As well as the environmental benefits, the potential to save money is a big incentive for adding solar power to your home or office. For starters, powering some or all of a property with solar gives you a way to save on your electricity bills.
But beyond that, you could also be eligible for government rebates and other financial incentives that help make solar more cost-effective. So, let's take a look at what's on offer.
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Three rebates available if you have solar panels
There are three ways you can get money back after installing solar panels:
- Small-scale technology certificates (STCs) are offered by the federal government and can be sold, either through the STC clearing house for a fixed price or on the open market.
- State issued solar rebates and incentives operate on top of federal benefits.
- Feed-in tariffs are 'refunds' you get for sending excess energy back to the grid.
What are small-scale technology certificates (STCs)?
The federal government currently offers small-scale technology certificates (STCs) to homeowners and small business owners who invest in solar panels or solar hot water systems.
- To be eligible, your system must be less than 100kW in size, use approved solar PV panels and be installed by an approved professional.
- STCs are also available for eligible wind turbines, hydro systems and air source heat pumps.
How much are STCs worth?
The amount you'll get for STCs depends on how they're sold.
- If sold through the STC clearing house, you'll get a fixed price of $40 (excluding GST) for each STC.
- If sold through the open market, you could get a higher or lower price depending on market demand.
How many STCs will I get?
This depends on where you live, the installation date and the amount of electricity the system is expected to generate over a set period of time, known as the "deeming period".
- You'll get one STC for each megawatt hour of electricity that's generated or displaced by the system during your deeming period.
- You can use the government's STC calculator to get an estimate of the certificates you could earn from your solar system.
If you installed a 2kW solar system in Melbourne and set a deeming period of 5 years, you'd get 11 STCs. If you installed the same system in Darwin (which gets more sun) over the same time, you'd get 15 STCs. Based on the STC clearing house price of $40 per certificate, that adds up to $440 in Melbourne or $600 in Darwin.
You can get paid back for 'excess' energy you produce and send back to the grid. This is known as a feed-in tariff (FiT).
How much will I get paid?
This amount you're paid is measured in cents per kilowatts per hour of electricity you generate (c/kWh).
This rate is set by either your state government or your retailer. The potential return from FiTs depends on how much (or little) electricity you use.
There are two main options:
- Gross FiTs feed all the energy you produce back into the grid and pays you for it. You then pay for any electricity you use.
- Net FiTs only feed the extra energy generated by your solar system to the grid. This means your solar system will help reduce your overall electricity bills.
How long will it take for my solar system to pay off?
Finder research shows it takes around 4-7 years
. This time varies depending on the
- Size of your solar installation
- Your home's power requirements
- How much the system costs to install
- The number of rebates or other benefits you receive
Weather patterns and feed-in tariff eligibility can also affect the time it takes for you to make back the money you spent on the system.
Compare better: You can speak to a solar broker who can help you calculate your payback period and offer detailed advice.
State government solar rebates and incentives
You may be eligible for rebates or other financial incentives offered by your state government. Most apply limits on incomes. Here's what each state offers.
Empowering Homes solar battery loan
- How does it work? Households in regional areas can apply for loans to install a solar panel and battery system, or add a battery to existing solar panels.
- How much do I get? Up to $14,000 is available for solar PV and battery systems, repayable over up to 8 years. Up to $9,000 is available for adding a battery to an existing system, repayable over up to 10 years. You must own your home and your total taxable income must be under $180,000 to apply. You must be living in an eligible postcode; Sydney and most larger cities don't qualify.
- Where can I find out more? Check out the full conditions on the Energy NSW site.
Solar for low income households
- How does it work? The scheme provides free solar panel installation. Only 3,000 low-income households will be given free installations.
- How much do I get? To take part, you'll need to be currently receiving the Low Income Household Rebate, have Pensioner Concession Card or Department of Veterans' Affairs Gold Card, live in one of five eligible greater Sydney suburbs, and own your own home.
- Where can I find out more? Energy NSW has complete details on eligibility.
