The STC/LGC threshold at 100 kW is one of the most commercially important design decisions in Australian solar. For most installers working on residential and small commercial systems, STCs are the only relevant certificate type. But for installers in the commercial and industrial segment, understanding the 100 kW boundary and the LGC market is necessary for accurate financial modelling and informed design decisions.
Side-by-Side Comparison
| Feature | STCs | LGCs |
|---|---|---|
| Eligible system size | Under 100 kW | 100 kW and above |
| Certificate creation | Upfront for entire deeming period | Annually based on actual generation |
| Incentive structure | One-time upfront discount | Ongoing annual revenue |
| Government price support | $40 clearing house floor | No government floor |
| Market price (2026) | ~$35–40 (broker market) | Market-determined (~$15–60+ recent range) |
| Scheme end date | December 31, 2030 | No fixed end (LRET ongoing) |
| Buyer obligation | Retailers surrender STP (%) | Retailers surrender RPP (MWh) |
| Registration | REC Registry | REC Registry (power station accreditation required) |
| Create yourself or assign | Assign to agent for upfront discount | Usually sold via long-term LGC PPAs or spot market |
| Risk for project owner | STC price movement (short-term) | LGC price uncertainty (long-term) |
How the STC Scheme Works
The STC scheme (Small-scale Renewable Energy Scheme — SRES) provides an upfront incentive for solar systems under 100 kW:
- System is installed by a CEC-accredited installer using CEC-approved components
- Owner (or assigned agent) registers the system in the REC Registry
- Registry generates STCs based on: kW × zone rating × deeming period (years to 2030)
- STCs are sold — either to an agent (who discounts the system price) or via the clearing house/broker market
- Electricity retailers buy STCs to meet their STP (Small-scale Technology Percentage) obligation
Scheme end: The STC scheme ends December 31, 2030. The deeming period reduces each January 1 — in 2026 it is 4 years; in 2027 it will be 3 years. Systems installed closer to 2030 create fewer STCs.
How the LGC Scheme Works
The LGC scheme (Large-scale Renewable Energy Target — LRET) creates ongoing certificate revenue for large renewable energy generating stations:
- The owner applies to accredit the generating station with the Clean Energy Regulator
- Accreditation is granted based on eligible renewable technology, installed capacity, and metering compliance
- Each MWh of eligible renewable electricity generated creates 1 LGC
- LGCs are registered in the REC Registry and sold — typically via a long-term LGC Purchase Agreement (PPA) with an electricity retailer, or on the spot market
- Retailers buy LGCs to meet their Renewable Power Percentage (RPP) obligation
Ongoing revenue: Unlike STCs (created once), LGCs are created monthly or quarterly as long as the system generates. A 1 MW solar farm creates approximately 1,400–1,800 MWh/year → approximately 1,400–1,800 LGCs/year.
The 100 kW Design Decision
For commercial systems near the 100 kW boundary, the STC/LGC choice has significant financial implications.
Worked comparison (system near 100 kW, Zone 3, installed 2026):
Option A — 99 kW STC system:
- STCs: 99 × 1.382 × 4 = 547 STCs
- STC value at $38: 547 × $38 = $20,786 upfront
- Generation: approximately 99 × 1,382 kWh/year = 136,818 kWh/year
Option B — 100 kW LGC system (slight size increase):
- LGCs: approximately 138 MWh/year = 138 LGCs/year
- LGC revenue: 138 × LGC price/year (ongoing)
- At $25/LGC: $3,450/year. At $40/LGC: $5,520/year
- Net present value (5-year, 7% discount rate): $14,100–$22,600
The decision: At current STC pricing (4-year deeming), the upfront STC value for a 99 kW system ($20,786) is competitive with the NPV of 5 years of LGC revenue. As the deeming period shortens (2027, 2028), the STC advantage declines — and LGCs become more attractive for systems near the threshold.
Key variable: LGC price uncertainty is the major risk factor. LGC prices have traded across a wide range historically. Projects relying on spot LGC prices for financial viability face material risk; projects with long-term LGC PPAs with creditworthy counterparties have more predictable revenue.
The 100 kW Threshold Is Not Always the System Installed Capacity
The 100 kW threshold for the SRES vs LRET is based on the system’s rated capacity in kilowatts. For string inverter systems, this is typically the total installed PV capacity. For some hybrid or battery-integrated systems, the calculation may differ. Confirm the applicable capacity definition with the Clean Energy Regulator or an accredited agent before making design decisions near the threshold.
LGC Accreditation Process
For systems 100 kW and above seeking LGC accreditation:
- Submit accreditation application to the Clean Energy Regulator via the REC Registry portal
- Provide evidence: eligible renewable technology (solar PV), installed capacity, commissioning date, metering details
- Metering requirement: Revenue-grade metering with AEMO-compliant remote data access is required for LGC accreditation. The meter records actual generation and provides data to the registry for LGC creation.
- Accreditation granted: The Clean Energy Regulator reviews the application and grants accreditation. Processing can take 4–8 weeks.
- LGC creation begins: After accreditation, the power station creates LGCs monthly or quarterly by submitting generation meter data to the REC Registry.
Model STC and LGC Scenarios for Commercial Solar Design Decisions
SurgePV’s financial model calculates STC value for systems under 100 kW and can model the LGC revenue scenario for larger systems — giving commercial solar installers and their customers the data to make informed decisions near the 100 kW threshold.
Book a DemoNo commitment required · 20 minutes · Live project walkthrough
Frequently Asked Questions
What is the difference between STCs and LGCs?
STCs are for systems under 100 kW — created upfront for the deeming period, providing a one-time upfront discount. LGCs are for systems 100 kW and above — created annually based on actual generation, providing ongoing revenue. The STC scheme ends 2030; LGCs are ongoing.
At what system size do LGCs apply?
100 kW and above. Below 100 kW: STCs. At or above 100 kW: LGC accreditation is available.
How are LGCs created?
By accredited generating stations registered with the Clean Energy Regulator. 1 LGC = 1 MWh of eligible renewable generation. Created monthly/quarterly based on meter data.
What is the LGC price?
Market-determined — no government floor. Has ranged from ~$15 to $85+ in recent years. Check current market price via the Clean Energy Regulator or LGC brokers.
Should I design just under or over 100 kW?
Detailed financial modelling is required. In 2026 with a 4-year STC deeming period, the STC value for a 99 kW system is substantial. As deeming shortens (2027 onward), LGCs become relatively more attractive. The decision depends on current STC price, LGC price expectations, and the customer’s time preference.
