A change to the government rebates for solar will be taking place at the end of the year that is sure to affect those considering going solar in the near future. For any system installed/commissioned from after December 31st, so from January 1, 2018 onward, customers will receive approximately 7% lower rebate for the total cost of their solar system. In other words, customers can expect to pay more for the exact same system commissioned after December 31st.
These changes are a result of a scheduled government rebate scheme as part of Australia’s Renewable Energy Target (RET), wherein business are encouraged to partake in renewable energy generation through the use of a credit (called an STC).
These credits/STC’s are compensated to the system owner for the total cost of their system to make it more affordable to help meet the RET. STC’s were created upfront for a 15 year deeming period OR however many years are left before 2030. Last year was the first year the rebates reduced, with reductions scheduled at the end of every year until 2030.
The formula for determining the value of STC’s is:
STC Value = Size of the System(kW) x Postcode Multiplier x Deeming Period x Spot STC Price
To put these calculations into perspective, solar customers stand to see a loss of this ‘free money’ from the government of ~7%. Or, to simplify things, an example of a 100kW system installed in Sydney:
- STCs for a 100kW in Sydney: 100kW x 1.382 postcode multiplier x 14 years x $37.371/STC = $72,303
- For installs after December 31st: 100kW x 1.382 postcode multiplier x 13 years x $37.37/STC = $67,138
- That is a difference of over $5,000
The window for receiving the maximum rebate for interested customers is approaching faster than the December 31st deadline appears. In order to be eligible, the installation must be complete. To begin a solar installation, approval from the local grid owner (DNSP) is required. These can take up to 3-4 months to receive, which means that time is encroaching to ensure systems are installed before the December 31st cut off.
Those interested in receiving the maximum rebate are encouraged to do as soon as possible to ensure plenty of time for project completion.
To find out more about the rebate changes contact us to speak with one of our consultants.
1. Price assumption based on Todae Solar STC pricing correct at the time of writing.