WHAT ARE
STCs AND LGCs ?

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Written By: GEE Energy    26 April, 2022

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Solar for Businesses in Australia

Australian businesses can significantly benefit from installing commercial solar as it offers great return on investment, can upgrade corporate image, reduce operational expenditure, and also help save on overall energy costs.

We understand that you, as a business owner may feel sceptical of investing in solar, especially considering costs despite it being an excellent long-term investment. We are here to tell you that you can avail various federal government solar incentives that can help reduce capital expenditure and make getting solar for your business that much easier.

Government Grants for Solar Power Installation

The Australian Government solar incentives in the form of Small-scale Technology Certificates (STCs) were introduced for system sizes up to 100kW. For large commercial solar system over 100kW, the government introduced Large-scale Generation Certificates (LGCs).

Let us further explore these federal government rebates for solar power to find out how these can benefit businesses in the long run.

What are STCs and how are these generated?

Introduced in 2001 under the Renewable Energy Target (RET), Small-scale Technology Certificates (STCs) are a type of federal government incentive that reduce the upfront cost of a solar PV installation by around 30-35% for system sizes up to 100kW.

Number Of STCs

The number of STCs businesses are issued or generated depend on the amount of power / electricity generated by the installed commercial solar system. 1 STC is equivalent to one megawatt hour of electricity generated.

Price Of STCs

The price of STCs change according to market conditions. These certificates can be traded by a licensed trader and are commonly assigned to your solar retailer as part of your purchase agreement.

Phasing Out

Total benefit from the small-scale renewable energy scheme reduces on the 1st of January each year until it is phased out at the end of 2030.

CEC-approved solar retailers like GEE Energy deduct the STC incentive from the overall price, so business owners only have to pay the net amount for their commercial solar system.

What are LGCs and how are these generated?

Businesses interested in large commercial solar systems over 100kW capacity can benefit from the Large-Scale Renewable Energy Target and Large-scale Generation Certificates (LGCs). In simple terms, an LGC allows businesses to buy and sell renewable energy via large scale solar power systems.

How to qualify

To qualify for LGCs, the applicants have to register as a ‘power station’ that is accredited with the CER, or Clean Energy Regulator.

Number of LGCs

According to the CER, “One LGC can be created per megawatt hour (MWh) of eligible electricity generated by a power station”. In this case, the amount of generated electricity by the ‘power station’ is calculated based on a pre-determined formula that has been specified by the Clean Energy Regulator.

Certification

The entire certification is a five-step process that involves:

  • Information review prior to submitting LGC claim
  • Reviewing and adding generation data of power station
  • Creation of LGCs under the REC registry
  • Assessment and validation of LGCs by the Clean Energy Regulator
  • Registering for LGCs via LGC creation fee payment

Price of LGCs

Large-scale generation certificates can be sold at pre-determined market price to other businesses or individuals according to the respective agreement between involved parties.

Things to Consider

The small-scale technology certificate and large-scale generation certificate federal government initiatives for solar power make it easier for businesses to install solar systems and also avail benefits of being a renewable-powered company.

Since our purpose is to help you make an informed decision, here are certain things that business owners should consider, like knowing when the government solar rebate ends.

STCs and LGCs being phased out

The scheme for generating STCs and LGCs is expected to be phased out within the next eight years.

  • According to the Clean Energy Regulator, STCs ‘must be created within 12 months of the system being installed to be valid’.
  • Moreover, the regulatory body announced that the deeming period for systems installed in 2022 will continue to decline further with each successive year till the scheme phases out at the end of 2030.

Limited number of certificates

The number of certificates that can be created for an eligible solar system will reduce over the next couple of years.

  • This means most businesses will not get a chance to avail this benefit later.
  • Therefore, if you are planning to upgrade your business with solar power, there is no time like the present to avail these government grants for solar power installation.

Eligibility

Business owners are required to check their eligibility for applying and receiving STCs and LGCs on behalf of their business.

  • In both cases, it is important to be aware about the type of solar system and size that is best suited for your commercial establishment and the kind of financial relaxations you can avail.
  • Solar retailers like GEE Energy can also assist you with determining your eligibility for the right certification according to your business energy requirements.

Conclusion

When it comes to installing commercial solar for business, it is important to be aware about all kinds of federal government solar incentives as well as the various benefits these offer as it can make Australian businesses future-ready and sustainable for years to come.

Avail these benefits while you can; get solar for your business today!

 

Gee Energy is committed to help clients in taking important and wise decisions about going solar. Let us be your partner in your solar journey.

For more information on how to get started, reach out through our website www.gee.com.au or call us on 1300 70 70 42.

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