Clawback is the clause that matters most when something goes wrong, and the least read when you sign. In plain terms it says: if certificates you sold turn out to be invalid, the trader can take the payment back.
Why clawbacks exist
STCs are created from a claim the Clean Energy Regulator can review after the fact. If an audit finds missing photos, a non-approved product or an ineligible installation, certificates can be invalidated. The trader that bought them is left holding a loss, so most contracts push it back to the installer who created the claim. That is reasonable in principle. The question is how far the clause reaches.
Terms to check
- Trigger. Invalidation by the regulator only, or any trader decision that a claim was “defective”?
- Time limit. Open-ended clawback is a liability on your books for years. Look for a fixed window.
- Right to cure. Can you fix the issue, for example by supplying a missing photo, before the trader recovers anything?
- Proof. Must the trader show the loss with evidence from the registry?
- Method. Does it set off against future payments or demand a lump sum?
- Third-party fault. If a subcontractor or product supplier caused the problem, can you recover from them? Keep that paperwork.
Reducing the exposure
Use the photo requirements and the assignment form guide on every job, keep records for the period the regulator may review, and read how STC audits work. Our general explainer on STC clawback covers the regulator’s side.
What this means for installers
When comparing traders, put clawback next to rate and settlement time. A trader with a slightly higher rate but a wide clawback may cost you more than one that pays a little less and stands behind the claim once it has cleared. Compliance pre-checks are the practical answer: at Energy Merchants the desk reviews photos, forms and serials before lodgement, so problems are caught early. Read what to check in an STC trader contract and see published rates. For the broader comparison, the choosing a certificate trader checklist helps.