deeming - Expected changes in 2017
Please note that all installs completed in 2016 will still receive the full 15 years deeming, even if being claimed in 2017.
What is deeming?
Quite simply the deeming period is an estimate of the years the system will create renewable energy. The maximum deeming period is 15 years after which no further STCs can be created.
2017 will be the first year where by the STC deeming period is reduced.
Why has deeming been introduced?
The Clean Energy Regulator determined that deeming provides an efficient method for allocating a meaningful number of certificates to smaller sized systems without the administrative burden of metering each individual system's output. Setting an end-date ahead of time provides our industry and investors with certainty regarding the future of the scheme.
How does reduced deeming work for solar PV?
Under a reduced deeming approach, small-scale systems are only provided with certificates for generation up to 2030. A solar PV unit currently receives 15 years' worth of certificates upfront. Reduced deeming means that a solar PV unit installed in 2018 would only receive 13 years' worth of certificates – rewarding generation up to and including 2030, but not beyond.
Example of the phase-out of deeming years on small-scale technology certificates.
Source: Climate Change Authority, 2012.
The maximum deeming period has been 15 years which represents the full life of the system. As of 2017 however this will come down to 14 years with the scheme ending in 2030. Each year thereafter the figure will come down by one.
For postcode rating please use the following multiplier:
Zone 1 - 1.622
Zone 2 - 1.536
Zone 3 - 1.382
Zone 4 - 1.185
Size of system in KW x Postcode Zone Rating x number of deeming years left = Volume of STC
So in conclusion
We hope this information has cleared up any concerns and questions you have about the upcoming deeming period. While some companies have been using scare tactics to try and push sales by declaring ‘the end of STCs’ the truth is vastly different.
It will be many years before we see any significant impact on the total price for STCs drops and you can rest assured that claiming STCs will still remain a very enticing selling prospect for many years to come.
If you have any questions, please contact us.
The Green Energy Trading Team
