Solar Rebates in Australia

Information verified correct on December 3rd, 2016

To encourage more people to install solar panels as an alternative energy source, the government offers significant rebates to qualifying homeowners. Learn about what you may be entitled to.

The credit amount refunded depends on the size of the solar unit and the location of the home or business, but is very much worthwhile for those who make the move to solar energy.

The promise of a rebate has attracted many people to take up solar power in the past few years, but as can happen with matters handled by government, changes are bound to happen. This is why it's so important to regularly check resources like this if solar energy is something you're interested in investing in.

Residential rebates

Solar Rebate House

Small-Scale Technology Certificates

The federal government currently offers Small-Scale Technology Certificates, or STCs, to reward homeowners who use renewable sources. When homeowners invest in an eligible solar power system, wind power unit or solar hot water device, they will receive STCs based upon the size of the energy efficient system and their location. These STCs are then sold to those who generate electricity through fossil fuels, either through you or your solar panel installer and are used to offset the price of your solar panel installation. STC prices can fluctuate depending on the market—the more there are the less you'll receive.

The number of STCs you can receive depend on where you live and which zone that falls into. There are four zones. The lower your zone number, the more sunshine you receive and therefore the more you can claim. For example, zone 4 is comprised of areas of Australia which receive the least sunshine such as Melbourne and Tasmania.

According to AGL Solar Energy, a 1.5 KiloWatt (kW) system in Melbourne would receive 26.6 STCs for installing their system.

At the time of writing STCs are being traded at a spot price of $38.05, which means an offset of $1012.13. According to SolarQuotes.com.au, a 1.5 kW system might cost approximately $4,500, so this is a significant saving.

The last things to remember about this incentive is that systems must be less than 100 kW in size, use approved solar PV panels and the system must be installed by an approved professional.

Installation of slar panels

Feed-in tariffs

Homeowners may also qualify for a feed-in tariff, which is a sum your state government forces electricity companies to pay you for electricity fed back into the grid. The government establishes the amount based on each KiloWatt per hour (kWh) a homeowner's solar system feeds back into the electricity grid. However, the amount will vary according to the energy provider and the state. In addition, the program permits homeowners to receive their credit through gross or net metering.

With gross metering, all of the solar electricity a home's system generates is sent into the grid. The homeowner receives reimbursement based on every kWh of solar electricity their system produces.

Net metering, the homeowner receives funds according to the difference between the home's usage and the solar electricity produced.

The amount of time it takes for a solar system to pay for the homeowner's initial investment is based upon the size of the unit, the home's consumption requirements and patterns and how the homeowner paid for the system. Weather patterns and the feed-in tariff eligibility can also affect the time it takes the homeowner to recoup his or her initial system expense.

Commercial rebates

When business owners install a grid connect solar power system, they can obtain considerable savings through the country's solar credit discount, which offers them an upfront refund. Under the program, small businesses with an annual turnover of less than $2 million are eligible for a $6,500 tax break which includes solar power systems.

Similar to residential solar systems, businesses can also sell STCs to offset the costs of establishing their systems and make use of feed-in tariffs to reduce their electricity bills or even create surplus energy.

What to avoid when seeking solar rebates

Be careful when obtaining quotes for a solar panel system. Many companies will work the rebate into their final price, which can be a good thing if they're a good company, but a bad thing if they're unscrupulous.

One crucial question to ask the quoting professional is what STC price has been used in the quote. Many times a quote will include a high STC price, but as mentioned above, this price might fluctuate. If a quote includes a rebate using an STC price of $40, but the current market price is actually only $25, you'll be hit with a much larger bill once your installation is completed.

Regardless of this, solar panel installation can be a good money saver. Even in the winter, Australia receives an excessive amount of insolation – about 4kWh of sunlight exposure per square metre each day, with the northern regions receiving an estimated 6 kWh of insolation per day. Our country's sunlight exposure levels greatly surpass the normal levels recorded in North America, Russia and Europe, so why not take advantage of it?


Information on solar power

Marc Terrano

A passionate publisher who loves to tell a story. Learning and teaching personal finance is his main lot at finder.com.au. Talk to him to find out more about home loans.

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