There’s only one official way to calculate STCs for solar water heaters. It’s set out in the Renewable Energy (Method for Solar Water Heaters) Determination 2016. This method is the only one accepted by the Clean Energy Regulator. If anyone uses a different calculation method, their claim simply won’t be accepted. So, if we want to claim STCs correctly, we’ve got to follow this process to the letter.
The Role of the Register of Solar Water Heaters
Everything starts with the Register of Solar Water Heaters. This is an official list maintained by the Clean Energy Regulator that includes all eligible solar hot water systems and air source heat pumps. Each entry on the register shows how many STCs a system would be eligible for over a ten-year period. That ten-year figure is important—it’s the baseline. But it doesn’t mean every system installed today will get ten years’ worth of STCs.
What the Deeming Period Means
That’s because we’re currently in the phase-out period of the Small-scale Renewable Energy Scheme. Each year from 2021 until 2030, the eligible “deeming period” shortens by one year. So, a system installed in 2021 was eligible for ten years’ worth of STCs. A system installed in 2024 only gets seven years. Come 2030, we’ll only be eligible for one year of STCs. That’s why the year of installation is so important when working out how many certificates we can actually claim.
How Multiplication Factors Work
To adjust the ten-year figure down to reflect the shorter deeming period, the Clean Energy Regulator uses what’s called a multiplication factor. This is a simple way to scale down the STC value. If the deeming period is seven years, the multiplication factor is 0.7. If it’s five years, it’s 0.5, and so on—dropping by 0.1 each year. This makes the calculation predictable and consistent.
Let’s go through an example to make it clearer. Say we’re installing a solar water heater that’s listed on the register with a ten-year STC value of 43. If we install it in 2024, the deeming period is seven years. So, we multiply 43 by 0.7, which gives us 30.1. The Regulator requires that we round this number down to the nearest whole number, so we’d be eligible for 30 STCs. That’s the number we can either trade or assign to a registered agent.
A Fair Way to Adjust Incentives
This method ensures that systems installed later in the scheme receive a fair and proportionate amount of support. The idea is that a system installed today has fewer years left to contribute to reducing emissions, compared to one installed several years ago. So, it’s only fair that the STC incentive gradually winds down.
What About Air Source Heat Pumps?
It’s not just solar thermal systems that are covered by this method. Air source heat pumps are also included under the same framework. Even though they work differently—they extract heat from the air rather than using direct sunlight—they still count as renewable energy systems because they reduce electricity consumption. These systems are also listed in the register, and the same multiplication factor rules apply based on the year of installation.
Do We Need to Calculate It Ourselves?
For most of us, the good news is that we won’t have to do these calculations ourselves. If we’re working with a Clean Energy Council accredited installer, they’ll usually handle the STC process from start to finish. That includes checking the register, applying the correct multiplication factor, submitting the paperwork, and even assigning the STCs to a registered agent. In most cases, this translates into a point-of-sale discount, which lowers the system cost up front.
Why It’s Worth Understanding Anyway
Still, it’s helpful to know how the process works. Understanding how STCs are calculated gives us confidence when we’re comparing quotes or checking rebate estimates. It also ensures we’re not missing out on certificates we’re entitled to. We’ve seen situations where installers overestimate the number of STCs a system can generate—especially if they forget to adjust for the current deeming period. If we understand the method, we can double-check the math and ask the right questions.
Let’s Run Another Example
Suppose the system we’re interested in has a ten-year STC value of 50. If we install it in 2026, the deeming period will be down to five years. The multiplication factor would be 0.5. So, 50 multiplied by 0.5 equals 25. After rounding down, we’re entitled to 25 STCs. That’s what should appear in our rebate paperwork or installer quote.
Why It Pays to Act Sooner
Because these multiplication factors drop by 0.1 each year, the incentive becomes less generous over time. That’s why many homeowners and builders are choosing to install systems sooner rather than later. The earlier we act, the more financial support we receive through STCs. By 2030, the incentive will be minimal—and the scheme is set to wind up altogether.
Keeping It Simple and Transparent
What’s also worth noting is how straightforward the process is once we understand the three moving parts: the register, the deeming period, and the multiplication factor. The register gives us the ten-year STC value for our chosen system. The deeming period is determined by the year we install. The multiplication factor adjusts the STC count to match the number of years our system will be reducing emissions. Multiply those together, round down, and we’ve got our entitlement.
Trading or Assigning STCs
Another thing we want to keep in mind is that while we can register and trade STCs ourselves, most people choose to assign them to their installer or a registered agent. It saves time and hassle, and we get the value of the certificates right away in the form of a discount. It’s a convenient system, and it works well—as long as everyone follows the official method set out in the 2016 Determination.