Rebates through the Federal Government Solar Credit Scheme

Estimating your solar rebate under the Solar Credits scheme

To provide cash incentives for property owners to switch to solar energy, the Federal Government has implemented the Enhanced Renewable Energy Target. Under this scheme, the approximate solar rebates afforded to those who install residential solar power systems are as follows:

Solar Credits: Renewable Energy Certificates/Small-scale Technology Certificates (RECs/STCs) of up to $3,000 for a 1.5kW system

Solar Credits: Renewable Energy Certificates/Small-scale Technology Certificates (RECs/STCs) for 1.5kW to 100kW installations

Don't forget that there are also state-by-state solar feed-in tariff incentive schemes on top of the federal rebate that you might be eligible for.

Solar Credit scheme from 1 July 2011

The Federal government's previous $8000 solar rebate scheme has been replaced by the Solar Credits scheme, which commenced on 10 June 2009. The scheme has since undergone several alterations.

The Solar Credits scheme is available for all grid connected solar systems, whether principal place of residence, rental, holiday home, commercial premises or rural construction. The Solar Credits scheme has no means test; the former solar rebate threshold of a household taxable income of $100,000 has been abolished.

Back to top

3x REC multiplier applicable to first 1.5kW of solar power systems

In replacing the $8,000 solar rebate in 2009, the Solar Credits scheme currently operates by attributing a value of 3 times the market value of Renewable Energy Certificates (RECs/STCs, see below) for the first 1.5 kilowatts of capacity. (Read about the REC/STC multiplier.)

There are 31 RECs attached to a 1.5kW solar energy installation in Zone 3 (which covers most of Australia's population; see image below). The value of a REC is subject to market variation (see the current REC/STC price). If the REC price is (for example) $30, the total rebate equates to (31 RECs X $30) = $930 value in RECs for a 1.5kW installation. Under the Solar Credits Scheme, this figure is multiplied by 3, to give a total discount of $2,790.

Keep in mind that Solar Credits apply only to the first 1.5 kW of capacity installed. For systems above 1.5 kW, customers will be eligible firstly for the rebate described above for the first 1.5kW, as well as eligible for the standard 1:1 rate for RECs/STCs for each unit of capacity on top of that. Simply put, the REC/STC multiplier subsidises smaller systems more heavily, but even larger systems are subsidised significantly.

Customers can elect to either assign certificates to the installer in order to keep the upfront cost of the solar installation down, or hold on to them just as you would a share portfolio, to be traded when the market offers a better price.

Further reading:

More about STC/REC pricing.

Solar Choice Blog

Back to top