Trying to predict where the STC price will go is proving a little tricky of late. It would seem that the normal supply and demand economics are not influencing the STC spot price like you would expect. Under any normal trading circumstances, the massive oversupply of STC’s (almost 50% more certificates were created in 2018 than in 2017) would and should mean that the STC price would crash. Just think about it, there is a 50% oversupply of certificates in the market. There are more certificates in circulation that what the liable entities need to buy up to meet their quotas?
My prediction for 2019. We have had an amazing 3-4 years now of relative STC price stability (low fluctuations) and high values (STC price has been constantly in mid to high 30’s).
A correction is looming. We have seen the correction in the LGC market.
This article from Ecogeneration 11/02/2019 explains the LGC slump
Subsidies slowdown
It’s never prudent to place too much faith in subsidies in any industry, as benefits can evaporate with a swing of the political pendulum. In Australia, the clean energy debate is more like a car park brawl these days, but owners of solar systems big and small have banked on subsidies to get their investments over the line. The large-scale generation certificate (LGC) market applies to generation from systems larger than 100kW and is due to expire in 2030, but the spot price began a steep decline last year, falling 48% in the 12 months to mid-January 2019.
Owners of systems installed only a couple of years ago who had banked on LGC prices around $85/MWh will be feeling sore, and anyone budgeting for a new system had better understand the volatility in the spot price for LGCs.
Hooper at GEM Energy says the slump in LGC prices “caught everyone blind-sided”. He expects the trend to continue. “Post 2020 the prices are expected to be around $15/MWh,” he says.
STC Futures
I believe that we will see a slow and steady decline in the STC price – potentially bottoming out in the low 20’s come August/September this year before a gradual recovery.
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