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Rebates for solar power through the federal government

The Federal Government provides support for all forms of renewable energy through a mechanism called the Renewable Energy Target (RET). The RET obliges 'liable entities' to purchase and surrender a certain number of Renewable Energy Certificates (RECs) every year, with the total number of RECs required to meet the target increasing annually. RECs can be purchased from 3rd parties or created by the utilities companies themselves by producing power from renewable energy sources such as solar power.

In order to encourage the development of both large-scale and small-scale renewable energy generators, the RET is divided into two segments: The Small-scale Renewable Energy Scheme (SRES) and the Large-scale Renewable Energy Target (LRET).

The Small-scale Renewable Energy Scheme (SRES): Residential and <100kW commercial solar power

The SRES was developed to assist households, small business and community groups with the cost of installing a solar PV system. The SRES works by issuing Small-scale Technology Certificates (STCs) to eligible households. STCs are based on the expected output of the solar system over a set period (although most systems can be expected to have a functional lifespan of up to 30 years), one STC is the equivalent of 1 megawatt-hour (MWh) of renewable energy. The set period ('deeming period') was 15 years until the end of 2016, and is reduced by one year each year thereafter until 2030.

At the present time solar PV systems up to 100 kilowatts (kW) are eligible for STCs, however, the most recent RET review has put forward the suggestion that this be reduced to 10kW.

STCs, which can be described as a sort of renewable energy currency, can be bought, traded, and sold, and their value fluctuates with supply and demand. The current STC price sits at around $38, but has fallen as low as $16 and has been as high as $42.

As STCs are created based on the expected output of the system they can be created as soon as the system is installed, the system does not need to produce any power before its STCs are created. Under the expectation that they will produce more power, systems installed in sunnier locations are eligible to for a larger number of STCs, while less sunny locations create fewer.

In effect, this provides an up-front discount for those who purchase solar systems for their homes or businesses, as installers usually assume the responsibility for creating the STCs as well as the risks associated with holding onto or selling them.


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Additional Solar Rebates: Solar Credits Scheme (closed 1 January 2013)

The SRES provided extra support for those investing in small-scale solar PV systems through the 'Solar Credits' scheme, this multiplied the number of STCs allocation for the first 1.5kW of the system. The Federal Government announced on 16 November 2012 that it was closing the Solar Credit scheme six months early on 1 January 2013.

Customers who signed a contract with an installer prior to 16 November 2012 have until the end of June 2013 to install a system to take advantage of the 2x multiplier.

Customers who signed a contract between 17 November and 31 December 2012, had until 1 January 2013 to have their system fully installed (panels and invert connected but not necessarily grid connected) to receive the 2x multiplier.

From 1 January 2013 customers installing a solar PV system under 100kW will receive the standard SREC discount.

As the value of STCs fluctuates, there is no fixed figure by which the cost of a solar PV system will reduced by.

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. In contrast to the Federal Solar Credits scheme, which offers in effect an up-front discount, Solar Feed-in Tariffs provide ongoing, performance-based incentives for those who export their solar electricity to the grid.

You can calculate how many STCs a solar system in your location would produce with the Clean Energy Regulator's STC Calculator. You can see the current STC price on the Clean Energy Council website.

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The Large-scale Renewable Energy Target (LRET): Solar power systems >100kW

Under the RET, in addition to STCs, power utilities are also required to surrender a set number of Large-scale Generation Certificates (LGCs). LGCs can only be generated by commercial and utility-scale renewable energy generation systems (such as solar power systems) over 100kW in capacity that have undergone an accreditation process to produce them.

An important difference between STCs and LGCs is that LGCs are produced on an ongoing basis after the system is accredited, installed, and producing power. Large-scale generators therefore provide an ongoing revenue stream for their operators. As with STCs an LGC is a tradable unit that acts as a currency for renewable energy, and prices therefore fluctuate with supply and demand.

Read more about the creation of LGCs.

The current LGC price can be seen on the Clean Energy Council website.


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Solar rebates and incentives

Solar power rebates: Federal Solar Rebates and State feed-in tariffs

Federal solar credits rebate scheme: RECs, STCs, and LGCs

State-by-state Solar Feed-in Tariff incentives

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