Under a federal government program introduced under the Renewable Energy Act 2000. The cost of purchasing a solar system for your home is subsidised up to a maximum dollar value. This is called the STC Solar Rebate (Small-scale Technology Certificate). However, the government says that this isn’t a rebate, it’s simply a reduction in the cost of buying a solar system.
How is the STC Solar Rebate calculated?
Colloquially, most people still call it the STC Solar Rebate, but whatever you call it, this subsidy can go up or down and may even be eliminated completely. The number of STCs allocated to your new solar system is calculated based on where you live, the size of your system. Also the deeming period and market conditions. We will discuss these last two points in the next section.
Generally, each STC is equivalent to one megawatt hour of generated renewable electricity. So the larger the solar system you install, the more STCs you receive and the greater the subsidy. If you know the size of your installation, you can calculate the number of allocated STCs on the REC Registry website (Renewable Energy Target).
What is the actual value of the STC Solar Rebate?
By law, each STC can’t be greater than $40, but it can be as low as $0! Currently, each single STC is worth $33, but it has been higher and it has been lower. As mentioned above, the actual redeemable cost of each STC is partly dependent on the deeming period and market conditions. Both of which change over time.
The deeming period runs from January 2017 to January 2030. Decreasing every year until zero STCs will be created for new solar systems in 2030. Since the value of the STCs is calculated on the amount of renewable electricity. The solar system can generate over the remaining deeming period. As this timeframe reduces, so does the value of the STC Solar Rebate.
This means that the longer you leave your solar installation, the lower the STC subsidy you will receive. Your solar installer usually deducts the dollar value of the STCs from your purchase and installation quote. So hypothetically the total cost of an installation might be $10,000, but the installer only quotes $6,000 because of a $4,000 STC Solar Rebate.
Scott Morrison our new Prime Minister has also proposed to remove the Solar Rebates (STCs) instead of waiting for 2030. Since the new prime minister was elected the STCs value have dropped from $37.5 to $32. Therefore getting solar installation now is more important than ever!