Saving money through STCs

Green Lifestyle online

We asked an expert on solar hot water, the managing director of Sanden Mark Padwick, to explain how to save money on your hot water through the federal government's Small-scale Technology Certificates (STC's).


A new hot water system is a big purchase, but if you do your homework you can get a sizeable discount on an eco-friendly hot water system, the best of which will also cut your hot water energy costs up to 78 per cent right away compared to a conventional electric hot water system.

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While some government rebates for eco energy systems have been phased out, Small-scale Technology Certificates, or STCs, are still available for eco-friendly hot water systems such as heat pumps and solar hot water systems. We spoke to the managing director of Sanden, Mark Padwick, about STC's - what are they and how can you use them to your advantage?

What are STCs?
"STCs are a measure of the energy efficiency of a hot water system, because they represent the amount of electricity a system produces or displaces – an STC is the equivalent of one megawatt hour of renewable energy generation. Also, each STC carries a monetary value, which varies, from time to time, as STCs are a tradeable commodity.

"Importantly, you can exchange these STCs for a rebate that is normally offered as a discount on the purchase price of the chosen hot water system. To be eligible, the hot water heat pump and solar water heater you purchase must be new and listed in the Register of Solar Water Heaters, managed by the Clean Energy Regulator.

"I'd recommend you check out which system attracts the most STCs on the Clean Energy Regulator's site (here). You’ll see that the Sanden Eco Hot Water Heat Pump System attracts the most STCs as it has the highest energy efficiency of any currently available hot water heat pump systems."

How much rebate can I get off the purchase price?
"The number of STCs – and therefore the cash rebate you receive – will depend on three factors: what type of system you purchase, where you live, and other rebates.

"Investing in a more efficient, higher quality eco hot water system will attract more STCs and give you not only a bigger upfront rebate, but cheaper hot water on an ongoing basis. To work out the savings from STCs according to the system you intend to purchase, you can use the rebate calculator available on our website. You get a higher quality system for better value and save about $1,000 off the purchase price, depending on where you live and the current value of the STC.

"Where you live matters because Australia is divided into five STC temperature zones (click through to see a picture of this), which determine the number of STCs applicable to the area where you live for the system you’re purchasing. For example, the same hot water heat pump might attract 34 STCs in Melbourne, 32 STCs in Sydney, and 26 STCs in Cairns, due to changes in the temperature zone.

"In order to claim the STCs, some paperwork is required. Generally, the plumber, installer or retail outlet selling the system will offer to discount the purchase price of the system, based on the number of STCs that come with the system multiplied by the current STC value. Alternatively, people can apply directly to an intermediary to sell the STCs that come with the system, although this is a more complicated process and might not guarantee a bigger discount.

"Other rebates matter because some State governments such as Victoria and South Australia offer additional rebates to eligible households that replace their electric storage hot water system with a heat pump or solar system, so check out the rules for your home."

Why should I consider a solar hot water system?
"In most states you can still purchase conventional electric hot water systems, but the federal government is eager to encourage Australians to invest in highly efficient hot water heat pumps and solar hot water heaters.

"The reason is, conventional electric hot water systems are at least three times less energy efficient than all other hot water alternatives. While initially costing less to buy than eco systems, they cost you and the environment much more in the long term.

"I think that if you work smart and take advantage of government rebates like STCs, you’ll get a significant discount on the purchase price of a new eco hot water heat pump system, and save a significant amount on your ongoing hot water costs in years to come."