When you receive a quote for a solar system in Australia, the installer will tell you the price "after the government rebate." What they are referring to is the Small-scale Technology Certificate (STC) scheme, which is part of Australia's Renewable Energy Target legislation and is administered by the Clean Energy Regulator (CER). Understanding how it works helps you verify that you are receiving the correct discount, assess how much urgency there is to act before the rebate falls further, and know what to expect when comparing quotes from different installers.
What is an STC?
A Small-scale Technology Certificate is a tradeable environmental certificate. Each STC represents one megawatt-hour (MWh) of electricity that a solar system is expected to generate — or displace — over a set period of time known as the deeming period. The government does not pay you directly. Instead, large energy businesses (electricity retailers and large industrial electricity users) are legally required to surrender a set number of STCs to the government each year as part of Australia's renewable energy obligations. This creates demand for STCs, and that demand gives them a market value.
When you install solar panels and assign the right to create STCs to your installer, they sell those certificates to the energy market and pass the proceeds back to you as a discount on your invoice. The transaction is seamless from the customer's perspective — you simply pay less than the pre-rebate installation price.
How the number of STCs is calculated
The formula for calculating STCs for a rooftop solar system involves four elements:
- System size (kW): The rated capacity of the solar panel array in kilowatts.
- Zone rating: Australia is divided into four solar irradiance zones (see below). Sunnier locations generate more electricity and therefore earn more certificates per kW of system capacity.
- Deeming period (years): The number of years of future generation the government pre-credits. It reduces by one year each January until the scheme closes in 2030.
- Deemed generation factor: A standardised figure published by the CER representing expected annual MWh output per kW of capacity for each location. This varies by zone and accounts for average irradiance.
The broad calculation is:
Number of STCs = System kW × Zone rating factor × Deeming period years
The CER publishes official STC calculators and zone maps. The exact formula uses deemed MWh output rather than rated capacity alone, but zone factor and deeming period are the two variables that most affect the outcome.
The four STC zones
Australia's STC zone map groups locations by average annual solar irradiance. Higher zones (closer to Zone 1) receive more solar radiation and generate more energy per kW of installed capacity. The zones affect both the number of STCs awarded and — for some legacy calculations — the deemed generation factor used.
| Zone | Solar resource | Approximate locations | Zone rating (approx. MWh per kW per year) |
|---|---|---|---|
| Zone 1 | Highest | North-western WA, north SA, parts of NT (Katherine, Alice Springs) | ~1.622 |
| Zone 2 | High | Darwin, north QLD, central WA, Townsville, Cairns | ~1.536 |
| Zone 3 | Moderate-high | Brisbane, Adelaide, Perth metro, Canberra, Sydney, much of regional NSW and QLD | ~1.382 |
| Zone 4 | Moderate | Melbourne, Hobart, south-east VIC, alpine areas | ~1.185 |
Zone ratings are indicative. Exact values depend on specific postcode; use the CER's STC calculator for a precise figure for your address.
Worked example: 6.6 kW system in Melbourne (Zone 4), 2026
Melbourne falls in Zone 4, the lowest solar irradiance zone. For a system installed in 2026, the deeming period is 5 years (2026 through to the scheme's end at 31 December 2030).
Using approximate values:
- System size: 6.6 kW
- Zone 4 rating: approximately 1.185 MWh per kW per year
- Deeming period: 5 years
- Deemed generation: 6.6 × 1.185 × 5 = approximately 39.1 MWh (and therefore approximately 39 STCs)
- STC value: approximately $40 per certificate (clearing house price, pre-GST)
- Gross STC value: 39 × $40 = approximately $1,560 (pre-GST; excludes admin)
After accounting for typical installer processing costs and the open-market price discount (most installers sell STCs at close to but slightly below the clearing house price), the effective rebate on this Melbourne 6.6 kW system in 2026 is typically in the range of $1,400–$1,600.
