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Solar Credits - The Federal Solar Power Rebate

Solar Credits Explained

"Solar Credits" is the name given to the Australian government's latest solar subsidy for homeowners, businesses and community groups. It was passed into law on 20th August 2009, but the pollies keep changing the details of the rebate (usually reducing it with very little notice!).

It subsides the cost of installing a Solar Power System and unlike the scheme before it (which was means-tested at a household income of $100,000) this subsidy is not means tested in any way.

It is the latest in a long list of different schemes, which seem to change more often than Julia Gillard changes her hairdo.

How the Solar Credits Scheme Works.

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 1.5kW or more then you can get approx $3,000 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:	$6,500
Government Rebate:	$3,000
Cost to you for 1.5KW of solar power:	Approx $3,500

As you can see, the way the Solar Credits work, the 1.5kW system is actually much better value. You are getting 50% more electricity for only about a 20% greater cost.

The Solar Credits scheme maxes out at 1.5kW.

That means that if you want a system bigger than 1.5kW, your extra panels are still subsidised, but the rebate is much less generous for those extra panels.

For systems larger than 1.5kW you will still get your $3,000 for the first 1.5kW, but your rebate for every extra kW added will only be about $500 per extra kW.

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.

Some of the Solar Credits Small Print

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

The lower the number the more cash you get!

Here are some approximate examples for the Solar Credits for a 1.5kW system:

Zone 1: rebate = $2,500
Zone 2: rebate = $2,370
Zone 3: rebate = $2,200
Zone 4: rebate = $1,800

2) The dollar amount of solar credits that you can claim will depend on the phase of the moon

Not really. But the amount you can claim will change on a day to day basis based on the market price for things called Small-scale Technology Certificates (STCs). STCs are a special type of Renewable Energy Certificate (REC) specifically for small scale (e.g. residential) solar.

STCs are the pieces of paper that your solar installer (or you if you choose) can sell to get the cash for your solar credits. The dollar figures above are based on a price of $23 per STC.

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.

A good solar installer will guarantee the value of your Solar Credit subsidy when you sign up for a system and handle the paperwork for you.

3) No Double Dipping!

If you claimed the previous rebate (before 10 June 2009), you can't claim solar credits to extend your system.

4) The government says the new scheme will stay the same until Jun 30 2012.

And they never break their promises do they?

The current promise after Jun 30 2012 is this:

From July 1 2012 the rebate will be reduced by 33%.

From Jul 1 2013 there will be no rebate.

They are banking on the price of panels coming down so much that no one will need a rebate by then...

My Advice: Get 3 quotes now, so you can claim the current rebate before the pollies do yet another backflip...