In just under 8 weeks, Australia’s solar panel rebate will no longer be as generous as it is now. Here’s what will happen in 2025.
Not to be confused with feed-in tariffs (credits for feeding electricity into the grid). The refund is actually an advance discount on the costs of an eligible solar power system. The incentive has helped millions of Australians install solar panels. It’s a significant incentive that could be worth thousands of dollars, but it will be gradually reduced and completely eliminated by 2031.
This is how the solar discount works
The subsidy is provided under Australia’s Small-scale Renewable Energy Scheme (SRES) and is based on Small-scale Technology Certificates (STCs).
The number of certificates that accompany a qualifying system depends on the solar panel capacity of the system, the geographic location of the installation, and the year of installation, and decreases on January 1st each year.
The certificates have a value that can vary between $0 and $40 depending on market conditions. “Liable entities” such as electricity retailers are required to purchase STCs under the Australian Renewable Energy Target (RET).
You can sell the certificates yourself, which is a bit inconvenient. In the most common arrangement, the value of the certificates (less administration fees) is given as a discount to the system buyer. The system owner transfers the rights to the certificates to the installer’s registered representative on the day of installation; and they then create and sell them.
How much is the grant worth now?
As an example, and based on an installation in Sydney, a 10 kW PV system installed this year is entitled to 96 STCs. The value of the certificates has remained very stable throughout the year and has reached a high of $40. Based on an estimated value of $36 after fees (and administration fees may vary):
96 x $36 = $3,456
That’s a decent chunk of change.
How much will the solar rebate be on January 1, 2025?
When the calendar changes to January 2025, the same system installed at the same location will be entitled to 82 STCs. Based on a value of $36 after the fee, the solar rebate in 2025 would be as follows:
82 x $36 = $2,952
That’s still a good savings, but a system installed on January 1, 2025 will receive a subsidy that is $504 lower than if it was installed on December 31, 2024.
You can learn more about solar panel rebates here and find certificate numbers and estimated rebate value using the SolarQuotes STC calculator here.
More reasons to switch to solar energy now
In addition to the funding cut, there are other reasons to install a PV system now:
- High STC levels may persist for some time, but could also decline – although I’m not aware of anything to suggest this will happen in the short term; especially to a level that would have a major impact.
- Many solar module manufacturers in China are in the red due to a fierce price war that has been going on for some time. This is good for consumers, but cannot be sustained forever.
- The possibility of significant exchange rate fluctuations affecting component costs (but if that happens, it could go either way).
- The longer you put off an installation, the longer your utility bills will be much higher than they otherwise would be.
If you want to install a system soon, you need to get started. Aside from the fact that the STC reduction deadline is not far away, keep in mind that good solar installers are usually busy and many take a well-deserved break towards the end of December. And remember, the discount amount is based on the installation date, not the contract signing date.
A word of warning: rushing into the wrong system/installer could prove more costly than waiting. In this case, find out more first and take a look at SQ’s Solar 101 Guide. The guide tells you what you need to know about choosing the right system for your circumstances and at the right price. Even if you miss the deadline, having better information will put you in a better position to achieve a better solar experience and savings in the long term.
However, if you really want to get started right away, request a quote and we’ll match your needs with up to three pre-vetted solar installers we trust – and this free service is backed by the SolarQuotes Good Installer Guarantee.
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