A forward contract is a promise about the future: you agree to deliver a volume of STCs over a set period, and the buyer agrees to pay a fixed price for them. A “12-month price lock” is usually a forward with a one-year term. The idea is borrowed from energy and commodity markets, and it appears in STC trading now and then, mostly for larger installers.
How a forward works
You and the trader agree three things: the price, the volume (or a minimum and maximum), and the period. As you create certificates, they settle at the agreed price whether spot is higher or lower on the day. If you fall short of volume, the contract may charge you a shortfall or end early.
Why anyone wants one
A fixed price is certainty. If you sell solar on fixed quotes with the STC discount built in, a locked price removes one moving part. It also helps a trader that has sold the certificates ahead to a buyer.
Why it can cost you
STC spot has been roughly $38 to $40 at the time of writing, with the Clearing House ceiling at $40. That is a narrow band. The upside you give up on a forward is small, but so is the downside you are protecting against, which means the lock is worth less than it sounds. Meanwhile the risks are real:
- Volume shortfall. Install activity swings with weather, demand and policy. Missing the contracted volume can trigger penalties.
- Deeming changes. The deeming period shortens every year, so certificates per system fall in January. A contract signed on 2026 assumptions can be awkward in 2027.
- Exclusivity. Many forwards bind all your certificates to one trader. See using two STC traders.
- Exit terms. Ask what happens if the trader is paid late or you want to leave.
Daily lock versus forward
Most installers do not need a 12-month forward because they can get most of the benefit from a lock at lodgement: the rate is fixed from the moment a complete claim is lodged, so you know exactly what a job pays. Read how an STC rate lock works and rate lock versus spot.
What this means for installers
If a trader offers a forward, ask for the contract in writing and run it past the checklist in what to check in an STC trader contract. Confirm volume terms, exclusivity, termination and any clawback. Energy Merchants publishes its rate daily on the pricing page and locks it when a complete claim is lodged, with no fees. For the larger picture of how traders buy, see STC trading and how it works.