What are LGCs and STCs for solar projects

Solar Farms and Remote area Power solutions.

Solar Systems are rewarded for their Installations.

The fact that we need to reduce our carbon footprint and reduce our emissions is acknowledge and LGCs , STCs and RECs have been created and traded i the market generally by large corporations who need to by law reduce their carbon intense activities, these certificates range in value and vary in the market like any share price or commodity.

The installation of a solar system weather it is small (residential) or a commercial or large scale project it will attract certificates accordingly.

Smaller system example (STCs) If a residential PV system was installed of 5Kw it would attract 103 STCs at today's rate (Nov 29th November 2013) the online trading rate with Greenbank Environmental is $35.50, this would mean you would multiply the rate by the QTY and this would be the point of sale discount available - $3,656.50.

Larger Projects example(LGCs) A factory installation of 250kw, would attract  .... LGCs at today's rate (Nov 29th November 2013) the online trading rate with Greenbank Environmental is $........., this would mean you would multiply the rate by the QTY and this would be the point of sale discount available - $........

Large-scale generation certificates

Accredited renewable energy power stations are entitled to create large-scale generation certificates (LGCs) based on the amount of renewable electricity they produce above their baseline.

What is an LGC?

  • A LGC is an electronic form of currency created in the REC Registry by eligible entities. 
  • One LGC is equivalent to 1 MWh (megawatt hour) of eligible renewable electricity generated above the power station’s baseline.
  • LGCs are created in the REC Registry by the registered person for the accredited renewable energy power station. The LGC record, including ownership and status is available in the REC Registry. To be eligible to create LGCs, power stations must generate their electricity from approved renewable energy sources such as solar energy, wind, ocean waves and tides, geothermal-aquifers, wood waste, agricultural waste, bagasse (sugar cane waste), black liquor (a by-product of the paper-making process), or landfill gas.
  • A full list of eligible renewable energy sources is included in Section 17 of the Renewable Energy (Electricity) Act 2000 (the Act). There are currently more than 17 different types of eligible renewable energy sources being used in accredited power stations.
  • Electricity that is generated from fossil fuels, or waste products derived from fossil fuels, is not eligible for LGCs.
  • During the accreditation process of a power station, the Regulator determines the baseline – generally the average amount of electricity generated from eligible renewable energy sources over the 1994, 1995 and 1996 years. Eligible parties can only create LGCs for electricity generated above the baseline.
  • Power stations which generated electricity for the first time after 1 January 1997 have a nil baseline.
  • LGCs must be correctly created and validated in the REC Registry before they can be made available for purchase and/or surrender.
  • LGCs are sold through the open LGC market, where the price will vary according to supply and demand. Payment for LGCs is completed outside of the REC Registry.
  • LGCs are usually sold to liable entities. The liable entities are required by law to surrender a set number of LGCs to the Clean Energy Regulator in each calendar year.

What is an STC?

Small-scale technology certificates, or STCs, are a tradeable commodity attached to eligible installations of renewable energy systems (including solar panels, solar water heaters and heat pumps).

Under the Federal Government’s Small-scale Renewable Energy Scheme (SRES), when you install an eligible system, you may claim a set number of these STCs.

This number is based on the amount of electricity in megawatt hours (MWh):

  • generated by your small-scale solar panel, wind or hydro system over the course of its lifetime of up to 15 years; or
  • displaced by your solar water heater or heat pump over the course of its lifetime of up to 10 years,

where one STC equals one megawatt hour (MWh) of electricity generated or displaced.

The number of certificates you can claim may vary depending on your geographic location, what you’re installing, whether your installation is eligible for Solar Credits, and/or the size and capacity of the installed system. For example, a 1.5kW solar panel system in Melbourne might be eligible for a minimum 21 STCs, while a solar water heater in Hobart might be eligible for a minimum of 20 STCs.

Solar Credits is a mechanism which increases the number of STCs that can be created for eligible installations of small-scale solar panel (photovoltaic – PV), wind, and hydro systems.