The STC scheme is the mechanism behind the “solar rebate” that residential customers ask about. It is not a direct government payment — it is a tradeable certificate scheme where the value is set by market demand. Understanding how it works, and how to explain it to customers, is core commercial knowledge for Australian solar installers. See Solar Energy in Australia for more.
How STCs Are Created
STCs are created under the Small-scale Renewable Energy Scheme (SRES), one of two streams of Australia’s Renewable Energy Target. The scheme works as follows:
- An eligible solar system is installed by a CEC-accredited installer using approved components
- The system owner (or their assigned agent) registers the installation in the REC Registry
- The registration generates a defined number of STCs in the owner’s registry account
- Those STCs are then sold on the market — either to an agent (the installer) or directly through the government clearing house
Commercial reality: Almost all residential customers assign their STCs to the installer at the time of purchase, in exchange for an upfront discount equivalent to the expected STC value. The installer carries the risk that the STC market price may move between when they discount the system and when they sell the certificates.
STC Zones: The Zone Rating
Australia is divided into four STC zones based on solar irradiance. The zone determines the multiplier used in the STC calculation:
| Zone | Coverage | Zone Rating |
|---|---|---|
| Zone 1 | Darwin (NT), parts of far north QLD | 1.622 |
| Zone 2 | Most of QLD, most of SA, most of WA (inland), parts of NSW | 1.536 |
| Zone 3 | Coastal NSW, ACT, VIC, coastal SA, Perth metropolitan area | 1.382 |
| Zone 4 | Tasmania, southern VIC | 1.185 |
The zone rating reflects the average peak sun hours for each location — higher irradiance zones generate more energy per kW installed, and therefore receive more STCs per kW.
Postcode lookup: The Clean Energy Regulator’s postcode tool gives the zone rating for any Australian postcode. Use this for every system to ensure the correct zone is used in the STC calculation.
The Deeming Period: Years Until 2030
The deeming period is the core variable that reduces the STC value each year:
| Installation Year | Approximate Deeming Period | STCs for 6.6 kW, Zone 3 |
|---|---|---|
| 2026 | 4 years | |
| 2027 | 3 years | |
| 2028 | 2 years | |
| 2029 | 1 year | |
| 2030 (before July 1) | 0.5 years |
The reducing deeming period means the scheme provides progressively less incentive as 2030 approaches. Systems installed in 2026 receive 4× the STC value of the same system installed in 2029. This is a genuine sales tool — customers who delay installation lose STC value each year.
Calculating STCs: The Formula
STCs = System capacity (kW) × Zone rating × Deeming period (years)
The deeming period is calculated as the number of complete years from the installation quarter to December 31, 2030. The Clean Energy Regulator’s official calculator applies the correct rounding.
Worked examples:
| Scenario | System Size | Zone | Zone Rating | Deeming Period | STCs |
|---|---|---|---|---|---|
| Sydney home, 2026 | 6.6 kW | Zone 3 | 1.382 | 4 years | 36 STCs |
| Brisbane home, 2026 | 10 kW | Zone 2 | 1.536 | 4 years | 61 STCs |
| Darwin home, 2026 | 6.6 kW | Zone 1 | 1.622 | 4 years | 43 STCs |
| Melbourne home, 2026 | 6.6 kW | Zone 3 | 1.382 | 4 years | 36 STCs |
| Hobart home, 2026 | 6.6 kW | Zone 4 | 1.185 | 4 years | 31 STCs |
STC Price and Value to the Customer
The STC price fluctuates based on market demand and supply. Key reference points:
Clearing house: The government’s STC clearing house buys STCs at $40/STC — a guaranteed floor price. However, clearing house purchases can take months to process, so most agents sell on the broker market.
Broker market: STCs typically trade at a small discount to the clearing house price — approximately $35–39 in 2026, depending on market conditions. Installers who take on STC assignment risk typically sell at broker market price.
Value to the residential customer: The upfront discount on a 6.6 kW system in Sydney (36 STCs × $38) = approximately $1,368. On a 10 kW Brisbane system (61 STCs × $38) = approximately $2,318. These are meaningful discounts that make solar more accessible.
The STC “Rebate” Is Not a Government Payment
Customers often refer to the STC value as a “solar rebate” — this is common shorthand but technically inaccurate. The government does not pay the customer directly. The value comes from the STC market, and it reaches the customer as an upfront discount from the installer. Explaining this accurately helps set customer expectations and avoids confusion when STC prices change.
Assigning STCs to an Agent
The standard residential process:
- Customer agrees to assign STCs to the installer/agent at the point of sale
- Both parties sign an assignment form (agent details, system details, STC count)
- System is installed and commissioned by a CEC-accredited installer
- Agent registers the system in the REC Registry within 12 months of commissioning
- Registry generates the STCs in the agent’s account
- Agent sells STCs on the broker market or through the clearing house
- The customer received their “payment” as an upfront discount at purchase — the agent retains the STC proceeds
Timing risk: The STC price between when the installer discounts the system (sale date) and when they sell the STCs (post-registration) can move. Installers who carry large STC positions are exposed to price movement risk. Some use STC brokers to pre-sell or hedge their positions.
STCs vs LGCs: The 100 kW Threshold
| Feature | STCs | LGCs |
|---|---|---|
| System size | Under 100 kW | 100 kW and above |
| Certificate creation | Upfront for entire deeming period | Annually based on actual generation |
| Incentive type | One-time upfront discount | Ongoing annual revenue |
| Market | STC spot market / clearing house | LGC spot market and PPAs |
| Scheme end | December 31, 2030 | Large-scale RET ongoing (no fixed end) |
| Who creates | System owner / agent | System owner / agent |
For commercial systems approaching 100 kW, the choice of system size has financial implications. A 99 kW system creates STCs; a 101 kW system creates LGCs instead. The financial comparison depends on the current STC deeming period vs expected LGC price trajectory.
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Frequently Asked Questions
What are STCs?
Small-scale Technology Certificates — tradeable certificates created under the federal government’s small-scale renewable energy scheme for solar systems under 100 kW.
How many STCs does a solar system create?
System capacity (kW) × zone rating × deeming period (years to 2030). A 6.6 kW system in Sydney in 2026 creates approximately 36 STCs.
What is the STC price?
The STC price fluctuates. The government’s clearing house guarantees $40/STC (slow settlement). The broker market trades at approximately $35–39 in 2026.
What is the deeming period?
The years remaining in the scheme from the installation date to December 31, 2030. In 2026 it is 4 years; it reduces by 1 each January 1. The STC value reduces each year as the deeming period shortens.
How does the STC discount work?
The customer assigns their STCs to the installer at the point of sale. The installer discounts the system price by the equivalent value and later sells the STCs on the market to recover that discount.