Solar Panel Rebate
- How does it work? Eligible homeowners can get a rebate on the cost of installing new solar panels, as well as an interest-free loan. The scheme runs until 30 June 2021. Only a limited number of rebates are available.
- How much do I get? The rebate is capped at $1,850. The interest-free loan is for the same amount as the rebate, and must be paid off within 4 years. To qualify, you must be an owner-occupier with a home valued at under $3 million, have a taxable income of under $180,000 a year, and not already have solar panels in place. (A similar scheme is also available for landlords.)
- Where can I find out more? The Solar Victoria site has full details of the scheme.
Solar Battery Rebate
- How does it work? Eligible homeowners can get a rebate on the cost of adding battery storage to existing solar panel installations. The scheme runs until 30 June 2021. Only a limited number of rebates are available.
- How much do I get? The rebate is capped at $4,174. To qualify, you must be an owner-occupier with a home valued at under $3 million, and have a taxable income of under $180,000 a year. You'll need to be installing a pre-approved battery model and meet other safety criteria.
- Where can I find out more? The Solar Victoria site has full eligibility details.
Solar Hot Water Rebate
- How does it work? Eligible homeowners can get a rebate on the cost of installing a solar hot water system.
- How much do I get? The rebate is capped at $1,00. To qualify, you must be an owner-occupier with a home valued at under $3 million, have a taxable income of under $180,000 a year, and be replacing a system that's at least 3 years old. You can't receive this rebate if you've received the solar panel or solar battery rebate.
- Where can I find out more? The Solar Victoria site has full eligibility details.
Queensland has previously offered interest-free loans for solar installation, but doesn't have any active state schemes as of 2021.
Western Australia doesn't have any active state schemes as of 2021.
South Australian Home Battery Scheme
- How does it work? The scheme offers a subsidy for installing home batteries for storing solar power in new builds and existing homes. You have to apply through your battery provider.
- How much do I get? The rebate is $200 per kWh, with a maximum subsidy of $3,000. Energy concession holders get $300 per kWh. Battery installation must be completed within 6 months for existing homes, or 12 months for new builds.
- Where can I find out more? There are full details on the scheme site.
Tasmania doesn't have any active state schemes as of 2021.
Australian Capital Territory
The Solar for Low Income Program
- How does it work? The Solar for Low Income Program offers a subsidy towards the cost of installing a new rooftop solar PV system. It's only available to homeowners who hold an Australian Government Pensioner Concession Card.
- How much do I get? You can get a subsidy of up to 50% of the total installation cost. You can also get a 3-year interest-free loan to pay off the rest of the cost.
- Where can I find out more? Check to see if you qualify.
Next Generation Energy Storage Grants
- How does it work? Next Generation Energy Storage Grants offers a rebate when you install a battery storage unit for a rooftop solar PV system from an eligible provider. The solar system can be new or existing, and the grant is available for both homes and businesses.
- How much do I get? The value of the grant varies depending on factors including the size of the system and the installer.
- Where can I find out more? There are full details on the Actsmart site.
Home and Business Battery Scheme
- How does it work? All Territory residents can apply for a grant to help fund battery installation for solar systems.
- How much do I get? The grant is $6,000. You must be the owner of the property and installing either a full solar PV system or adding a battery to an existing system.
- Where can I find out more? The application process is detailed on the NT Government site.
Full guide to energy rebates and concessions across Australia
Watch out! Savings are often included in quoted costs
Getting a quote for a solar system? Be aware that many companies will factor in rebates before quoting the final price. This is particularly common with STCs, but can happen with other rebates.
When comparing costs, make sure you ask the following questions:
- What is the actual up-front cost you'll pay?
- What price has been assumed for STCs? Remember, STCs are based on assumed output. They're not guaranteed.
- Have any other rebates or finance options been included in the quote? If they have, remember you might have to apply for them yourself.
Get more: If you're a small business owner, you may be able to claim some of the installation costs against tax. Check with your accountant.