Federal STCs for heat pump hot water explained

The STC discount is the one heat pump incentive available in every state and territory. It is also the one most often buried in a quote as a single "rebate" line, so it helps to know how it is worked out.

What is an STC?

A small-scale technology certificate is a tradeable certificate created under the Small-scale Renewable Energy Scheme, run by the Clean Energy Regulator (CER). The CER says there are two types of water heater that can earn STCs: solar water heaters and air source heat pumps (CER). The certificates can be sold, so they have a cash value, and that value is what comes off your price.

How many STCs does a heat pump get?

Each eligible model is listed on the CER's register of solar water heaters, which shows how many STCs the model earns over a 10-year deeming period in each of five heat pump zones (CER register). The number you actually get is that 10-year figure multiplied by a factor for the install year, rounded down:

The CER explains that the deeming period drops by one year each year until 2030, and that the result is rounded down to the nearest whole number (CER). The example uses 30, which is the middle value I found for zone 3 in the CER's heat pump data file. Your model may be well above or below it.

What does an STC count look like across the register?

I downloaded the CER's air source heat pump data file (CSV) on 3 November 2026. It had 1,177 model rows. These are my own counts from that file, not CER statements:

The spread is wide. In the same zone the highest-earning model gets three to four times the STCs of the lowest. Your Home suggests the STC count is "a relatively fair way to compare the efficiency of heat pump hot water systems for your climate zone" (Your Home), so a higher number is a useful sign of a more efficient unit where you live.

Which zone am I in?

The CER sets five postcode zones for heat pumps (and four for solar water heaters) (CER postcode zones). For the capital city CBD postcodes:

Suburbs can sit in a different zone. Some outer Melbourne postcodes are zone 5, for example, and Cairns and Townsville are zone 1. Look up your own postcode in the CER document.

How much is an STC worth?

The CER doesn't set the price agents pay. It says open market pricing "is based on supply and demand and can vary daily", while the STC clearing house price is capped at $40 excluding GST (CER). Selling through the clearing house has no guarantee on how long the sale takes, which is why most installers sell on the open market. I don't quote a current market price because no official source publishes one.

Who claims the STCs, me or the installer?

Either. The CER says you can create STCs yourself or "assign the right to create to a registered agent", and that most people choose an agent. Assigning them usually forms part of your purchase contract and gets you a discount on the purchase price. If you create them yourself, you must do it within 12 months of installation (CER).

Why is the STC discount shrinking?

Because the scheme ends on 31 December 2030 and the deeming period drops each year. A model that earns a given number of STCs in 2026 earns 80% of that in 2027 (4 years instead of 5) and 20% in 2030. That doesn't mean you should rush a purchase, but it is worth knowing when comparing a quote now with one next year.

What makes a heat pump eligible for STCs?

• The model is on the CER register (model names there can differ from marketing names).
• The tank holds less than 425 litres.
• It is installed to your state or territory's licensing requirements.
• It is installed exactly as listed on the register, and within the model's eligibility dates.

See how to check a model on the register, and the rebates by state page for the state discounts that stack on top.