes down to the basic law of trade: “Supply & Demand”.
The more Solar electricity that’s installed = the more STCs that are created.
The more STCs that are created (supply), the less the demand.
In March 2017, The Clean Energy Regulator (CER) predicted the 2017 submissions to buy STCs would be $12.5m. In 2016 it was equivalent to just under $17m. This means that there are $5m fewer STC submissions required in 2017 to meet the 2020 Renewable Energy Target. This has put the clearinghouse into surplus and it gets worse. Due to the massive growth in businesses installing Solar, this has resulted in a drop in prices across the STC market and there is likely to be further reductions.
“The STC of 7.01% equates to an annual target of 12.5 million STCs which electricity suppliers need to surrender to the Regulator.” Ric Brazzale, Green Energy Trading.
So in real terms when buying Solar, that’s a total of $5m less STC’s that Solar Retailers have available to discount your Solar Panels.
STC Clearing House Status as at 10/7/2017
Current Status: In Surplus
Number of STCs: 263,235
STC price vs Quantity of STCs created
The green line in the graph above shows the price dropped to $17 per STC in 2011. Now only midway through, the 2017 STC creation is predicted to be bigger than in 2011. As they say, “something has got to give”.
What do the experts say?
The article below was sourced from the Renew Economy website expecting the price of STCs to drop to $38.00. Not only was this prediction met, but as of July 2017, the current price is $26.00 and it is expected to drop further.
“Given the low level of the 2017 target relative to creation levels the market is expecting that the Clearing House (with its guaranteed $40 per STC) will be used a lot less extensively in 2017 with forwarding STC prices for delivery later in 2017 having traded under $38.00.”
Ric Brazzale, Green Energy Trading.
The bottom line…
What does this mean for home and business owners? Well, for homes we are looking at around $1,200 extra added to the price of a current 6.6kW Solar PV and for business as much as $7,500 for a 40 kW Solar PV system extra!
There has never been a better time to buy Solar!
Businesses can expect less than 3 years of payback… sometimes less than 2 years.
That’s a 50% Return on your Investment!
Don’t take our word for it, ask your accountant or financial advisor for a better way to invest. We bet you won’t find many.
Do your research and check the online reviews of Solar Retailers. Solar should always be a long-lasting, long term investment and quality always pays. Still unsure? Visit the Clean Energy Council website and always choose a “Clean Energy Council Approved Solar Retailer”. Clean NRG Solar offers and stands by a “20-year system design life”.