Rooftop Solar Subsidy to be reduced on 1 January 2017

An Australia-wide, upfront subsidy for rooftop solar systems is set to be reduced within a few weeks when the “deeming period” for solar systems declines from 15 years to 14 years on January 1.

The long-standing rebate for the purchase of rooftop solar systems is based on the estimated output of a system over 15 years. This determines the number of small scale certificates (STC) that can then be sold to reduce the upfront cost. They equate to around one-third of the cost of a system.

It has been one of the most effective policy tools in a government struggling to put together a meaningful response to climate change.

Solar sales in Australia have jumped sharply in recent weeks, possibly due to the looming reduction in the rebate, the phase-out of some solar bonus tariffs, and the attraction of battery storage.

The Clean Energy Regulator issued a statement on Wednesday reminding installers and consumers that there will  be no transition period and the decline in deeming period will begin as of 1 January 2017.

The decline in deeming period will see the 15 year deeming period reduced to 14 years, and the deeming period will further decline each year until 2030, when the rebate will be effectively phased out.

“The Clean Energy Regulator will be closely monitoring installation dates during this time to ensure that the correct deeming period is applied,” it said in a statement.

The CER said its small generation unit calculator has been updated to include the upcoming deeming periods and can be used to calculate the number of STCs applied in 2017 and beyond.

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Giles Parkinson