This page answers two searches together: do STCs count as income for installers, and what is the ATO’s tax treatment. It is general information at the time of writing and not tax advice. Rules and rulings change, so confirm with the ATO or your accountant.
The installer’s position
An installer who takes assignment of STCs and sells them is running a business that earns revenue from two sources: the price paid by the customer for the system, and the proceeds of the certificates sold to a trader. Both are generally part of assessable business income. The costs of the system, labour, accreditation, compliance and trader paperwork are deductions in the usual way.
Where installers get tripped up is the timing and the shape of the numbers, not the principle.
Two ways the value shows up
When a customer assigns STCs for a discount, the discount reduces the price they pay. The installer then holds the right to create STCs, which is worth something. When the certificates are sold, cash arrives.
Depending on how your accountant chooses to present it:
- the customer invoice shows the system price, the STC discount and the amount the customer pays, and
- the sale of the STCs to the trader shows as a separate sale at the trader’s rate.
What matters is that the two together reflect the real commercial deal and that the GST on each is handled correctly. See GST on STC sales.
The homeowner’s position
A household that assigns its STCs to an installer for a discount is generally not treated as earning assessable income, because it receives a lower price rather than a payment. If a homeowner sells their own STCs directly and is not in business, the position differs again, and the ATO’s guidance applies. Our answer on whether the solar rebate is taxable covers the household side.
Cash versus accruals
If you report on a cash basis, STC income generally lands when you are paid. If you report on an accruals basis, it can land when you earn the right to be paid, which is earlier. That is why the same job can sit in different years for two installers. See recording STCs in your books for how installers typically structure the accounts.
What the ATO publishes
The ATO has a page on GST and the Small-scale Renewable Energy Scheme that sets out its view on assignments and supplies. For income tax, use the ATO’s guidance on business income and your own accountant. Do not rely on a trader’s explanation of your tax position, ours included.
What this means for installers
Keep clean records: the assignment form, the invoice, the claim ID, the RCTI and the bank deposit for every job. If you can follow one job from quote to deposit in a minute, so can your accountant, and so can an auditor. For cash-flow planning around certificate payments, see solar installer cash flow and STCs and our pricing page for how settlement is handled. The STC trading page lays out the sequence from claim to payment.