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The Solar Rebate (AKA STCs)

Reducing the upfront cost of solar power systems

Despite what you may have heard about "the solar rebate ending" on 31 December 2012, there is still a pretty generous solar rebate to be had from the Australian federal government.

Just to make things confusing, this latest solar subsidy for anyone buying a solar system of up to 100kW is called the STC program. Which stands for Small-scale Technology Certificate. Some people in the solar industry (that take themselves far too seriously) insist that this should not be called a "solar rebate", but a "Point of sale payment on capital cost". Hmmm... I think I'll stick to calling it a Solar Rebate. Bloody bureaucrats!

The solar rebate subsidises the upfront cost of installing a Solar Power System and is not means tested in any way. The only criteria for claiming it are:

1) Your system is less than 100kW in size.

2) You get it installed and designed by an accredited professional.

3) You use panels and inverters that are approved for use in Australia by the Clean Energy Council.

Note: Do not confuse this rebate with the Feed In Tariff (FiT). The FiT is a State Government subsidy in which some states pay you for the electricity that your solar system will export to the grid.

How the Solar Rebate Works.

(If you want to skip the nuts and bolts of how it works and just find out how much cold hard cash you can claim, then feel free to skip this section and scroll straight down to "What is the rebate worth to me?".)

The feds have cleverly designed the rebate to actually cost the government very little. Sneaky eh?

Here's the ~~scam~~ scheme in a (8 part!) nutshell:

1) The government creates pieces of paper call Renewable Energy Credits (RECS).

2) The government mandates that the fossil fuelled generators have to either build a certain amount of renewable generation (wind/solar) or buy the right to other people's renewable energy systems in the form of RECs.

3) When you go and buy a solar power system for your roof, the government gives you a certain number of RECS depending on how big your system is and how much sun your part of Australia gets.

4) The special type of RECs that you get for a residential solar system are called "Small Scale Technology Certificates" (STCs).

5) You (or more likely your installer) sell the STCs to the fossil fuel generators and use the cash to offset the upfront cost of the solar system purchase.

6) The STC price is a bit like a share price - it fluctuates on the open market depending on supply and demand. E.g. when the solar industry is booming (usually just before the rebate is cut!) then the STC price drops and vice versa.

7) The current STC price at time of writing is about $36. You can see the current market price of a STC here. Look for the number in the box in the top RH corner labeled: STC.

8) Almost all solar system prices you see advertised will already have the solar rebate included in the pricing.

Simple eh?

What is the rebate worth to me?

What you really want to know, I'm guessing, is:

a) How much can I get off the price of a solar system?

b) How much is a solar system gonna cost me now?

The short answer is:

If you want a 1.5kW system then you can get approx $1000 off.

(If you are confused by this talk of kW's then there is a good explanation here)

So how much does this mean you will have to pay for a solar PV system?

Here are some ballpark figures for costs. They will vary by a few thousand either way depending on the brand of panels and inverters each supplier uses, and their overheads, but if these prices are way out of your expectations, then solar may not be for you right now (although adding the system cost to your mortgage can be surprisingly affordable if you take rising electricity costs into account - there is a solar payback calculator here for you to make your own mind up).

Typical cost of an installed 1.5kW solar system:	$4,500
Government Solar Rebate:	$1,000
Cost to you for 1.5KW of solar power:	Approx $3,500

If you are interested in the financial payback of a system like the 1.5kW system above, then there are some solar payback calculators here that take into account rising electricity prices and your state's Feed In Tariff.

Other Things You Should Know

1) The amount of solar rebate that you can claim depends on where you live:

The lower the number the more cash you get!

Here are some examples for the STC value for a 1.5kW system based on a $31 STC price:

Zone 1: rebate = $2232
Zone 2: rebate = $2139
Zone 3: rebate = $1922
Zone 4: rebate = $1643

2) A good solar installer will guarantee the value of your Solar Rebate subsidy when you sign up for a system and handle the paperwork for you. I wrote an entire blog post explaining this process here.

3) A common trick by a small number of unscrupulous companies is the "Inflated STC Price Scam"