Australia’s love for solar power is propelling the country’s renewable energy growth while maintaining a reliable and affordable energy system. Despite Covid-19 restrictions, it now has the highest solar capacity per person of any country in the world, with household solar installed in one out of every four Australian homes, according to Energy Minister.
If you are in the market to buy a solar system for your home, there is a good chance that your Facebook feed will be flooded with messages from solar retailers talking about the government subsidies reducing again after 31 December 2021.
Considering going solar? Our Top 5 Reasons to Install a Solar System Now is a good place to start.
We know you’ve probably got plenty of questions about the solar rebate phase out. Here at Venergy, we will attempt to simplify things for you. In this article, we will go over:
- What is the government solar rebate (STC)?
- What is the current STC value?
- What will happen to solar rebate (STC) after 31 December 2021?
- Where do I claim STCs?
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 SmallSscale 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.
Is government solar rebate the same thing as 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, and other factors in the industry. The larger the solar system, the more STCs a customer is entitled to, and so greater the rebate.
How to calculate STCs?
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 (years left in the scheme) x Zone Rating = The number of STCs you’re eligible for
Every year until 2030, the deeming period for solar PV installations decreases by one year. The number of certificates that can be issued for an eligible system will be reduced as a result; the lesser the certificates, the lower the discount!
Postcode zones are one of the factors used to calculate the quantity of renewable energy certificates a solar
photovoltaic (PV) system may be eligible for once it is installed—each zone represents the level of solar radiation
for a geographical area.
You may also use the STC calculator to figure out how much money you could save by installing solar panels.
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 10 years of STCs in advance when installed. That will decline to 9 years on 1 January 2022 and to 8 years on 1 January 2023 and so forth (until 2030).
The current STC value (by the time this article was written), according to Demand Manager, is $39.30.
Let’s look at an example:
A 5kW solar system installed in Adelaide up until 31 December 2021 could be calculated as follows: 5kW x 10 years (deeming period) x 1.382 Zone Rating = 69 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 $2,553 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 62 STCs. The STCs multiply by the dollar value will be worth: 62 STCs x $37* = $2,294.
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 2021.
Over the past five years alone, the value of the STCs have dropped by about 15%. Every year on January 1st solar system rebates will decline until they will eventually end in 2030. 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).
How and where do I claim my STCs rebate?
Claiming of your STCs can be done as a point of sale discounts with an accredited solar agent or installer. Or you can choose to claim the STCs by yourself, but you will need to gather all the documentation needed by the Clean Energy Council (CEC). Keep in mind, however, that you must apply within 12 months of the installation to be eligible for the solar rebate.
Need more information? Read Small-Scale Technology Certificates: What You Need to Know
How can we help you with STCs?
We are accredited by the Clean Energy Council and every one of Venergy’s installers are CEC approved under the STC program and can claim STCs on your behalf. This means, we can pass the savings faster and directly to you – for no extra fee. By choosing us as your solar installer, you will not need to go through a broker or buyer for your STCs, which can be a lengthy and difficult process for you. But you will need to act quickly! The STC scheme is set to decrease in value again on 1 January 2022.
Did you know? Solar is one of the best home investments you can make. A solar system not only lowers your energy bill and reduces emissions, but it also increases the value of your home. If you decide to sell your property in the future, you will also have increased property value from a solar system by up to 4%.
Got more solar rebates questions? We can help! Get in touch with our friendly solar installers by contacting us on 1800 836 374 today.