STC support from Australia’s Small-scale Renewable Energy Scheme will be decreased in 2020, causing an increase in the cost of solar panel installations across the nation.
The scheme awards several small-scale technology certificates (STCs) to households and businesses that install solar panels. The size of the system determines the number of STCs for the system.
The monetary value of these STCs is discounted from the upfront cost of the installation. Currently, this can equate to thousands of dollars. Ultimately, the supply and demand is what drives the price of the STC overall.
The installation costs will increase from January 1, 2020.
However, Federal Energy Minister Angus Taylor noted that the scheme will be phased out over the next 12 years. This will include ceasing any issuing of STCs altogether from 2030 onwards.
Currently, Australia’s solar uptake is the primary result of the strong support that the scheme offers.
How do STCs affect the cost of rooftop solar?
From now on, the number of STCs given out will be reduced year on year. The following scenario demonstrates how much more customers will pay for a rooftop system moving forward.
Until 1 January 2020, a 5.3 kW solar panel system installed in Darwin attracts 97 STCs.
In 2020, the same system will attract 89 STCs. Another five years down the track and that figure will be 56; ten years will be 16. By 2030, the number will be zero.
Each STC has a dollar value set by the market. This varies due to supply and demand. For this example, let’s say the value is $35, although it can be as high as $40.
If we multiply $35 by 97 – the number of STCs a 5.3 kW system attracts in Darwin in 2019 – we get $3,395. This is deducted from the upfront cost of installation.
But five years from now, when the same system earns only 56 STCs, the discount will be $1,960. From then onwards, it will fall annually until it reaches a total of 0 in 2030.
You can calculate the STCs for any area and date via this government website.
State assistance for solar panel installations cost
Various states also provide financial support for rooftop solar installations. The Victorian Solar Homes rebate distributes $2,225 of the system’s cost for households that are eligible.
However, the Victorian Solar homes rebate will also drop in the New Year, from $2,225 to $1,880.
The Victorian Government recently expanded the scheme to renters. Renters will make a 25 per cent contribution toward the cost of installation through a small levy on rent spread over four years. The government and the landlord cover the rest.
There are still some retailers offering a guarantee to get you installed this year, or they’ll cover the cost of the reduced rebate.
To get 3 Solar Quotes now, click here.