The Problem

STCs are stuck in the clearing house. Below we have explained in detail the cause of the delay and what the future holds for STCs in the clearing house.

An Introduction to the clearing house:

The clearing house was initially introduced as a platform to connect owners of STC’s with buyers or end users of STCs who are known as liable entities. The liable entities have to meet specific surrender requirements each quarter. What this means is that after a specified quarter, the liable entities usually large organizations involved in the supply of electricity must purchase a set number of STCs which is directly proportional to the amount of electricity (measured in MW) that they have sold.

STCs are created from the installation of renewable energy activities. Therefore when liable entities surrender STCs it shows that they are supporting renewable energy activities.

Why does it take 2-3 years to sell STCs in the clearing house?

In theory, the clearing house is an amazing idea. The government however, did not anticipate the huge success of solar power and other renewable activities in Australia. There are a few factors, which combined result in the delay for selling STCs in the clearing house:

• The amount of STCs being created far exceed the requirement of liable entities

• An emerging energy market has developed, in which STCs are traded, with the price being dependent on supply and demand.

With so many STCs being created, and no restriction on the emerging energy market that has developed, liable entities are able to acquire STCs at a much cheaper rate than they would through the clearing house. The clearing house is a fixed rate of $40 per STC; however the market rate fluctuates and has been as low as $18 and as high as $38.

So liable entities, in the interest of their bottom lines are electing to buy STCs from the emerging market rather than the clearing house. This is why there is hardly any movement in the clearing house and this is why you may be waiting 2-3 years to sell your STCs in the clearing house. As the only time there will be movement in the clearing house is when there is a shortage of supply in the open market, or the open market price per STC exceeds the clearing house price of $40 per STC.

If I wait, will the price in the market increase?

Based on fundamental and technical analysis, our environmental trading team suggests that the current market price for STCs is at the strongest level we have seen in years. Non binding data released by the Clean Energy Regulator suggests that the volume of STCs to be created in 2013 is in line with what was created in 2012; hence the price value per certificate in our opinion will either remain the same in the short term and follow a gradual downwards trend in the long term dropping at least $7-$10 per certificate from the current price.

If this would occur, it would mean the liable entities will buy up big and hold on to as many certificates as possible, so when the surrender periods come they could meet their requirements as cost effectively as possible. Unfortunately, again this would result in further delays in the clearing house.

What Is the Clearing House Solution?

The clearing house solution will purchase your STCs off you, and make payment to your nominated bank account within 24 hours of the transfer of STCs.

The clearing house solution allows individuals and non business entities to access the wholesale STC market, an exclusive market where an entry criteria is a minimum parcel of 5000 STCs. Without the clearing house solution, people like you would not be able to access such a high price for STCs. That’s why, if you have STCs in the clearing house, the best option is to trade them with us. We give you piece of mind, top value and fast payment so once and for all you can forget about the clearing house.

So contact us now on 1300 908 741 to take the first step. Please note this is a 24 hour service, 7 days a week.