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Some homeowners see declining STC numbers and think the solar market is getting weaker. But STC decline does not mean solar is dying. It mainly means government subsidy support is gradually reducing.
What are STCs?
STC stands for Small-scale Technology Certificate. STCs are part of Australia’s Small-scale Renewable Energy Scheme. When an eligible solar system is installed, certificates can be created based on how much renewable electricity the system is expected to generate before the scheme ends.
Most system owners assign the right to sell STCs to an agent or installer in exchange for an upfront discount or delayed cash payment.
Why do STCs reduce each year?
STCs reduce because the deeming period reduces each year. The deeming period estimates how many years the system will generate renewable energy before the scheme ends in 2030.
The Clean Energy Regulator states that the deeming period decreases by one year each year until 2030, reducing the number of certificates that can be created.
Example deeming period
- 2025: 6 years
- 2026: 5 years
- 2027: 4 years
- 2028: 3 years
- 2029: 2 years
- 2030: 1 year
This means installing later may reduce the number of STCs available. As a result, the upfront solar discount may become smaller over time.
Does this mean the solar market is dying?
No. A decline in STCs mainly means subsidy support is reducing. The market is also becoming more mature. Many suitable homes have already installed solar, while remaining households may include more renters, apartments, or homes with difficult roofs.
Why batteries are becoming more important
As feed-in tariffs become less attractive, households are focusing more on self-consumption. Instead of exporting excess electricity at a low rate, many homeowners are considering battery storage to use more solar power themselves.
This is why the market is shifting from solar panels only to solar panels plus battery storage.
Final thoughts
STC decline should not be understood as the end of solar. It is better understood as a subsidy countdown. For homeowners, this means installing solar earlier may provide stronger upfront support, while future value may increasingly come from battery storage and smarter energy use.