A recent report from Green Energy Markets predicts the cost of solar power systems in Australia after rebates will increase substantially - jumping by as much as 90% compared to the first quarter of 2011.
Home solar power system purchases are subsidised by the Solar Credits program, which is based on Small-scale Technology Certificates (STCs) that accompany the sale of solar power equipment. STCs were formerly known as Renewable Energy Certificates (RECs). The value of these certificates is market driven, meaning it can fluctuate wildly according to market conditions.
The demand for STCs is created by companies such as electricity retailers who are required by law to buy and surrender a set number of STCs per year in order to meet renewable energy targets.
The Solar Credits program works on an STC multiplier basis, originally set to 5x for systems installed by June 30, which will decrease to 3x on July 1. When the multiplier reduction was announced, it resulted in a rush on systems; which in turn meant an influx of STC’s flooding the market and creating a surplus. This surplus has contributed to driving down STC value from $35 to as low as $20 per certificate.
The combination of the decrease in the Solar Credits multiplier and ongoing low STC values is putting substantial upward pressure on solar power system pricing, says Green Energy Markets’ latest Solar Report.
While the price of components and installation is continually dropping and competition between providers will mitigate some of the effects, Green Energy Markets predicts the net cost of solar power systems paid by customers in the months ahead will have increased on average by 50% to 90% compared to average pricing in the first quarter of this year.
The company forecasts around 300,000 PV systems will be installed in Australia 2011, significantly higher than its earlier estimate of at least 240,000. With an assumed average 2kW per system, Green Energy Markets estimates 600 MW capacity will be installed in 2011, representing more than 44.7 million STCs being generated - 9.5 million higher than its previous estimate.