Compare this to the same system installed in Brisbane (Zone 3), where the zone rating is higher and the same five-year deeming period yields approximately 45 STCs worth around $1,800. The difference illustrates why Melbourne installers quote lower after-STC prices than Brisbane installers for the same system — not because of higher prices in Melbourne, but because fewer STCs are generated in a lower-irradiance location.
Note that in warmer, higher-irradiance states (e.g. a 6.6 kW system in Perth, Zone 3, or Darwin, Zone 2), STC numbers are higher, and the effective rebate is larger — partly offsetting the difference in system prices.
Why the STC rebate is falling each year
The scheme was designed to wind down gradually as solar technology matured and costs fell. The mechanism that produces this wind-down is the deeming period: each January, it reduces by one year.
| Installation year | Deeming period (years) | Approx. STCs (6.6 kW, Zone 3) | Approx. STC value (@ $40/STC) |
|---|---|---|---|
| 2024 | 7 | ~64 | ~$2,560 |
| 2025 | 6 | ~55 | ~$2,200 |
| 2026 | 5 | ~46 | ~$1,840 |
| 2027 | 4 | ~37 | ~$1,480 |
| 2028 | 3 | ~28 | ~$1,120 |
| 2029 | 2 | ~18 | ~$720 |
| 2030 (final year) | 1 | ~9 | ~$360 |
Figures are approximate. Exact STC numbers depend on system size, precise zone factor for your postcode, and the STC spot price at the time of installation. The clearing house price of $40/STC (pre-GST) is used for illustration.
The rebate is not disappearing overnight — but the trajectory is clear. A Brisbane household that installs in 2026 captures roughly $400 more in STC value than one that waits until 2027, and roughly $1,500 more than one that waits until 2030. The decision to install now versus later should still be driven primarily by your electricity usage and roof suitability, but the STC phase-out is a real financial factor at the margin.
STCs versus LGCs: what is the difference?
The Renewable Energy Target has two tiers. The Small-scale Renewable Energy Scheme (SRES) covers residential and small commercial systems under 100 kW — these earn STCs. The Large-scale Renewable Energy Target (LRET) covers large-scale generation facilities (wind farms, solar farms, hydro) — these earn Large-scale Generation Certificates (LGCs).
The key difference is how they are measured. STCs use a deemed generation estimate calculated at installation — the government effectively pre-pays for expected future generation. LGCs are created based on actual metered electricity output: one LGC per one MWh actually generated and recorded. This means LGC income is spread over the life of the project rather than front-loaded, and it varies with weather and system performance.
As a residential solar customer, STCs are almost certainly what you are dealing with. If you are a business considering a system above 100 kW, you would work within the LRET framework and may be eligible for LGCs instead.
What to check with your installer
When you receive a solar quote, verify the following to ensure the STC calculation is correct:
- Ask for the STC count and the per-certificate value used in the quote. Cross-check using the CER's online STC calculator.
- Confirm the installer is accredited under the Clean Energy Council (CEC) and registered to assign STCs. Unaccredited installers cannot legally create STCs on your behalf, and you would lose the rebate.
- Ask whether the quoted price is "before" or "after" STCs. All reputable quotes should be after STCs. If a quote is "before STCs" and is lower than a competitor's "after STCs" price, something is wrong.
- Check that the deeming period used is correct for the current calendar year. Quotes produced in late 2025 using a 2025 deeming period, but for installations occurring in 2026, should use the 2026 deeming period (one year shorter).
For state-specific rebates that sit on top of STCs — including VIC Solar Homes, NSW PDRS, WA Residential Battery Scheme — see our full guide to solar and battery rebates by state in 2026. To model your after-rebate payback period, use the solar payback calculator.
Sources
- Clean Energy Regulator (CER) — Small-scale Technology Certificates: scheme overview and STC calculator.
- CER / Jacobs — Small-scale Technology Certificate Projections, January 2026.
- Clean Energy Regulator — Battery rebates changing 1 May 2026 (Cheaper Home Batteries Program STC factor changes).
Last reviewed: — figures verified against Clean Energy Regulator STC scheme documentation and CER January 2026 projections report.