STCs vs. LGCs Melbourne businesses increasingly turn to solar energy, understanding the available incentives is crucial for maximizing returns on investment. Two primary incentives in Australia are Small-scale Technology Certificates (STCs) and Large-scale Generation Certificates (LGCs). Grasping the distinctions between them can help your business make informed decisions when adopting solar power.
Small-scale Technology Certificates (STCs)
STCs are designed for smaller renewable energy systems, typically under 100 kW. When a business installs an eligible solar system, STCs are issued upfront based on the system’s expected energy production until 2030, the scheme’s end date. Each STC represents one megawatt-hour (MWh) of electricity. These certificates can be sold or traded, effectively reducing the initial cost of the solar installation. It’s common practice for solar providers to offer an upfront discount in exchange for the STCs, simplifying the process for businesses.
Large-scale Generation Certificates (LGCs)
LGCs apply to larger renewable energy systems exceeding 100 kW. Unlike STCs, LGCs are generated progressively, with one LGC created for every MWh of actual electricity produced by the system. To participate, a business must register its system as an accredited power station with the Clean Energy Regulator. Once accredited, LGCs can be created and sold on the open market, providing an ongoing revenue stream rather than an upfront discount.
Key Differences Between STCs vs. LGCs
- System Size: STCs are for systems under 100 kW, while LGCs are for systems over 100 kW.
- Certificate Issuance: STCs are issued upfront based on estimated production, providing an immediate reduction in installation costs. In contrast, LGCs are generated over time, reflecting actual energy production, and offer a continuous income source.
- Market Dynamics: Both STCs vs. LGCs are tradable commodities, with their values fluctuating based on market supply and demand. Staying informed about current certificate prices can help businesses optimize financial benefits.
Implications for Melbourne Businesses
For businesses in Melbourne, choosing between STCs vs. LGCs depends on factors like energy needs, available installation space, and financial goals. Smaller enterprises might find STCs more straightforward, benefiting from immediate cost reductions. Larger organizations with higher energy consumption may prefer LGCs for the potential of ongoing revenue.
Take Action with Sun Quotes
Navigating the complexities of solar incentives can be challenging. At Sun Quotes, we simplify the process by connecting you with nearby retailers who can provide tailored solutions for your business. Raise a quote request today and receive three free quotes from reputable solar providers in Melbourne. Empower your business with solar energy and make the most of available incentives.
