The Deeming Period for STCs will change at the end of this calendar year. Complete your system installs before the end of the year to avoid the reduction in certificate creation numbers.

*** Please note that all installs completed in 2021 will still receive the full 10 years deeming, even if being claimed in 2022 ***

WHAT IS AN STC AND HOW IS IT related to THE DEEMING PERIOD?

Solar PV systems are eligible to create small-scale technology certificates (STCs) under the Small-scale Renewable Energy (SRES) Scheme, with one STC equalling one megawatt hour of renewable electricity generated or displaced. The number of STCs a system is eligible for depends on the size of the system, location and install date. The install date is an important factor because the STCs are deemed up front i.e. the certificates that would be created from the install year to the end of the SRES Scheme in 2030 are all created up front at the time of the install.

What is deeming?

Quite simply the deeming period is an estimate of the years the system will create renewable energy. The current maximum deeming period is 10 years, because under the Small-scale Renewable Energy Scheme, small-scale technology certificates are legislated to be created until 2030.

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 10 years' worth of certificates upfront. Reduced deeming means that a solar PV unit installed in 2022 would only receive 9 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 in 2021 is 10 years, which represents the full life of the system. As of 2022 however this will come down to 9 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.

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 The Green Energy Trading Team