A beginners guide to the solar rebate

To cut a long story short, the current solar ‘rebate’ is an upfront discount off the cost of your solar PV system.

solar panel image

The exact $ amount of that discount will depend on a few factors, but at the end of the day, what matters is your Total Out of Pocket Price (after the discount has been applied) listed on your quotes. But if you really want to know how it all works, read on…

The Small-scale Renewable Energy Scheme (SRES)

Under the SRES, once a Solar PV system is installed, Small-scale Technology Certificates (STC’s) can be created. These STC’s represent the amount of renewable energy that is expected to be generated by the system between the current year and the year 2030 (when the Scheme ends)

For every 1,000 units (kWh) of electricity your solar PV system is expected to generate, 1 STC can be created.

  • Bigger system = greater expected generation = more STC’s
  • Sunnier location = greater expected generation = more STC’s
  • The closer we get to the year 2030 = lower expected generation = less STC’s

Below is a table showing the number of STC’s a solar PV system is currently eligible for in different parts of Australia.

3kW 5kW 6.5kW 10kW
Brisbane 53 89 116 179
Sydney 53 89 116 179
Melbourne 46 77 100 154
Hobart 46 77 100 154
Adelaide 53 89 116 179
Perth 53 89 116 179
Darwin 59 99 129 199
Alice Springs 63 105 137 210

Or you can use the Clean Energy Regulator’s online calculator.

But why do STC’s matter? Because they’re worth money!

The Renewable Energy Target

Under the Renewable Energy Target, liable entities (usually electricity retailers) are required to source a certain amount of renewable energy each year. One way they meet this obligation is by buying the STC’s that have been created by solar systems installed by homes and businesses.

How much those ‘liable entities’ pay for STC’s depends on Supply & Demand.

When the solar industry is booming, more STC’s are created and put on the market for sale. This can create an oversupply which can cause STC prices to fall. When STC prices decrease, so does the ‘rebate’ for solar.

By law, the maximum value of an STC is $40. But in the past, STC prices have dropped to as low as $17. Fortunately, at the time of writing, STC’s are currently worth $38.

So, for example, a 5kW system is currently eligible for $2,926 – $3,990 worth of STC’s. Not bad, hey?

To receive this as an upfront discount off the cost of your solar PV system, all you have to do is assign the STC’s to your chosen solar company, so they can then on-sell them.

But remember, every year STC’s are reduced. In other words, the longer you wait, the lower the ‘rebate’.

So what are you waiting for?

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