STC prices – information for owners

If you intend to install a small-scale system the financial benefit supplied to you by an agent, or the total price given to you by a certificate broker/trader, can vary from day to day.  This is because STCs are traded in the STC market (like the stock market) and so prices vary depending on supply and demand and a number of other factors.

The only time the STC price is fixed is if it is to be traded through the ORER-managed STC Clearing House.  Prices of STCs are fixed at $40 (excluding GST), regardless of what the STC market is doing.

In the past decade, when the renewable energy certificates (RECs) were traded via a market, the spot price of a REC has varied between AUD$15 and AUD$60. This information is based on data provided to ORER by certificate brokers.  Brokers monitor the price of certificates and their information can be found on the web.

Outside of the STC Clearing House, the Office of the Renewable Energy Regulator (ORER) does not set the price of STCs nor does it get involved in disputes between buyers and sellers. Payment for STCs or the rights to create STCs is a contractual matter between the buyer and seller, unless the STC has been sold within the STC Clearing House.

Solar credits

Solar Credits is a mechanism which increases the number of STCs able to be created for eligible installations of small generation units (small-scale solar panel wind or hydro systems) through the use of a multiplier. Solar Credits are not means tested and applies to the first 1.5 kilowatts (kW) of on-grid capacity installed in an eligible premises OR to the first 20kW of capacity for off-grid systems.

Generation from capacity above 1.5 kW (on-grid) or 20kW (off-grid), either on the original unit or on any additional capacity installed at a later date, will still be eligible for the standard 1:1 rate of STC creation.

Visit – Solar Credits at http://www.orer.gov.au/sgu/solarcredits.html

STC Clearing House

The STC Clearing House facilitates the exchange of STCs between buyers and sellers at the fixed price of $40 (excl.GST) and is accessible via the REC Registry. The STC Clearing House can only be utilised when the creator of the STCs has fulfilled certain compliance and process requirements under the Renewable Energy Electricity Act 2000 (the Act), and the STCs are validated by ORER. This could include determining system eligibility, installing the system, completing compliance paperwork and creating STCs in the REC Registry.

The STC Clearing House works on a Surplus/Deficit system. Those wishing to sell their STCs place an order to sell into the STC Clearing House. If there are no buyers wanting to purchase at that time, the STC Clearing House is said to be in ‘Surplus’ (there is a surplus of STCs for sale). The seller in a Surplus market is added to the end of the STC Clearing House Transfer List to be dealt with on a first-in-first-served basis as buyers enter the market. When a buyer places a purchase order, the number of STCs to be purchased will be filled from the top of the list down. If there are more Buyers than sellers, the STC Clearing House is said to be in ‘Deficit’.

Visit – STC Clearing House at http://www.orer.gov.au/clearinghouse/index.html

Please note:

• There is no per-STC fee to sell STCs through the STC Clearing House.
• You can only use the STC Clearing House for STCs created for eligible SWH/SGU systems installed after 1 January 2011.
• The status of the STC Clearing House Transfer List will be publicly available and updated on an hourly basis.
• If liable entities meet their surrender liabilities and there are still STCs on the STC Clearing House Transfer List they will remain on the transfer list till a buyer buys the STCs which could be in the next quarter.
• ORER cannot provide an estimate of the likely waiting time to sell STCs on the Transfer List.  The STC Clearing House Transfer List will not necessarily clear at the end of each quarter.
• As an STC buyer or seller you must undergo a Proof of Identity Verification and ensure you have the correct REC Registry account in order to view and use the STC Clearing House.

Large-scale Renewable Energy Target (LRET)

• The LRET creates a financial incentive for large-scale renewable power stations such as wind, solar and hydro-electric by providing a mechanism for the creation of large-scale generation certificates (LGCs) by these power stations according to how much renewable energy electricity they produce.

• The LRET also places a legal liability on liable entities (typically electricity retailers) to purchase an amount of large-scale generation certificates (LGCs) from these power stations to meet an annual target.

• LGCs are negotiated and paid for outside the REC Registry and transferred within the REC Registry. The market price is dependent on supply and demand and can fluctuate daily.
• The amount of certificates liable entities need to purchase is set by the Renewable Power Percentage (RPP).

• Annual LRET targets have been adjusted as the number of RECs exceeded 34.5 million (34,500 GWh) by approximately 8.1 million RECs (8,100 GWh) at the end of the 2010 calendar year.