If you’ve been doing your research into solar energy in Australia, chances are that you’ve come across the NSW Solar Rebate. But if you’re like most people, you’ll leave Government websites feeling more confused than enlightened.
What is the SRES, which is the STC program, and what on earth are RECs? Exactly how much money will I be saving through the Rebate, and how can I work out the exact amount? Read on for clear answers to your most pressing solar questions.
A short modern history lesson
It’s no secret that climate change poses a huge threat to the future of the planet. Governments around the world have signed international treaties and committed to making an active effort to reduce greenhouse gas emissions before it’s too late.
From the Kyoto Protocol of 2005 to the Paris Agreement of 2016, Australia has signed on to become part of this critical global movement towards sustainable energy. Currently, Australia’s Renewable Energy Target is to have 20% of our electricity sourced from renewables by 2020.
This Renewable Energy Target is split into two key parts:
- The Large-scale Renewable Energy Target (LRET)
- The Small-scale Renewable Energy Scheme (SRES)
While the former provides incentives for the development of large-scale renewable power stations across Australia, the latter is directed towards homes and small businesses, encouraging them to invest in solar panels, hydro systems, and other sources of renewable energy. This is the part relevant to you and your new solar system.
So how does the SRES work?
The solar “rebate” through the SRES is known as the STC program – or Small-scale Technology Certificate. A lot of acronyms, I know, but bear with me.
The STC program subsidises the upfront cost of installing your solar system. There are three criteria for claiming it:
- Your solar photovoltaic (PV) system is less than 100kW
- Your panels and inverters are approved by the Clean Energy Council
- The system is installed by a retailer approved by the Clean Energy Council
But how does the Government subsidise them?
This is where things get a little bit complicated. When you install a solar energy system for your home or small business, the Government will issue you with a certain number of Renewable Energy Certificates (RECs) depending on the size of your system and how much sun it’s likely to get.
These RECs (or Small Scale Technology Certificates, as they are known in residential areas) are purchased by fossil fuel companies who haven’t invested enough in renewable energy sources to meet the Government’s mandated amount. Typically, your solar panel installer will handle this part of the process for you
By purchasing your Certificates, fossil fuel companies effectively offset the installation cost of your solar energy system, hence the ‘Rebate’.
So how much money will I save?
The STC rebate is worth approximately $600 per kW. So, theoretically, if you were to buy a 5kw System for $8,000, you would save $3000 – paying only $5000.
It’s important to note that the prices advertised by most solar power retailers will include the solar rebate – i.e. that is the final price after the rebate is applied, not before. Always check with your retailer to confirm this, and make the most of the Government’s solar subsidy while it lasts, as it will be reducing each year until it’s phased out in 2030.
Image source: PV Magazine Australia