The Solar Credits program is part of Australia’s Renewable Energy Target.
NEWSFLASH! Solar Credits subsidy reduction on the horizon – learn more here.
Under this initiative, every megawatt hour of qualifying small-scale renewable energy generation is eligible for renewable energy certificates (RECs); also known as STC’s.
This means when a solar power system is installed it not only accesses the value of the energy it produces, but also the monetary value of the accompanying certificates.
How does the solar panel credits scheme work?
A single REC/STC is equivalent to one megawatt hour of electricity generation produced until 2030 (the “deeming period”). STC’s are currently issued with qualifying solar power systems and solar panels and can be traded for cash. The value of a REC is dependent on market conditions.
When you purchase a solar power system from Energy Matters, we have already discounted this value for you in your solar quote. On a 5kW system, this value can represent more than $4,000 of available subsidy.
On the day of installation, you assign the RECs/STCs over to us and we then complete the registration of these certificates with the Renewable Energy Regulator on your behalf; saving you the hassle of doing so.
The Solar Credits subsidy levels are based on three elements – zoning, STC values (which fluctuate) and the deeming period.
Australia is divided up into various zones based on how much renewable energy can be generated by a solar panel in a given area. You can determine your zone in this table (PDF), or by using the following interactive application.
Once you have the zone, the following is the multiplier:
Zone 1 – 1.622
Zone 2 – 1.536
Zone 3 – 1.382
Zone 4 – 1.185
.. and here’s the formula to calculate STC’s:
System size (KW) x Postcode Zone Rating x Deeming Period (Years) = Number of STC’s (rounded down).
As mentioned, STC’s be traded in for cash or as a point of sale discount with companies such as Energy Matters. Their values are controlled by market forces; meaning they can fluctuate up and down continuously.
As an example of subsidy level under the solar credits scheme, if you buy a 5kW system in Victoria (Zone 4) that is installed after December 31, 2012 and before the end of 2016, you’ll receive:
88 STCs x $38*/STC = $3,344 subsidy
A breakdown on different zones (5kW systems – all figures approximate):
- Zone 1 subsidy = $4,622 (@ $38*/STC)
- Zone 2 subsidy = $4,377 (@ $38*/STC)
- Zone 3 subsidy = $3,938 (@ $38*/STC)
- Zone 4 subsidy = $3,344 (@ $38*/STC)
How much will the subsidy reduce by after 2016?
From January 1, 2017 until the end of next year, the deeming period will reduce by 1 year; representing approximately 6.5% subsidy reduction compared to 2016. In the following years, it the deeming period will continue to reduce.
The following graph shows the impact of the shortening deeming period on the Solar Credits subsidy out to 2030, assuming a 5kW installation in Melbourne and an STC value of $38 per certificate.
* Estimated value only – REC values fluctuate due to market conditions.
* IMPORTANT : After 2016, the subsidy will reduce – learn more here.
How do I cash the REC/STC credits?
Relax 🙂 While the program may seem a little confusing, Energy Matters is here to make things super-easy for you!
While you can claim the cash value of the RECs yourself, that means you’ll need to pay the full price of the solar power system up front and then have the paperwork hassles, followed by the wait.
However, we can offer you a point of sale discount if you assign the credits to Energy Matters as we’re a registered REC agent! We then take care of the rest, saving you having to deal with red tape!
Solar Credits Scheme FAQ
The following are some other commonly asked questions and answers regarding the solar credits program.
Is this really a rebate?
The program was previously commonly referred to as the Solar Credits rebate, but in effect it is a subsidy offering up-front discount on the purchase of a solar power system.
Who is the solar panel credits program open to?
Home owners, small businesses and community groups are all eligible for the Australian solar credits program! No-one is means tested and schools are also eligible for the Solar Credits scheme.
Does it cover remote power systems?
Yes, the solar credits program covers grid connect and off grid solar power systems. Further details about Solar Credits and off-grid solar power systems can be viewed here.
Does it cover energy storage?
You can buy a battery system as part of a solar package and still receive the subsidy; but energy storage doesn’t attract any extra subsidy.
What size system should I buy to achieve the maximum rebate?
Since the phasing out of the Solar Credits multiplier for systems installed after December 31, 2012; size is no longer relevant in terms of level of support for both grid connect and off grid systems.
Can I install the panels myself to get the full solar credits value?
No. The Office of the Clean Energy Regulator have made it a requirement that only CEC accredited installers can sign-off on Solar Credits.
Does the solar credit program also apply to wind power?
Yes it does – the same guidelines will apply for wind turbine installations – even for micro-hydro systems!
What about caravans, boats, sheds, motorhomes and RV’s?
As long as the caravan, boat, shed or RV is your principle place of residence and has an address (such as a caravan park site or marina berth), it will be eligible under the solar credits scheme.