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Everything You Need to Know About Solar Rebates in Australia

Solar Rebate, officially known as the STC Program, is an excellent initiative by the Australian government to reduce solar installation costs.

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Solar rebates in 2024 are a very popular topic to discuss. 

A solar rebate program is a government incentive to promote solar energy systems.

Any solar system installed by an accredited installer from Jan 2024 till 31st December 2024, will be eligible for the STC Program. The STC program price given by the federal government is about  $40 (excluding GST), which is fixed. Let’s make it easy to understand that the subsidy provided by the Federal government is $350 Per kilowatt (kW) installed, so if you have installed 6.6kW, then $ 350* 6.6= $ 2310. So, all around, you will get Somewhere around $2310 as a subsidy, which the seller already calculates, and the final quote price of a solar system given to you by them is the price after the STC rebate.

What are STCs?

STCs are Small-scale Technology Certificates generated after PV Solar system installation  (with a solar panel capacity under 100 kW). You can trade these certificates with your solar system retailer or any reputable installer so they can reduce the installation cost by deducting the amount worth STC from the total installation cost. The number of STCs created depends on the system’s size and location. 

How to claim small-scale technology certificates:

Small-scale technology certificates (STCs) are tradable. You can trade STC certificates like vouchers. You can create, trade, sell, or assign them as needed or preferred. You will own STCs and choose how to deal with them. You can sell them on your own or let a registered agent handle them for you. In return, you can get a discount on your system upfront or even a cash payment.

There are two options To claim small-scale technology certificates (STCs) based on your preference and convenience:

1. Assigning to a Registered Seller or Retailer:

  • Assign the right to create and trade STCs at the point of sale to a registered agent, such as a retailer or solar installer. This is a common choice for most system owners.
  • The upfront financial incentive you receive is typically based on the market price of the STCs at the time of installation, which can fluctuate in the future due to supply and demand.
  • Assigning the right to create and trade STCs to a registered agent is often simpler and faster than trading the certificates independently through the open market or the STC clearing house.
  • Sellers and retailers have an experienced team to handle this procedure on your behalf. 

2. Claiming STC Yourself:

If you prefer, you can create and trade the STCs yourself. Here’s how:

  • Check Your Eligibility First: Determine if your small-scale renewable energy system is eligible for STCs. It must:
    • Apply within 12 months of installation.
    • Check if the panels and inverter you have installed are listed on the Clean Energy Council’s approved components list.
    • Installation has to be done by a Registered Installer Listed on CEC approved Installers list.
  • Quantity Calculation: Calculate the quantity of STCs to claim for your system.
  • Compliance Paperwork: Obtain and complete the appropriate compliance paperwork.
  • Create REC Registry Account: Create an account in the REC Registry, verify your identity, and undergo an assessment as a fit and proper person.
  • Create STCs: Within 12 months of installation, create the STCs in the REC Registry.
  • Validation: Wait for the STCs to be validated by the Clean Energy Regulator.
  • Sale: Find a buyer for the STCs or place them in the STC clearing house queue for purchase. The time for STCs to sell in the STC clearing house varies based on buyer availability. 

Whether you assign them to an agent or handle them yourself, STCs are crucial in promoting renewable energy adoption!

What is the current STC rebate Price?

After accounting for fees, the solar rebate value currently stands at approximately $36 per Small-scale Technology Certificate (STC), offering a rebate of about $350 for every kilowatt (kW) installed. However, because STCs are generally traded on an open market, their value is subject to change due to market fluctuations. Historically, the price of an STC has dropped as low as $16 per certificate. As of the latest update, the price was $37 per certificate. This variability underscores the importance of staying informed about the current market prices and recent trends in STC values.

Geographical Location Impact on STC

Geographical locations play a vital role in influencing STC. The value and availability of STCs can vary based on geographical location. Here’s a look at how geographic location influences STCs:

  • Solar Insolation: In Australia, we receive varying amounts of sunlight in different areas. STCs are often more valuable in regions with higher solar exposure because the potential for solar energy production is more significant. For example, Darwin and Perth can generate more electricity than places with less solar insolation, like Hobart. Areas with more sunshine hours can generate more electricity from the same solar system than less sunny areas, making solar installations more beneficial and influencing the number of STCs that can be created.
  • Government Policies and Incentives: Government policies and incentives can significantly influence the STC market. Certain regions may provide extra rebates or support for solar installations, impacting STC demand. Such policies can lead to more installations, affecting STC supply and pricing.
  • Market Fluctuations and Geographic Influence: Since these STCs are traded in the open market, prices can fluctuate based on supply and demand and, hence, be influenced by local market factors.
  • Zone System: Australia is divided into four zones to accommodate these differences. Each zone has a designated multiplier that influences the number of STCs awarded. Like Zone 1, it receives a higher multiplier, generating more STCs for the same system compared to areas in Zone 4 with less solar potential.

