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What is the Deeming Period Decline, why Solar Panels should be installed Now?

Post By: Amrut Solar

APRIL 13, 2021

The small scale certificates are generated till 2030 as the Renewable Energy Act mentions 31st December, 2030 as the last date for generation and validation of STCSs. This time period is called deeming period. Time period for which the STCs are deemed.

The Renewable Energy Act (2000)

To understand the deeming period decline, let's first understand the Renewable Energy Act (last amended 2018).

The objects of this Act are:

  • to encourage the additional generation of electricity from renewable sources; and
  • to reduce emissions of greenhouse gases in the electricity sector; and
  • to ensure that renewable energy sources are ecologically sustainable.

This is done through the issuing of certificates for the generation of electricity using eligible renewable energy sources and requiring certain purchasers (called liable entities) to surrender a specified number of certificates for the electricity that they acquire during a year. Where a liable entity does not have enough certificates to surrender, the liable entity will have to pay renewable energy shortfall charge.

In layman's terms, once you have solar (photovoltaic) panels installed, you give the electricity produced to the government, electricity that is extra and not being used by you. And the government in turn, pays you its value. And for these transactions, the small scale technology certificates are utilised as a medium.

Deeming Period Decline

The small scale certificates are generated till 2030 as the Renewable Energy Act mentions 31st December, 2030 as the last date for generation and validation of STCSs. This time period is called deeming period. Time period for which the STCs are deemed. 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 the industry and investors with certainty regarding the future of the scheme.

With every passing year the deeming period declines because we get closer to the year 2030. A solar PV unit currently(2021) 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 and so on for 2023-2030.

How to calculate how many STCs you are eligible for:

You can find out your STCs eligibility using the below given equation.

Solar system size (kW) x Postcode Zone Rating x Deeming Period (years) = Number of STCs (rounded down)

Under the Renewable Energy Target, small-scale technology certificates are calculated based on system location, installation date, and the amount of electricity generated over the course of its lifetime—referred to as the deeming period.

You can calculate your STC eligibility here.

Australia has the highest uptake of solar globally, with around 29% of homes with rooftop solar PV. As of 31 March 2021, about 2.77 million small-scale solar power systems have been installed across Australia (source: CER)

Why should Solar Panels be installed now?

As explained above, the deeming period decline means the decline in your STC eligibility. With each passing year, your eligibility for receiving the number of STCs decreases. The sooner you install the solar panels, the more time you'll have before the year 2030 which will get you more STCs. The more STCs you have, the better cost reduction you get with the system installation. Considering the fact that the solar power system is a significantly long term yet one-time investment, wouldn’t you want to have the system installed with the least amount possible? Not to forget, installing solar systems will mean an incredible positive contribution towards the environmental causes.

At Amrut Solar, we provide both residential and commercial services along with solar battery storage. Contact us right away, before it's late!

0447 347 241