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What are Small-scale Technology Certificates (STCs)?

The Small-scale Renewable Energy Scheme encourages investment in small-scale renewable energy, and creates a financial incentive for individuals and small businesses to install systems which produce electricity. Small-scale renewable energy is determined to be any system under 100kW in size, and these systems generate RECs known as Small-scale Technology Certificates, or STCs.

STCs are government incentives that help to reduce the upfront cost of installing your energy solution, and apply to systems that are below 100kW in size. In other words, all residential size systems and some commercial size systems. The number and value of STCs your solution receives differs depending on its size and location in Australia. To be eligible for STCs, your solar solution needs to be installed by a Clean Energy Council accredited installer, and ZEN only uses Clean Energy Council accredited installers.

Owners of eligible systems are entitled to keep their STCs after an installation and sell them on their own terms at a later date, to recoup some of the system cost. However in nearly all circumstances, owners prefer to receive an upfront discount on the total cost of their system by selling their STCs direct to ZEN Energy. This approach minimises the time and effort of having to trade certificates themselves, and allows the customer to lock in a known rebate and and a known final price on their solution without risk of market fluctuations.

How do STCs affect my invoice amount as a residential customer?

By allowing ZEN Energy to purchase your STCs from you at the point of sale, you can effectively reduce your total system cost and ensure you receive the value of your STCs as a point of sale discount.

Assuming you are not registered for GST, the purchase of your eligible STCs by ZEN Energy are not subject to GST and ZEN Energy will simply provide you with a net invoice. This means that the total price you pay will only be your system cost less the value of your certificates. More specifically, under the ATO Legislation:

  • ZEN Energy are required to calculate GST on the full system price.
  • ZEN Energy will reduce the value after GST to arrive at a net customer price including GST.

What are my STC obligations as a residential customer?

To ensure you receive the benefit of your STCs as a point of sale discount, ZEN simply requires you to do the following with the PV System Assignment Form that will be provided to you:

  • Sign the Owner Declaration Section
  • Tick the GST Declaration – for Personal
  • Complete the Owners section of the Installer Declaration
  • Provide the completed form back to ZEN Energy

How do STCs affect my invoice amount as a business?

By allowing ZEN Energy to purchase your STCs from you at the point of sale, you can effectively reduce your total system cost and ensure you receive the value of your STCs as a point of sale discount.

As a business registered or required to be registered for GST, the assignment of the STCs is a supply under Section 9-10 of A New Tax System (Goods and Services Tax) Act 1999. The supply is then also classed as a taxable supply under Section 9-5 of the Act, and so a Tax Invoice is required to record the transaction. Specifically, under the ATO Legislation;

  • ZEN is required to calculate GST on the full system price, and raise an appropriate invoice.
  • ZEN will issue a Purchase Order to buy the STCs from your business
  • As a business customer you are then required to invoice ZEN Energy for the STCs, including GST
  • ZEN will offset our liability for the purchase of the STCs against our Receivable Invoice, as a payment against that invoice.

What are my STC obligations as a business customer?

To ensure you receive the benefit of your STCs as an upfront discount, ZEN simply requires you to do the following on the PV System Assignment Form that will be provided to you:

  • Sign the Owner Declaration Section
  • Tick the GST Declaration – for Business
  • Complete the Owners section of the Installer Declaration
  • Provide the completed form back to ZEN Energy
  • Raise an invoice for the purchase of the STCs by ZEN Energy, including GST, and provide the invoice to us.

What are Large-scale Generation Certificates (LGCs)?

The Large-scale Renewable Energy Target encourages investment in renewable power stations to achieve 33,000 gigawatt hours of additional renewable electricity generation by 2020. Renewable power stations are determined to be any system above 100kW in size, and these systems generate RECs known as Large-scale Generation Certificates, or LGCs. LGCs are therefore available for solar energy systems that are above 100kW in size.

In a similar way to STCs, LGCs are a government incentive for installing solar energy systems. However the way in which the incentive is applied is different to STCs. The main differences are that they cannot be deemed upfront like STCs can, and that the system owner must register with the Clean Energy Regulator as an Accredited Power Station.

Once they are created and validated, LGCs act as a form of currency and can be sold and transferred to other individuals and businesses at a negotiated price. LGCs are usually sold to electricity retailers, who are required to surrender a set number of certificates to the Clean Energy Regulator each year. The number of LGCs issued to an individual or business is determined by the amount of renewable electricity generated or displaced by an eligible system. As a guide, one LGC is equal to one megawatt hour of eligible renewable electricity.

As LGCs cannot be deemed upfront, ZEN Energy cannot provide an upfront discount on these systems like smaller STC systems. However, ZEN Energy can and does assist in all the steps required for a system owner to register as an Accredited Power Station, create and trade LGCs from their system, and receive a financial benefit from them on an ongoing basis.

What are my LGC obligations as a business customer?

  • Ensure that your system is registered with the Clean Energy Regulator as an Accredited Power Station.
  • Ensure that National Electricity Market (NEM) standard metering is used in determining the amount of electricity generated, ideally in half hour Intervals.
  • Ensure that relevant data and returns are completed by the 14th of February each year, for Electrical Generation up to the 31st of December for the prior year.

How can ZEN Energy help with my LGC obligations?

  • ZEN can assist in the registration of your system as an Accredited Power Station with the Clean Energy Regulator (CER)
  • ZEN can assist in the process to generate LGCs from your system, including the provision of NEM standard metering, aggregating the relevant solar production data, and surrendering the necessary data to the CER
  • ZEN can assist in brokering a trade to converting your LGCs to cash
  • ZEN can assist in completing the required Electricity Generation Returns, required by the 14th of February each year, for Electrical Generation up to the 31st of December for the prior year.

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