The Small-scale Renewable Energy Scheme (SRES) was designed with a finish line. It does not end with a cliff, though. It ends with a ratchet: a rule that takes a little more value out of each install every year until the last install date, 31 December 2030. Understanding the ratchet is more useful than worrying about the end date, because it is the ratchet that shapes quotes, installer revenue and the order of work between now and then.
This article explains the mechanics, one dial at a time, and shows what the wind-down does to the income of a typical installer. It also covers the part of the scheme that is growing, not shrinking. A companion piece sets out the year-by-year schedule, and the broader Renewable Energy Target explainer covers the policy around it. At the time of writing STCs have been roughly $38 to $40.
Dial one: the deeming period
STCs for small-scale solar are created up front, based on the electricity the system is deemed to produce over a number of years. That number is the deeming period: five years for 2026 installs, four for 2027, and then one fewer each year to one year in 2030. The same system creates fewer certificates every January. For a 6.6 kW system in a zone 3 postcode (rating 1.382), the count runs 45, 36, 27, 18 and 9 from 2026 to 2030.
This is the main wind-down mechanism. It is automatic and does not depend on market conditions or a decision by anyone. It is also why the discount on a quote falls year by year even if nothing else changes.
Dial two: the liability percentage
Demand for STCs comes from liable entities, mainly electricity retailers, which must surrender certificates in proportion to the electricity they buy. The Clean Energy Regulator sets the proportion each year as the Small-scale Technology Percentage (STP), reported at about 11.67 percent for 2026. The regulator sets the figure from its estimate of how many certificates will be created, so a falling creation forecast lowers the percentage. Both dials move together: fewer certificates are created, so fewer need to be surrendered.
Dial three: supply
Supply depends on how many systems are installed. Rooftop volumes remain high, and batteries added a large new source through the Cheaper Home Batteries Program, whose budget has been reported as expanded from $2.3bn to $7.2bn. The battery factor also steps down every six months, 6.8 at the time of writing, 5.7 from 1 January 2027 and 5.2 from 1 July 2027, continuing down to 2030. Fewer certificates per kWh means less supply per battery.
The part that is not shrinking
From 1 October 2026, the scheme extends to mid-scale solar. Systems above 100 kW and up to 1 MW installed from that date create STCs with a fixed five-year deeming period, rather than LGCs. The Renewable Energy (Electricity) Regulations were amended in 2026, and the CER has said applications open mid to late November 2026. Below 100 kW nothing changes, and above 1 MW remains LGCs. See mid-scale solar STCs.
A 500 kW system in zone 3 creates 500 x 1.382 x 5 = 3,455 STCs. That is equal to the certificates of about 77 typical homes created in 2026. So the scheme is winding down at the small end while opening up at the commercial end, and installers who sell to businesses have a new product to plan around.
What the wind-down does to installer revenue
Take an installer who completes 400 residential 6.6 kW systems a year in zone 3 and sells every certificate at a constant $39. The certificate value in each year is:
| Year | STCs per job | STCs for 400 jobs | Certificate value at $39 |
|---|---|---|---|
| 2026 | 45 | 18,000 | $702,000 |
| 2027 | 36 | 14,400 | $561,600 |
| 2028 | 27 | 10,800 | $421,200 |
| 2029 | 18 | 7,200 | $280,800 |
| 2030 | 9 | 3,600 | $140,400 |
If volumes and price stayed flat, certificate value would fall by $561,600 over four years. Whether the installer feels that as a lost margin or as a lower customer price depends on what the market does. In a competitive market, customers expect the system price to absorb the decline. A crew that quotes the same price as in 2026 will see its win rate fall as the discount shrinks.
Who this affects
- Homeowners see a smaller discount on the same system, so the payback period for solar lengthens. See should I buy solar before 2027.
- Installers see smaller certificate value per job and have to compete on service, speed and product.
- Traders see a shrinking certificate volume at the small end, and a new mid-scale source.
- Retailers see a falling liability as the percentage adjusts.
What happens at the end
STCs can only be created for installs up to 31 December 2030. How final-year certificates are surrendered and what the regulator does with any remaining supply is a matter for the CER, so check its pages as 2030 approaches. For prices, the clearing house ceiling of $40 limits the upside, and the downside depends on supply and the final liability. Anyone claiming to know the price in 2030 is guessing. See what could move the STC price and our price forecast guide.
From the desk: the best response to a ratchet is to be paid quickly each year. Every certificate you create is worth more today than the same certificate next year, and a trader that locks the rate on lodgement and pays in 24 hours converts that value to cash before the market or the rules move. Lodge each job within a day of commissioning.
Planning to 2030
- Rebuild quote templates each January with the new deeming count.
- Model each year’s certificate revenue using the table above with your volumes.
- Diversify. Batteries and mid-scale solar are the growth segments, hot water continues to 2030, and VEECs and state schemes sit alongside.
- Keep compliance tight. Audits do not stop when the scheme does. See how STC audits work.
- Watch cash. Smaller certificate volumes make a late payment more painful.
Questions customers ask about the wind-down
Customers hear “the rebate ends in 2030” and draw the wrong conclusion in two directions. Some think they must install immediately or lose everything. Others assume they can wait until 2030 and still get today’s discount. Neither is right. The discount shrinks on a published path, and the right time to install depends on the household’s usage, the price of equipment and the finance available, with the certificate line as one input. Our answers on whether the rebate drops every year and the scheme ending are written for that conversation.
What to do next
- Read the scheme-change pillar at /stc-trading/scheme-changes/ and the answer on when the STC scheme ends.
- See the SRES definition for a short version.
- Check today’s rate on the pricing page and the process on how it works.