Small-scale technology certificates are the working mechanism of the Small-scale Renewable Energy Scheme (SRES), the part of Australia’s Renewable Energy Target that supports rooftop solar, small wind, hydro, solar hot water and heat pumps, and, since 1 July 2025, home batteries. This article is the policy-level view: what the law requires, who carries the cost, and how that shapes the price of a certificate.
The design is simple once you see it. The government does not fund the rebate from the budget. It places an obligation on electricity retailers to buy certificates, and the cost is spread through the electricity market. Installers and households are the sellers; retailers are the buyers; the Clean Energy Regulator (CER) sits in the middle as the referee and the registry keeper.
The legal frame
The Renewable Energy (Electricity) Act 2000 and its regulations set up two certificate markets. Large-scale generation certificates (LGCs) reward big renewable power stations. STCs cover small systems, with limits of 100 kW capacity and 250 MWh annual output for solar. A system within those limits can create STCs once, at installation, for its deemed output. From 1 October 2026 the same applies to solar above 100 kW and up to 1 MW, with a fixed five-year deeming period (mid-scale solar STCs).
The SRES is uncapped. Anyone with an eligible system gets certificates, no matter how many systems are installed in a year. That is unusual among subsidies and it is why the scheme has been so effective, and why demand for retailer compliance has to be re-estimated every year.
Who is liable, and for how much
Liable entities are mostly electricity retailers. Each calendar year the CER sets a Small-scale Technology Percentage (STP), based on forecasts of how many STCs will be created. A retailer multiplies the STP by its relevant electricity acquisitions to find how many certificates it owes. Surrender happens through the year, with liable entities buying from the open market or the clearing house.
The practical effect is predictable demand. Retailers must buy, and the amount is set annually in advance. For sellers that is reassuring: you are not selling into a speculative market, you are selling into a compliance market.
The clearing house and the $40 ceiling
The CER runs a clearing house inside the REC Registry. Anyone with registered STCs can sell there at a fixed $40 each (ex GST), and liable entities can buy at that price. It is first in, first served, and sellers can wait in a queue.
Because the clearing house offers a fixed $40 to sellers, no seller needs to accept less than the open-market price on a permanent basis, and because buyers can always purchase at $40, spot prices do not exceed it for long. At the time of writing the spot market has been roughly $38 to $40. The gap below $40 is what the market charges for speed and certainty of payment. We cover that in STC trading explained.
The deeming period and the sunset
Solar certificates are calculated by “deeming”: the scheme credits future years of expected output up front. For 2026 installs that is five years. It falls to four years for 2027 installs and keeps dropping by one a year, to a single year in 2030. The scheme ends on 31 December 2030.
| Install year | Deeming years | 6.6 kW zone 3 STCs |
|---|---|---|
| 2026 | 5 | 45 |
| 2027 | 4 | 36 |
| 2028 | 3 | 27 |
| 2029 | 2 | 18 |
| 2030 | 1 | 9 |
Those figures use the zone 3 rating of 1.382 and round down. In other words the certificate count for a given system falls by about 20 per cent each January in the first step, and the rebate falls with it unless the price rises. The deeming period guide has the zone ratings for all four zones.
What the scheme covers now
Solar PV is still the volume. Heat pumps and solar hot water earn STCs on a different formula based on the model’s regulator-listed rating. Batteries joined with the Cheaper Home Batteries Program: STCs for batteries from 5 to 100 kWh usable, with up to 50 kWh eligible, a factor of 6.8 per kWh for 2026 installs falling to 5.7 from 1 January 2027 and to 5.2 on 1 July 2027. See the battery STC pillar and our installer guide to the program.
What it means for your business
Three practical consequences follow from the design. First, volume is not the risk; time is. Certificates lapse 12 months after installation if not created. Second, price is bounded: the clearing house sets a $40 ceiling, so forecasting is about how far below it the spot market sits. Third, compliance sits with the installer and the system owner: the CER audits, and defective claims can be cancelled and clawed back. Our audit guide covers that.
What changed recently
Two changes matter for anyone reading older material. First, batteries were added to the scheme on 1 July 2025, and from 1 May 2026 the battery benefit became tiered by size: full value on the first 14 kWh, 60 per cent from 14 to 28 kWh and 15 per cent from 28 to 50 kWh. Second, evidence rules tightened. Photo and documentation requirements for batteries changed on 1 March 2026, and the regulator has said plainly that it is looking harder at installation evidence across the scheme.
For a new installer, these changes raise the standard of paperwork rather than the difficulty of the sale. A crew that photographs consistently and checks serials on site can run any job type through the same process.
A note on timing risk
The scheme is quietly designed to reward decisions made early in the calendar year and punish delay. A system installed on 31 December earns a full five-year count; one installed on 1 January earns four years. Because certificate counts and cash both depend on the installation date, a delayed install is not just a delayed job, it can be a cheaper one for the customer and a thinner margin for you.
That is also why the audit trail matters. If installation date, photo timestamps and the electrical certificate all line up, the date is defensible. If they do not, a regulator can ask why. The audit guide shows how to keep dates consistent across the file.
Reading list by role
| If you are | Start with |
|---|---|
| A homeowner | How an STC discount appears on a quote |
| A new installer | STC scheme explained for installers |
| A sales rep | How many STCs a system gets |
| An office admin | STC compliance checklist |
What to do next
Get the basics right with the STC trading pillar and the how it works walkthrough. Read the answers on deeming periods and when the STC scheme ends. When you are ready to sell certificates, the start trading page takes about ten minutes.