Incentive For Solar Power System Installations
The Federal Government’s Small-scale Renewable Energy Scheme has implemented a market driven approach to regulating the demand and supply of the whole energy sector through Small-Scale Technology Certificates (STCs). When you install an eligible system, you may claim a set number of these STCs.
What Are Small-Scale Technology Certificates?
Electricity companies that don’t supply energy from renewable sources have to buy a certain amount of STC’s. The price of the STC’s is variable as they are traded on a market driven basis. The more green energy that is produced, the more STC’s will be available and the lower the price will be. The less STC’s produced, the higher the price (and your credit) will be.
In our current situation we are facing a high demand of STC’s because a lot of energy is still produced from non-renewable energy sources such as fossil fuels. This will make it more beneficial for people to install a solar power system sooner as STC’s will lower in value as more energy is produced from green sources.
It is important to know that the bonus multiplier (for early takers) will be reducing by at least 33% on 1 July 2012. Having a solar system fitted is always going to pay itself off, but right now it is likely to be the most affordable option we will ever see for installing a solar system.
Calculating The Small-Scale Technology Certificates (STCs)
For those interested in the mathematical and financial side of your solar system follow this guide:
Solar system sizes are measured in kW (Kilowatts). 1 kW producing for 1 hour gives you 1 kWh (or 1 unit of electricity). In the Perth Metropolitan area, we utilise 5.6 hours of sunlight on average per day for our basic system estimates.
This means that for every 1kW of solar system you have, you will produce 5.6 kWh or units of electricity per day (1 x 5.6 = 5.6). With current electricity prices (using 25 cents per unit), this means you will save $1.40 per day, or $511 per year.
If your power bill is $1022 per year, this means a 2kW system will probably be the largest system you would want. With power bills of $1533 a year, you would want to go no bigger than 3kW.
The power savings alone should make solar power a no brainer, but the cost needs to be considered.
The fact is that Solar Power systems without incentives can start from $4500. Fortunately there are incentives available that bring these costs down to starting under $2000 (55% of costs covered) – this is achieved with solar credits. Solar credits are available for a limited time, they allow the first eligible solar power system on a home to receive a boosted number of Small-scale Technology Certificates or STC’s (Calculate STC Value). Currently, you can earn up to 3 times the STC’S from installing a solar power system, up to 1.5kW. Solar credits only apply to the first 1.5kW of a system, even if the system is larger.
So to give you an example:
Living in Perth, Australia (postcode 6000) – you have a Solar Radiance Factor of 1.38
Taking the Solar Radiance Factor of 1.38 and multiplying it by your system size, and then by 15, will give you your standard certificate eligibility. Why do we multiply by 15? The government allows you to claim 15 years’ worth of STC’s in advance.
EXAMPLE with a 1.5kW system: 1.38 x 1.5 x 15 = 31.05 (rounded down to 31) STC’s
The Solar credits bonus currently multiplies this by 3, so 3 x 31 = 93 STC’s. With a current market value of $30.00 per STC (as at 6/12/2011), you can receive a credit of $2,790 taken off the cost of your power system. From 1 July 2012, the multiplier will drop to 2, which means you will only receive a credit of $1,860.
Interested in more numbers? Want to start saving on your power bills? Give us a call and arrange an obligation free appointment with one of our consultants.
Disclaimer: Figures provided are of a general nature only. Accuracy cannot be guaranteed as your personal situation, house layout and other factors may impact on your individual results.