STCs work by turning a government obligation on electricity retailers into a discount on your customer’s solar quote. The easiest way to see it is to follow one job. We will use a 6.6 kW system in zone 3, installed in 2026, and track who holds the certificates and who is waiting on whom at each stage.
The headline is that the customer gets their benefit on day one, as a lower price, while the installer carries the risk and the wait. Understanding that gap is the whole of the job for an installer who wants to stay solvent.
Day 0: the quote
The system earns 45 STCs (6.6 kW x 1.382 x 5 years, rounded down). With spot at about $38 that is roughly $1,710. The quote might show a gross price of $7,900, a deduction for STCs of $1,710, and a net price of $6,190 payable by the customer.
That deduction is an assumption. The installer is promising the discount using a certificate price it does not yet know. If the market drops, the installer wears the difference unless it has locked a rate with a buyer. Our answer on quoting an STC discount shows how to present it.
Day 1: install and assignment
The crew installs, takes the compliance photos and has the owner sign an assignment form. That document is the legal transfer of the right to the certificates from the owner to the installer or its agent. Without it, nothing downstream works. The STC assignment form guide covers the required fields.
At this point the installer has spent money on equipment and labour, collected a deposit and possibly the balance, but holds only an unclaimed entitlement worth $1,710.
Days 2 to 7: claim and check
The claim is created in the REC Registry with the system details, serials and evidence. A good pre-check catches errors before lodgement. Then the regulator validates the claim and registers the certificates. The system’s STCs appear as registered and tradable once that is done.
If your trader pre-checks, much of that review happens before the regulator sees it. A rejected claim sends the process back to the start. That is why rejection reasons cost more than the time: they push cash forward by weeks. See top STC claim rejection reasons.
Sale: three routes
Once registered, the certificates can go three ways.
| Route | Price | Speed | Risk |
|---|---|---|---|
| Clearing house | $40 fixed (ex GST) | Queue-based, slowest | Wait time |
| Broker or trader | A little under $40 spot | Days to 1 day | Counterparty |
| Hold and wait | Unknown | Unknown | Price and deeming risk |
A trader with a published daily rate removes the price risk. Once the claim is complete and the rate is locked, the number on the screen is the number paid. See how STC trading works for the mechanics of a trade.
Settlement: the invoice and the cash
The installer is the supplier of the certificates, so GST applies to the sale and the buyer typically issues a recipient-created tax invoice. The guide on RCTI, GST and ABN has the details. After the invoice, cash arrives in the installer’s account. On a ten-business-day trader that is two weeks of your capital. On a 24-hour trader it is one day.
What the retailer does with the certificates
Behind the scenes the electricity retailer buys the certificates, either from the open market or the clearing house, and surrenders them to the CER to meet its annual obligation. The certificate is then cancelled and the story ends. The cost flows into the retailer’s compliance costs, which is how the rebate is funded without a line in the federal budget.
What goes wrong
Most failures happen at the three handoffs. An unsigned assignment form breaks the first. A rejected claim stalls the second. A slow buyer drags out the third. If you want more detail on timing, read how long STC payment should take.
The same job with a slow buyer
Run the numbers on cash flow. Suppose your crew installs ten 6.6 kW systems in a month, each earning 45 STCs worth about $1,710. That is $17,100 of certificate value sitting in the pipeline. If your buyer pays in ten business days, the average balance you are financing is large enough to matter when you also have to pay panel suppliers on 30-day terms. If your buyer pays in one day, the same business carries a fraction of that exposure.
This is not an abstract point. Installers who run lean margins often find that the gap between paying wages and receiving certificate money is the tightest part of their month. Settlement terms are therefore a feature of the product, not a footnote. When you compare offers, compare the days to cash alongside the rate. A rate one cent lower with payment next day can be worth more than a rate one cent higher with payment in two weeks. The checklist for choosing a certificate trader walks through the full list.
Who carries which risk
- Customer: bears none if the quote is fixed and the assignment is signed. They benefit from the discount immediately.
- Installer: bears price risk until a rate is locked, rejection risk until the claim clears, and counterparty risk until the buyer pays.
- Buyer: bears price risk once it has agreed a rate, and compliance risk if a registered claim is later cancelled.
- Regulator: bears the audit risk of the whole scheme, which is why it tests evidence.
Pushing price risk to a buyer that publishes a daily rate, and pushing rejection risk down with a pre-check, are the two things an installer controls most directly.
Why the order matters
The assignment and the photos are time-sensitive and cannot be easily recreated, so they sit at the front of the chain; claim data and pre-check can be fixed afterwards without a return visit. This is why experienced operators front-load their effort on site and keep the office work routine. A job that leaves the property with a signed form and a complete photo set is, in effect, already most of the way to cash.
What to do next
If the cash cycle is the pain point, compare settlement terms against the pricing page and see how we handle it on how it works. The STC trading pillar has the installer-side overview, and the answer on who buys STCs names the buyers. When you want a rate locked, start trading.