It was not a crash. It was a small slide that mattered because the market had been glued to the ceiling for so long. Searchers ask “STC price drop 2024, why” and “why did STC prices fall in early 2024”, and the answer is the same.
What actually happened
For nearly two years before late 2023 STCs had traded at or close to the $40 effective ceiling. From November 2023 to February 2024, spot eased by almost 80 cents, to about $39.30. It stayed there until late February, then lifted to end the quarter at roughly $39.80. In dollar terms that is small. In market terms it was the first sustained slip in a long time.
Why it slipped
More certificates were created. Reports at the time pointed to growth in certificate creation across the board, with heat pump hot water a standout. State schemes in New South Wales, including the Energy Savings Scheme and Peak Demand Reduction Scheme, were pushing heat pump installs, and those installs also create STCs. See heat pump hot water STCs.
Clearing House deficit and surplus swings. After the first-quarter compliance surrender, the Clearing House held a deficit, but market participants watch how many certificates sit unsold, because a growing pool signals oversupply.
Calendar effect. Each January the deeming period shortens, which cuts certificates per system, but installers also rush work before the change, creating a bubble of supply around year end.
Why it mattered to installers
When spot moves a few tens of cents, your quoted STC discount moves with it. On a system creating 100 or more certificates, 80 cents is real money, and traders that pass spot straight through felt the move. A locked rate removed that exposure, see rate lock versus spot.
What this means for you
Treat 2024 as a reminder that supply shocks are the main risk in a capped market, and that the current driver is batteries, not heat pumps, see oversupply and battery certificates. For history in context, read the STC price history by year, then check today’s rate on the pricing page. If you are comparing traders after a soft patch, how to pick an STC trader helps, and what an STC is worth gives the maths.