You’ve probably heard it before, you’ll definitely hear it again. 

If you’re in the market to buy a solar system for your home, office or business, there’s a good chance that your Facebook feed will be flooded with messages from solar retailers talking about the solar rebate phase out.

We know you’ve probably got questions and we’ll attempt to simplify things for you. In this article, we’ll go over:

  • What is the government solar rebate? 
  • How much discount am I eligible for?
  • How much will Australia’s solar subsidy reduce post the 31st December 2020?

What is the government solar rebate?

Households and small businesses across Australia that install a small scale solar energy system may be able to receive a benefit under the Small-scale Renewable Energy Scheme (SRES) to help with the purchase cost. The rebate is technically a discount on your quote that reduces the final price you pay for your system. This discount is issued in the form of STCs or small-scale technology certificates.

Understanding STCs

STCs or Small-Scale Technology Certificates are environmental credits that can be traded in exchange for an upfront discount on the cost of a solar system under the Federal Government’s Small-scale Renewable Energy Scheme (SRES). The solar rebate, often referred to as the STC scheme, STCs usually have a dollar value that can fluctuate at any time based on demand for the solar system, changes in Government (Congratulations Jacinda Arden, you’re seeing better days than our Australian politicians for sure) and other factors in the industry. The larger the solar system, the more STCs a customer is entitled to, and so greater the rebate.

To help you figure out the number of STCs you’ll receive for your solar installation, use this simple formula: kW solar system size x Deeming Period in years x Zone Rating = The number of STCs you’re eligible for

Important: Postcodes are allocated a zone (1-4) with rating numbers: 

  • Zone 1 – 1.622 rating
  • Zone 2 – 1.536 rating
  • Zone 3 – 1.382 rating
  • Zone 4 – 1.185 rating

How will the Solar Rebate be phased out?

Every year on January 1st, the amount of STCs a solar system is granted decreases meaning the rebate decreases. Currently, rooftop solar systems receive 11 years of STCs in advance when installed. That will decline to 10 years on 1 January 2021 and to 9 years on 1 January 2022 and so forth (until 2030).

Let’s look at an example: 

A 5kW solar system installed in Adelaide up until December 31 this year could be calculated as follows: 5kW x 11 years (deeming period) x 1.382 Zone Rating = 76 tradable STCs

At a given estimated market value of $37* per STC (your solar installer should be able to tell you the current value – the lowest value STCs have held is $16*, while $40* is the highest value), roughly $2,812 in actual rebates will be received – that’s a big chunk of improvement that substantially decreases the upfront cost of going solar!

If you are planning to buy next year, you will be eligible for 69 STCs. The STCs multiply by the dollar value will be worth: 69 STCs x $37* = $2,553.

That’s a difference of $259! 

Important: The amount of subsidy would be different if you reside in a different zone and/or have a larger / smaller system.

*Estimated value only – values fluctuate due to market conditions.

How much will the subsidy reduce in coming years?

Since the scheme is being terminated, next year the deeming period will decrease. The following graph shows the effect of the shortening deeming cycle on the STCs until 2030, estimating a 5kW installation in Adelaide (Zone 3) and an STC value of $37* per certificate.

So for the maximum benefit, it’s best to get your system installed early! And if you want to claim the current solar STC valuation, your solar panel system must be purchased and installed before 31 December 2020.

Over the past four years alone, the value of the STCs have dropped by about 15%.  So for each year you wait, the amount of money that you save reduces (not to mention the exorbitant electricity bills that you would still be paying).

But of course, do your research first, and our Top 5 Reasons to Install a Solar System Now is a good place to start. 

Venergy is Australia’s leading commercial and residential solar energy retailer, providing high-quality solar installations for Aussie homes and businesses. Contact us today on 1800 836 374 to get a free solar quote. We can offer you personalised pricing based on the best solar system for your home.