Each zone in Australia has a specific rating that affects the calculation:

Here’s the table for the zone ratings:

Zone

Rating

Zone 1

1.622

Zone 2

1.536

Zone 3

1.382

Zone 4

1.185

How STC is calculated:

Let’s learn how Small-scale Technology Certificates (STCs) are computed in different zones in Australia. I’ll break it down step by step

Formula to calculate STC

To calculate STCs, we need System size in kW,  Zone Rating, and Deeming Period in years(Current STC Multiplier for 2024)

Formula

     
 

Max. no STC Eligible =

(Plant Capacity in Watts x Zone Rating x Current STC Multiplier for 2024)

 

1000

      
 

Max Solar Rebate =

Max. no STC Eligible x Max price per STC

   
      
      

Example

For 10kw solar plant in Sydney(2147)

  
      
 

Max no STC Eligible =

10000 x 1.382 x 7

   
  

1000

   
      
 

=

96.74

   
      
 

Max Solar Rebate =

96.74 x (38 AUD)

   
 

=

3648

   
      
      
  • For example, let’s consider a 10 kW solar plant in Sydney (postcode 2147):
    • System capacity: 10,000 watts (10 kW)
    • Zone rating (Zone 3): 1.382
    • Deeming period (e.g., 7 years)
  • Calculate:
    • Max. no STC Eligible = 10,000 × 1.382 × 7 / 1000 = 96.74
    • Round down to the nearest whole number: 96 STCs
  • Maximum Solar Rebate:
    • Multiply the number of STCs by the maximum price per STC (e.g., $38):
      • Max Solar Rebate = 96 STCs × $38 = $3,648 AUD
  • Final Notes:
    • The actual number of STCs created for your system may differ slightly due to specific factors.
    • Always consult a local installer or use online calculators to get precise results for your area.

Remember, these calculations provide an estimate, and actual values may vary based on specific circumstances. Installing solar panels benefits the environment and helps reduce your energy bills!

Eligibility criteria for STC Rebates(Solar Rebate):

Australia is making significant strides in promoting renewable energy adoption, and one key incentive for homeowners and small businesses is the solar rebate. In 2024, several programs will be available to encourage installing solar panel systems, batteries, and other renewable energy systems. Remember, to claim Small-scale Technology Certificates (STCs) for your solar system, you must fulfil some essential criteria:

  1.  Your solar power system must be smaller than 100kW, which is okay because it covers most residential and small business installations.
  2. A Clean Energy Council accreditation professional must install and design your system. It ensures your solar system meets high quality and safety standards.
  3. The solar panels and inverters used in installation must be on the Clean Energy Council’s list of approved products. It guarantees they’re suitable and reliable for use in Australia.
  4. STCs Should be generated within a year of installation (Within 12 months).
  5. You should be the property owner where the solar system is installed.
  6. The property is located in Australia.

Other projects can also qualify for STCs as long as the overall system capacity stays below 100kW. The following are examples.

  • Adding or enhancing capacity,
  • Setting up a new, separate system, and
  • Substituting an existing system.

Let’s explore the details of these rebates and how they can benefit you.

Types of Solar Rebates in Australia:

  • Small-scale Renewable Energy Scheme (SRES): This federal program provides a rebate based on the number of small-scale technology certificates (STCs) your solar system generates. The system size, location, and type of panels determine the number of STCs.
  • State and Territory Rebates: Many states and territories offer additional rebates on top of the SRES scheme. These solar rebates can vary depending on location, state, and system size. These rebates can be in cash payment, discounts on solar system prices, or interest-free loans.
Small-scale Renewable Energy Scheme (SRES)

The SRES (Small-scale Renewable Energy Scheme) is a federal government initiative to encourage solar installation and to reduce the upfront final cost of installing solar panels. Here are the key points:

  1. Eligibility: Homeowners and small businesses that install a small-scale renewable energy system (such as solar photovoltaic panels, solar water heaters, or air source heat pumps) may be eligible for this rebate.
  2. Benefit: The SRES provides an installed subsidy of approximately $350 per kilowatt (kW). Suppose you install a solar system of about 5 kW. You could receive a rebate of around $1,750.
  3. Creation of Small-scale Technology Certificates (STCs): When you install an eligible system, you create STCs. The number of STCs depends on the amount of renewable electricity the system produces and the climate region where it’s installed.
  4. Options for Benefit:
    • Assigning STCs: You can assign the STCs to an installer, retailer or agent (usually the system installer or retailer) in exchange for a discounted or delayed price or cash payment.
    • Selling STCs: Alternatively, you can sell the certificates yourself. You have two options:
      • Through the open STCs market (pricing subject to market forces).
      • Through the STC Clearing House at a fixed price of $40 per STC (excluding GST).
  5. Claiming the Rebate:
    • When you install a solar system, the installer will help you create and manage the STCs.
    • The rebate amount is deducted from the upfront cost of your solar installation.
  6. STC Regulated By:
    • Administered by: Clean Energy Regulator
    • Website: Clean Energy Regulator
    • Email: enquiries@cleanenergyregulator.gov.au
    • Phone: 1300 553 542

Remember, STCs make solar energy more accessible and affordable for Australian households and businesses. Understanding STCs is essential if you’re considering going solar.

