Sept 29, 2017: Home Solar and Double-dipping on Carbon Emissions

I’ll be in Montana for another month and we’re making some good progress on Sam’s house. This week we’ve started painting the outside with some warm colours that should help make it feel cozy through a long Montana winter.

This is how Sam's house looked yesterday

This is how Sam’s house looked yesterday

In a couple of weeks we’ll be heading back out to Sam’s family ranch in Eastern Montana to help with bringing the cattle down from the Custer National Forest and shipping the calves. I’m looking forward to lots of riding and beautiful fall weather. Montana can be truly spectacular at this time of year.

While I’m over here I’m also trying to stay in touch with what’s happening in Australia. A few days ago I read this Energy Matters article about how the recent drop in the price of STC’s (Small-scale Technology Credits) might lead to higher prices for home solar systems. STC’s are the ‘rebate’ your installer gets when they install a solar system on your roof which effectively reduces the cost of the solar system for you. According to the article, there was so much rooftop solar installed in the first half of 2017 it caused an oversupply of STC’s which, in turn, led to a 25% drop in the price of STC. This means that your installer gets less of a ‘rebate’ and will, most likely, have to pass on the extra cost to you, the homeowner. While this is probably not welcome news, there is a bigger issue with STC’s that I think we should all be aware of.

STC’s Are Sold to Polluters to ‘Offset’ Their Emissions

Under Australia’s ‘Renewable Energy Target’ there are two schemes for reducing greenhouse gas emissions. One is called the Large-scale Renewable Energy Target and the other is the Small-scale Renewable Energy Scheme.

Under the Renewable Energy Target a variety of individuals, businesses and industry groups interact with the schemes, including:

  • individuals and business who voluntarily invest in small-scale and large-scale renewable energy systems, generate renewable energy, or actively lower their consumption of main grid electricity, and
  • industry groups who are required by law to surrender large-scale generation certificates and small-scale technology certificates to offset the generation of emissions intensive energy, and meet scheme compliance obligations.

The key point to note here is the last sentence, industry groups (i.e. big polluters) are required by law to surrender both LGC’s and STC’s to offset the generation of emissions intensive energy. This means that if you as a homeowner installing a small solar system, sell the STC’s (or give them to your installer in return for a cheaper price which is usually the case) you are basically selling the emissions reductions that your system creates.

So, if you are installing solar for environmental reasons, the responsible thing to do is to pay the extra cost for your solar system, keep the STC’s and surrender them to the Clean Energy Regulator. Otherwise you cannot claim to be reducing your carbon footprint. This would be double-dipping because, if you gave away your STC’s, someone big polluter somewhere will be using them to claim a greenhouse gas emission reduction.

And let me be the first to say that I am guilty of this myself because I didn’t fully understand the system. When we installed the solar system on the Greeny Flat, we allowed the installer to keep the STC’s which he no doubt sold to some big polluter. Until recently it didn’t occur to me that I was giving away any claim to the emissions reductions.

If you’re reasons for installing solar are purely financial or you’re just wanting more independence from the electricity retailers then, by all means, use the STC’s to reduce the cost of your system. But if your motivation is primarily environmental then I suggest you give serious thought to how you deal with the STC issue.

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