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The Solar Rebate: How does it work and how much can you save?

One of the most commonly asked questions we have from potential customers is about the solar rebate or incentive.  There is a lot of confusion about how it works, how much it is worth and how long the scheme will stick around for.

We know one of the key considerations before purchasing solar is about its price, affordability and return on investment for your family or business. The Solar Credits Scheme (or solar rebate or incentive as it is most commonly known), provides an upfront discount to eligible customers, significantly reducing the initial cost of a solar system installation.

According to the Clean Energy Regulator:

“Small-scale Renewable Energy Scheme creates a financial incentive for individuals and small businesses to install eligible small-scale renewable energy systems such as solar panel systems, small-scale wind systems, small-scale hydro systems, solar water heaters and air source heat pumps.

Small-scale technology certificates can be created following the installation of an eligible system, and are calculated by the amount of electricity a system produces or displaces.”

The rebate is known as the Solar Credits Scheme

Commonly referred to as a rebate or incentive program, installing an eligible system allows the creation of small-scale technology certificates (STCs), an electronic form of currency with a value that can be redeemed by selling or assigning them. Most households choose to assign their STCs to their installer for an upfront discount on their system.

Small-Scale Technology Certificates are traded by you or assigned to an installer

As an owner of an eligible system, you can trade certificates yourself and receive ongoing discounts. Other people assign these certificates to a registered installer like Enerwest for an upfront discount off the cost of your system or cash payment (this is at the discretion of the home or business owner).

Renewable Energy Target Liable entities

An individual can create and trade these certificates themselves or assign the certificates to a registered agent in exchange for an upfront discount off the cost of your system or a cash payment. From there, Renewable Energy Target liable entities have a legal obligation to buy and surrender to the Clean Energy Regulator on a quarterly basis.

Small Scale Technology Certificates (STC) and how they work

The number of certificates created is based on a couple of factors, including your system size, how much renewable electricity your system produces or the amount of electricity consumption it reduces.

Your location also plays a part in how many certificates are created. Australia is broken down into zones based upon available sunshine.  Perth is in Zone 3, along with Sydney, Brisbane, Adelaide and Canberra.

The deeming period is the amount of time that the government trading scheme has left to run. The deeming period has a maximum of 14 years to run as of January 2017. This is because current legislation means that the solar rebate will decrease by one fifteenth per year commencing January 2017 until it drops to zero in January 2032. This directly impacts how much you will save off the installation price of your solar power system.

As a formula your STC Entitlement is calculated as follows:

System size          X             Zone Rating Factor             X             Deeming Period  =             STC Entitlement

 

Table of STC subsidies per area

City

Zone

Rating Factor

System Size

Deeming Period

Total STC Entitlement

STC value (fluctuates)

$32

 Total Subsidy

(= STC Entitlement x STC Value)

Perth

3

1.382

3kW

14 Years

58

32

$1856

Darwin

2

1.536

3kW

14 Years

64

32

$2048

Sydney

3

1.382

3kW

14 Years

58

32

$1856

Canberra

3

1.382

3kW

14 Years

58

32

$1856

Brisbane

3

1.382

3kW

14 Years

58

32

$1856

Adelaide

3

1.382

3kW

14 Years

58

32

$1856

Melbourne

4

1.185

3kW

14 Years

49

32

$1586

Hobart

4

1.185

3kW

14 Years

49

32

$1586

Source: CEC

Note:  The STC value of $32 used in the table above is an estimate as the rate does vary and is influenced by various industry factors. You can find the current rate at the Renewable Energy Traders website.

Making the most of your STC rebate and system performance

Your system performance (and therefore your STC rebate) is influenced by the total amount of panels on your roof, rather than the size of your inverter.

This is important to know because Australian Standards allow for the amount of output on your roof to be up to 30% higher than the output of your inverter (e.g. 3kW system x 30% = 3.9kW, so you can have 3.9 kW on your roof). This additional 30% is allowed under Australian Standards to account of system inefficiency’s such as shading, system loses and panel orientation.

If you had the roof space to accommodate additional panels to make up the 3.9kW then your STC Subside would look like this:

City

Zone

Rating Factor

System Size

Deeming Period

Total STC Entitlement

STC value (fluctuates)

$32

Total Subsidy

(= STC Entitlement x STC Value)

Perth

3

1.382

3.9kW

14 Years

75

32

$2400

 

So $2400 in your pocket is better than $1856 but it must also be considered there will be an additional installation and panel expense involved with installing the 3 or 4 additional panels required to get to this output.

The upside of installing an additional 30% of panel output is that in makes the inverter work to its capacity more often which means more kWh for you to use before you need to rely on the grid.

So how much will you end up saving?

*Prices are indicative only and subject to change.

  • Between $1500 – $3900 on installation, depending on the size of your system. This range can fluctuate, depending on the STC value.
  • Estimated annual electricity savings in Perth: $1,504 – $1,768 per year!

If you are thinking about installing solar power system at your home or business ahead of summer, now is a great time to contact Enerwest arrange a hassle free, no obligation quote!

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