How Do Solar Rebates Work and How to Get It

Why do you think Australia is one of the top countries in rooftop solar installations? A significant fall in the prices of solar panels is one of the main reasons, but it wouldn’t be wrong to say that the rebates offered at the federal and state level have also played their part. The rebate or subsidy is designed to cut down a substantial chunk of the installation cost of solar panels.

Many people are surprised to know that the rebate or subsidy isn’t technically a government subsidy. In short, the government does not pay you this money directly. It’s a relatively complicated system and the value of the rebate also varies. This blog post will explore how solar rebates work and how you can get them.

What Are Solar Rebates?

Solar rebates are the financial incentives given at the federal and state level to encourage people to invest in rooftop solar panel installation. These can bring down the cost of solar panel installation by up to a third.

This incentive is designed to lose 1/15 of its value each year starting from 2017 to 2031. In short, the value of the rebate will go down to 0 in 2031. There are certain conditions that need to be met to be eligible for this incentive. These criteria are:

1. Solar PV system up to 100 kW 

2. It should be designed and installed only by a professional accredited by Clean Energy Council

3. Only Clean Energy Council’s approved solar panels and inverters should be used

How the Solar Rebate Financial Incentive Works

Technically, the rebate or subsidy offered by the federal government isn’t a subsidy. The government doesn’t pay the money directly into your pocket. The way the system works is a bit complicated and here is a step-by-step explanation.

Every company that uses fossil fuel for energy is required to invest a certain amount of money towards renewable power. They also have the option of buying renewable energy certificates from other people who have invested in renewable power.

The government creates renewable energy certificates.

Whenever someone buys and installs a rooftop solar power system, a certain number of renewable energy certificates are issued to the buyer depending on certain criteria. These certificates are known as small-scale technology certificates or STCs.

You sell these STCs to the fossil fuel burning utilities in lieu of money.

The value of STC varies depending on demand and availability. The maximum value of an STC can be $40 as per the law but it has been sold for as low as $17.

Your chosen solar panel installer will take care of handling the STCs. They might charge a small fee for their services. The value generated by the STCs is offset right away at the time of estimate.

Broadly, this is how the system works.

An important thing you need to understand is that the value of STC isn’t fixed. The fossil fuel burning companies are required to invest a certain amount each year in renewable energy or buy STCs in lieu of investment in renewable energy. If there are too many solar panel installations in a particular time period, a lot of the STCs are going to be available for sale and that might cause the price to go down. Similarly, prices may also rise if only a limited number of certificates are available for sale.

As explained earlier, the maximum value an STC can reach is $40, as per the law.

In practical terms, it means that the amount of solar rebate available for your installation depends on the price of STC at that particular moment. It could go up or down depending on various factors.

Financial Incentives Offered by the Different Australian States

In addition to the federal incentive, certain incentives are also offered at the state level. Here’s a quick look at the incentives offered by various Australian states:

1. NSW — There are financial incentives to get free 3 kW solar systems for pensioners. They also provide interest-free loans for solar batteries.

2. Victoria — The state offers 3 separate incentives for households that include solar hot water incentive, solar panel incentive and solar battery incentive.

3. South Australia — The state currently offers incentives for home batteries. This is mainly aimed at low-income households.

4. ACT — There is a maximum incentive of $2,500. In addition, some households are also eligible for a discount on the installation of a battery storage unit.

5. Northern Territory – The state currently offers incentives for the installation of batteries and inverters. The maximum amount is set at $6,000.

6. Tasmania — The state does not offer any solar incentives other than the feed-in tariff.

7. Western Australia — There are no solar incentives other than the federal incentive.

8. Queensland — The only available incentives are those offered nationally.

Final Thoughts

Overall, a variety of incentives are available at both the federal and state levels. The only thing you need to do to get this incentive is to use the services of a Clean Energy Council accredited solar panel retailer and installer. An approved retailer will take care of all the paperwork related to small-scale technology certificates and you will get an estimate minus the expected value of STCs.

Switch to Solar Energy!

Solar energy not only helps you save money but also reduces your carbon footprint. Macedon Ranges Solar Power has more than a decade of experience in successful solar power installations. We are accredited and approved by the Clean Energy Council.

If you would like more information about commercial solar panels, have questions, or want a free solar quote get in touch with Macedon Ranges Solar Power we will be more than happy to help.

Please give us a call today on 1300 693 113 or make an enquiry.