Why You Need to Buy Your Commercial Solar PV System Now
If you’re considering investing in a commercial solar PV system to reduce electricity costs and improve your organisations sustainability, there’s never been a better time to buy.
To find out why buying and installing your system as soon as possible will increase your savings, read on.
About STCs
Small-Scale Technology Certificates or STCs are government incentives that provide discounts off the upfront cost of renewable energy systems up to 100kW in size.
When you purchase a solar PV system you receive 1 STC for every Megawatt-hour of energy your system is expected to produce until 2031.
For example, a 100kW system (approx 300-400 panels) will produce around 1,934MWh worth of electricity until 2031, meaning your business would currently receive 1,934 STCs.
Once your business’s STCs have been authorized, they act as a form of currency that can be sold to recover a portion of the cost of purchasing the system.
Because the process can be complex and time consuming, it’s common practice to allocate the STCs to the system provider in exchange for a discount on the purchase price.
STC Phase Out
Due to changes made by the Federal Government, these STC values or government incentives are set to reduce by 1/15 (around 6-7%) in January each year until 2031, when they will be stopped completely.
This means the sooner you invest in a solar power system, the more STCs you’ll receive.
For example:
If you install a 100kW solar PV system for your business before the end of 2017, you’ll receive around 1,934 STCs
If you install a 100kW solar PV system in 2018, you’ll receive 137 fewer STCs.
The number of STCs your system will receive is dependent on the install date, rather than the purchase date. Due to the time it takes to secure approvals for a 100kW system, this means you would need to purchase your system now in order to beat the January 1 deadline
There is also no guarantee that STCs will even last until 2031, with the Federal Government having the ability to axe the incentives at any point in time. (Please note this phase out will also affect residential STCs.)
STC Price Drop
Because the value of STCs fluctuates depending on market demand, their pricing can quickly change.
In 2016, STC values remained relatively stable with STCs trading at around $38 each. However, due to the Clean Energy Regulator reducing their 2017 Small-scale Renewable Energy Scheme target to 7.01%, down from 9.68%, electricity providers are required to purchase less STCs compared to last year.
Because solar installations are only increasing however, an excess of STCs has caused their value to drop down to $29 at the time of writing.
This means while a few months ago you would have received a $73,500 discount off a 100kW system, you may now only receive a $56,100 discount.
Unfortunately, the value of STCs is predicted to only fall further, meaning the longer you delay in installing a system, the less of a discount you’ll receive.
Now's the Time to Act
To secure the current amount of STCs you’re eligible to receive, and the amount you’ll receive for them, you’ll need to purchase and install your solar system as soon as possible, or at least before January 1, 2018.
To find out which system size best suits your business’s energy needs and how much going solar could reduce your electricity bills by, request a no obligation callback from one of our expert Energy Consultants today.