Home Energy Support Program

Apart from the SRES, the Home Energy Support Program provides additional rebates for eligible homeowners. Under this program, eligible homeowners can get support up to $5000, with the upfront cost discounted from the system’s installation cost. These rebates are divided into two parts. 

  1. For solar rooftops, the rebate is 50% of the total installation cost, which is up to $2500.
  2. And a 50% rebate of the total cost of installation up to $2500 for below-sustainable installation
  • Water heater pumps.
  • Reverse Cycle heating and cooling.
  • Electric ovens and stovetops.
  • Ceiling Installations.

 

To qualify for a rebate, applicants must meet the following criteria:

  • Reside within the Australian Capital Territory (ACT).
  • To get benefits and discounts, you need specific government-issued cards: an Australian Government Pensioner Concession Card for pensioners, a Department of Veterans Affairs Gold Card for veterans, or an Australian Government Health Care Card for low-income earners. Check eligibility and apply if you qualify.
  • Own and occupy the residence where the product is to be installed.
  • Complete a free online Everyday Climate Choices workshop, which guides applying for the rebate and making informed choices.
  • The property must have an Unimproved Value (UV) of:
    • Up to $750,000 for standalone homes/units and dual occupancies as of 2024. It is calculated based on the unit entitlement percentage for freestanding properties with unit titles.
    • Up to $300,000 for unit-titled multi-story apartments as of 2024.

What is the deeming period?

The deeming period in Australia is the fixed time frame during which eligible solar power systems generate Small-scale Technology Certificates (STCs). STCs are produced based on the system’s capacity and location. Here are a few crucial points to keep in mind about the deeming period:

  •  The standard deeming period for solar power systems is 15 years.
  •  During this time, the system accumulates STCs based on their size and the applicable zone rating.
  •  The solar system will not generate additional STCs after the deeming period expires.

To summarise, the deeming period determines how long your solar system will be eligible to generate STCs, contributing to the financial incentives for adopting renewable energy. However, regulations and policies may differ based on your specific situation. Therefore, it is crucial to consult with local authorities or professionals for accurate information.

Australian solar rebates are decreasing every year and will end in 2030.

Yes, Solar rebates are decreasing every year, and they will eventually end in 2030. Solar rebate programs are initiatives that promote the use of solar power by providing financial incentives to those who adopt it. These programs have been widely implemented as part of renewable energy policies across the globe and have a important role in encouraging the widespread adoption of solar energy.

Beginning of Solar Rebates- How does it start?

The story began in 2001 when the Australian government announced the Small-scale Renewable Energy Scheme (SRES). Many of these programs started in the late 2000s and early 2010s, aiming to make solar installations more affordable and boost the solar industry’s growth.

Year-by-Year Decline

  • 2017: The journey of rebate reduction commenced. Every January 1, the value of STCs decreased by approximately 4-5%.
  • 2022: Eligible solar systems installed this year qualified for a maximum of 9 years of STCs.
  • 2023: The gradual reduction continued, with a maximum deeming period of 7 years for systems installed this year.
  • 2030: The final chapter. On December 31, the SRES will conclude, and the solar rebate will cease.

Understanding the Solar Rebate Phase-Out

Solar rebates are being phased out as renewable energy becomes self-sustaining and market-driven. They were initially necessary to encourage solar power adoption. Technological advancements and increased competition have lowered solar installation costs. Thus, the need for substantial incentives has declined, leading to a gradual rebate withdrawal.

The Impact on Prospective Solar Adopters

Act now on solar energy to take advantage of current rebates. Waiting will mean higher upfront costs as rebates decrease yearly, potentially limiting accessibility for some.

The Road Ahead

The solar rebates in 2024 are still significant but have decreased by around 7% compared to 2023, and this trend is expected to continue annually.

  • 1. 2024 Outlook
    • As of 2024, solar rebates continue to decline.
    • Homeowners and businesses must act promptly to take advantage of available incentives.
    • Research the latest rebate updates specific to your state.
  • Beyond 2024
    • The government’s commitment to renewable energy remains strong.
    • While rebates may decrease, solar energy remains a wise investment.
    • Consistent Innovations in inverter and battery storage and grid integration will shape the future.

So, Should You Make the Switch Now?

Here’s why going solar in 2024 might be a smart move:

  • Maximise Your Rebate: If you install a solar system now, you’ll receive a higher rebate than if you had waited a few years. If you wait, you will lose the maximum rebate you can get now.
  • Long-Term Savings: Solar panels can reduce electricity bills for years, making the investment worthwhile even after rebates.

Considering the Future of Solar

The phase-out of solar rebates reflects solar technology’s growing affordability and competitiveness. While the upfront cost might seem daunting, remember the long-term financial and environmental benefits.

Conclusion

Australia’s solar rebate programs make transitioning to renewable energy more accessible and affordable. Whether considering solar panels for your home or business, take advantage of these incentives to contribute to a cleaner and more sustainable future.

Remember to check official sources and seek professional solar expert advice before deciding on solar installations.

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