The last week has seen a massive crash in the value of carbon credits, or "Small-scale Technology Certificates (STCs) as they're technically known. The crash in price is good news for big polluters, and bad news for everyone else, especially solar power and solar hot water buyers.
STCs are like shares - they are traded on a "green energy" market and their value rises and falls according to supply and demand. The explosion in solar power has seen an oversupply of STCs in the market. How much oversupply? Well, big polluters will be required to purchase 7 million STCs in the second quarter of 2011, however STCs are currently being created at a rate of 1 million a week. At this rate, close to 13 million STCs will be created this quarter - nearly double what is required.
It's no wonder then that the wholesale price of STCs has fallen from close to $40 to under $28 in the space of a week. With the oversupply issue only likely to get worse, the STC price looks like it will head further south, which is bad news for prospective buyers of solar power and solar hot water.
For example, a 1.5kW solar power system is eligible for 130 STCs. This equates to a "rebate" of around $5,200 if STCs are valued at $40; if STCs are only valued at $28, then the "rebate" is only $3,640. At least when you buy a solar power system from Neco your price is locked (that is, the STC price is locked in at the price you are quoted). Many companies simply pass on the fluctuations in STC price so that in many cases, you don't know what your final price will be until the day of installation.
So to summarise, don't delay your solar power purchase any longer! Buy now before the STC price drops further, and before the solar multiplier drops from 5 to 4 from 1 July (there is even rumour of it dropping from 5 to 3 to slow down the number of STCs being created and to help the STC price recover). Uncertain times! But a good time to buy a solar power system from a reputable solar power company.
