Solar series: What are STCs anyway?

Small-scale Technology Certificates, or STCs for short, might sound complicated, but they’re basically your solar system’s golden ticket to instant savings.

When you install a solar panel, battery, or heat pump, you generate STCs. Each certificate is worth cash that goes straight toward reducing the upfront cost of your system.

Think of STCs as a kind of sunshine IOU from the government. The more certificates your system earns, the bigger your rebate, and the less you have to pay out of pocket. It’s the energy industry’s way of saying, “Thanks for helping us generate clean energy.”

How STCs work

Here’s the simple version. Each STC represents a certain amount of electricity your system is expected to generate over its lifetime. The total number of certificates you get depends on three things:

  1. The size of your system in kilowatts (kW)
  2. Where you live in Australia (because some states get more sun than others)
  3. The “deeming period,” which is basically how long the government expects your system to generate electricity

Once your STCs are calculated, they can be sold to your installer or directly to the market, and the cash from that sale becomes part of your upfront rebate. That’s why solar suddenly feels much more affordable.

The deeming period: your rebate’s secret timer

Now we get to the sneaky part: the deeming period. This is the number of years the government assumes your system will generate electricity when calculating STCs. Longer deeming periods mean more certificates, which means bigger rebates.

Here’s the catch: the deeming period gets shorter every year. That’s government policy in action. If you install a system this year, your STCs are calculated for a longer period than if you install next year. Shorter deeming periods mean fewer STCs, smaller rebates, and more money coming out of your wallet.

For example, let’s say a 6kW solar system installed in 2025 earns 40 STCs because of a 15-year deeming period. If you wait until 2026, the deeming period drops to 14 years, and the system only earns 37 STCs. If each STC is worth $40, that’s a rebate drop from $1,600 to $1,480 -a difference of $120 just because you waited a year.

Why shortening the deeming period reduces rebate value

It’s simple math. The government assumes your panels will generate energy for fewer years, so there are fewer certificates assigned. Fewer certificates mean a smaller rebate, which means higher upfront costs for you.

This also affects long-term savings. Fewer STCs might make your solar system feel less appealing financially, even though it will still save you money over its lifetime. But why leave money on the table if you can lock in a bigger rebate now?

The bigger picture: how STCs encourage solar uptake

STCs aren’t just a rebate - they’re an incentive for Aussies to install clean energy systems. By reducing the upfront cost, they make solar more accessible to homeowners and help increase renewable energy generation nationwide.

The system is designed to gradually decrease rebates over time, encouraging early adopters to install sooner rather than later. In other words, the government wants people to ride the wave of savings now, instead of procrastinating and paying more later.

What this means for your solar decision

If you’re thinking about installing solar panels, batteries, or heat pumps, understanding STCs and the deeming period is crucial. The longer you wait, the smaller your rebate, the higher your upfront cost, and the slower your payback period.

  • Early installation means:
  • Bigger upfront rebate
  • Lower initial outlay
  • Faster return on investment
  • More overall savings on electricity

It’s like booking a flight before the cheap seats sell out - the early bird genuinely catches the worm.

Don’t let your rebate shrink

STCs might sound complicated, but the takeaway is simple: the deeming period directly affects your rebate, and every year it shortens, your rebate gets smaller. Installing sooner locks in a bigger rebate and bigger savings.

If you want to make the most of STCs and maximise your solar savings, the team at Compare Energy can help you figure out the best system and timing for your home.

Give us a call on 1300 790 106 and find out how much you could save by acting now. Don’t wait until your rebate shrinks.