How the new Solar Credit scheme operates (from 10 June 09)

(Some of the information in this entry is out of date: please refer to this newer entry for up-to-date information on RECs multipliers).

While the Federal Government created œsolar chaos yesterday by calling off the popular $8k solar rebate three weeks early – with less than eight hours notice – the new Solar Credits scheme has at least been brought forward and commences today, 10 June 2009.

Full details will be provided when the legislation is tabled in Federal parliament next week. It will be backdated to apply to all eligible installations from today onwards.

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

In replacing the $8,000 rebate, the Solar Credits scheme operates by attributing a value 5 times the market value of Renewable Energy Certificates (RECs).

RECs commenced nationally in December 2001, and are designed to place a value on the displacement of greenhouse gases. One REC is equivalent to approximately one tonne of abated greenhouse emmissions. They provide financial incentive to place less reliance on the burning of fossil fuel.

There are 21 RECs attached to a 1kW solar energy installation. The value of a REC is subject to market variation, though the price has been static for some time. Green Bank has been buying RECs for many months at $46 each. This equates to $966 value in RECs for a 1kW installation. Under Solar Credits, this figure is multiplied by five, to give a total discount of $4,830.

Solar Credits will apply to the first 1.5 kW of capacity installed, meaning a maximum value of approximately $7,000. For systems above 1.5kW, customers will be eligible for the standard 1:1 rate of RECs. Solar Credits/RECs are issued by the Office of Renewable Energy Regulator (ORER) for the lifetime generation of the system, and customers can elect to either assign them to the installer to keep the upfront cost of the solar energy installation down, or hold on to them just as you would a share portfolio.

© 2009 Solar Choice Pty Ltd


  1. Hi Guys
    I have recently involved myself in finding out how this whole process benfits me and when calculating the figures it really does not look as good as the sale pitch sounds. EG I currently use around 6 to 7KW’s in a five day not weekend and to benefit I need to install a 2KW unit which will average around 7.2Kw generation so on this I would be selling back to grid between 0 to 1.2KW’s for a total of 72cents per day. I buy the power for 21cents/KW which is $1.47 so for a saving of 75cents/day I have o invest $5700 which totals to 7600 days [20 years]
    My question to all this is how does it benefit the average house when you still have to pay for power service charges if/when these charge’s increase the whole matter of saving goes out the door.
    Apart from the values the various people that contact me all have a different interpretation to the solar benefits.
    If I am incorrect please let me know if I have miss understood the process please convince me

    Thanks for your time guys

    1. Hello Rob,
      The type of feed-in tariff you have depends on your state. On a gross feed-in tariff, as long as your panels are producing electricity, you are feeding it into the grid, and will get paid for it. With a net feed-in tariff, you will be paid for all the surplus electricity (i.e. what you don’t use directly in your home) that you don’t sell into the grid. For every kWh you produce, depending on your tariff, you are either getting paid for producing or not getting charged for using electricity. Your savings should be significantly more than 75 cents per day after you consider how your bills will be offset by what you produce, even if you are not making a profit off of the electricity that you are selling back into the grid, i.e. even if you do not have a surplus of solar-produced electricity. Add this to the Renewable Energy Certificates, which the federal government gives out for newly installed systems, buying solar has never been easier or more affordable than it is now. I hope this was helpful.

  2. What help is there for people who can’t afford to grid connect? Our quote is $75,000 for 5kva of grid connected power.

    1. Are you far away from the power grid? and do you mean a 5kW system? Which state are you in? $75k sounds a bit excessive. Are you talking about an off-grid system?

      1. In your case, it might make more sense to install an off-grid system if it’s going to cost so much to connect to the grid. Renewable Energy Certificates are available even for off-grid systems. These will help you offset the costs.

  3. I just want to know how much this solar credit scheme will reduce the initial cost of purchasing the system and then what are my costs from then on. My electricity bills are around $1000, a quarter what will they be after having solar installed.

    1. Hi Jo,
      We would be more than happy to provide you with an updated price summary of your out of pockets costs in order to most accurately answer your question. Signing up for one on our main website is the quickest way to do this:

      You have a very large energy bill. A 1kW solar energy system will generate around 4-5kW/h a day in Australia. On average, a home will use up about 13-18kW/h a day, and have a respective bill of around $200-$350 a quarter. I estimate you have a average daily energy consumption therefore of around 52-72kW/h, roughly 4 times the average home.

      What I would recommend is a two-pronged approach to reducing your energy bills and making a solar energy system a feasible option on your home. The first is to have an energy audit conducted by a suitably qualified auditor in accordance with the pre-approval process for a $10,000 green loan. More information is available here:

      This will help you to discover what is using up so much energy in the property, and where you can reduce this. The interest free green loan is also a helpful hand when considering a larger 2-3kW solar energy system, which you will have to do in order to impact your needs. These systems are 12-18 panels in size respectively, and require a medium to large amount of Northerly aspect roofing. Make sure this is available.

      I would then recommend signing up on our website as aformentioned and requesting those sized systems price summaries. One of our experience solar brokers will be in contact with you within a couple of hours to discuss the options from there.

      Hope this helps,

      Jarrah Harburn

      Solar Broker

      Solar Choice

  4. Why only grid-connected dwellings?

    Seems to me that government is – as usual – hiding something… namely, that this is effectively a taxpayer-funded subsidy to electricity-generators (by reducing their requirement to upgrade and maintain facilities to cope with load).

    There are people who are off-grid because the cost of grid connection is astronomical ($40k if you are more than about 1km from the last electricity pole in your region – that bears no relationship whatsoever to the costs of putting up a dowzen poles, and stringing some wire across them).

    Think harder when government tells you it’s giving you something… invariably it is robbing peter to pay not Paul, but to pay it’s cronies.



  5. Hi Sandra – the Solar Credit scheme won’t apply to solar hot water, only to solar energy installations.

  6. Does anyone know if water heaters that have fewer than 20 RECs (e.g. small heat pumps) that were previously ineligible for the $1600 rebate, will be included in the solar credits scheme?
    I felt that the last system discriminated against smaller households.

  7. I got a small businese can i get rabate and instal a solar power on my shop and how much cost me thankyou

    1. Hi Danny – yes, all businesses can receive Solar Credits discounts of up to $7,500 depending on where you are in Australia – ask us to generate a Quote Comparison for you to see what new deals are on offer

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