If you’ve looked into changing over to solar energy, you’d probably be aware that all states and territories have some solar incentives you can access. In addition to federal government solar incentive, there are plenty of energy retailers across the country offering feed-in tariffs, which give you a credit for any excess solar power you generate.
All of these incentives mean it’s now easier and more financially viable to make the solar switch. What you may not know, is there are also some federal solar incentives that fall under this, that you can access nationwide. No matter where you live if you want the best solar panels Australia has to offer, there are federal solar programs to further incentivize the switch.
Federal Solar Incentives & the Renewable Energy Target
The Renewable Energy Target is a scheme administered by the Clean Energy Regulator aimed at furthering Australia’s push towards reducing CO2 emissions. One of the ways to reduce emissions, of course, is to switch to renewable energy sources like solar, wind or hydro. So, the Clean Energy Regulator has introduced the Renewable Energy Target scheme, which is actually split into two parts for federal government solar scheme.
Firstly, there is the Large-scale Renewable Energy Target, which encourages investment in renewable power stations. Then there’s the Small-scale Renewable Energy Target Scheme, which supports smaller renewable energy installations such as solar panels, small-scale wind and hydro systems and solar hot water systems.
How Does the Scheme Work?
Both federal solar schemes are aimed at providing financial benefits to those who invest in and generate renewable energy. This applies to participants in both the large-scale and small-scale incentive schemes.
For example, if you’ve installed eligible solar panels in Australia during the last 12 months, you may be eligible to create small-scale technology certificates (STCs). Basically, you can create a certificate for every megawatt-hour (MWh) your system generates. This is known as the ‘supply’ side of the certificate market.
Then, wholesale purchasers of electricity (such as energy retailers) purchase the certificates to meet their renewable energy obligations. This is the ‘demand’ side of the market.
The number of certificates that can be created for each system depends on a variety of factors, such as geographical location, installation date and of course, the amount of energy it produces.
How Do I Benefit Financially?
As an eligible solar energy customer, there are a couple of ways you can benefit from the Small-scale Renewable Energy Target scheme and Federal Government Solar incentive. You may be able to receive an upfront discount on the total cost of your solar panel system. Alternatively, you may elect to receive a certain number of small-scale technology certificates which can be created and sold following installation.
Either way, this helps to reduce your solar panel cost, making it more attractive to go solar.
How Much Am I Eligible To Receive with Federal Solar Incentive?
There is a pretty simple calculation you can use to determine how many STCs you might be entitled to. However, you’ll need a little bit of information first.
Firstly, you need to know your particular deeming period. This could be anywhere from one year, five years, or any other single maximum deeming period. Essentially, this period is determined by the installation date. For example, systems installed in 2021 have a deeming period of 10 years. This number reduces each year until 2030, limiting the number of small-scale technology certificates that can be issued.
Then, you’ll need to know your solar system size. This is measured in kilowatts (kW) and can be obtained when you’re searching for solar panels for sale.
Finally, your geographical location plays a part, as all areas are rated differently. Your postcode will fall into a Zone from 1-4, and each has a different rating.
The equation you can use is:
Solar system size (kW) x Postcode Zone Rating x Deeming Period (years) = Number of STCs (rounded down).
For example, let’s consider a customer living in Brisbane who purchases a 6kW solar panel system in 2021. They fall into Zone 4, which has a rating of 1.185, and the deeming period is ten years.
6 (kW) x 1.185 (Postcode Zone Rating) x 10 (Deeming Period years) = 71 STCs
How Much Is an STC Worth?
The value of an STC fluctuates, and at the time of writing it is $38.65. You’ll need to know how much an STC is worth to determine the total amount you’re eligible for. Let’s use our example above, based on an STC value of $38.65 each.
Our Brisbane customer is eligible for 71 STCs, so the calculation is: 71 x $38.65 = $2,744
How Do I Claim STCs?
There are two ways to claim your STCs. In short, you can claim at the time of purchase to receive a discount on the solar panel cost or you can do it later through the Clean Energy Regulator. Ultimately, the amount you’re entitled to from the federal government solar incentive doesn’t change, however there are benefits to choosing the first option.
By choosing the upfront discount, you sign over your right to claim STCs to your solar energy retailer and they do everything on your behalf. So, not only do you escape the need to fill out a bunch of forms and deal with the Clean Energy Regulator yourself, but you also get the discount straight away.
It’s much easier and automatically reduces the cost of your solar panel installation. If you choose to claim STCs later, you’ll need to pay the full amount for your solar system upfront and then contact the Clean Energy Regulator to sort out your STCs.
Need Help Making the Switch To Solar Energy?
Here at Captain Green, we offer a wide range of solar packages to suit all budgets and households. We can also help you to claim your STCs and instantly reduce your upfront cost. For example, purchase a 10kW solar system from us, with an average STC value of $38*, you can save between $4,484 and $6,156 on your system.
To save money on energy bills and contribute to a cleaner, greener future, make the switch to solar today. Give us a call on 1300 361 682 or get a quote today!
*Rate subject to fluctuation