• How do the current Government incentives work if you want to install a solar power system? It is always surprised at how often you get asked what the government incentives are for solar panel installations.

  • The federal government scheme has been around for a few years now, and under current legislation the scheme will be available for eligible solar system buyers until 2030.

  • You will try to simplify the actual incentive scheme, exactly who’s eligible, and how to work out what sort of discount you should be entitled to if you are considering buying a solar power system.

How do solar photovoltaic (PV) panels work?
Solar panels use layers of special materials called semi-conductors that create electricity when exposed to sufficient light. There are different types of solar panel construction. Some panels tend to perform better in high temperatures and low light situations, but take up around twice the space.
Will I be financially better off getting solar power?
In the vast majority of cases, getting solar power will help reduce your electricity bills through reducing the amount of power you buy from the grid and through the feed in tariff you receive for excess power you sell to the grid. The amount of electricity you have will depend upon a range of factors including the size of the system, whether the system has been installed in the optimal location and your individual electricity use patterns. Be wary of claims that you will never need to pay a bill again or can eliminate you electricity bills.
What Government financial incentives are available for solar power?
The Federal Government financial incentives for solar power in community organisations and small businesses is the Small-scale Renewable Energy Scheme (SRES). Under this scheme a solar power system can create Small-scale Technology Certificates (STCs) that may be sold to partially offset the price of the system. STCs have replaced the former Renewable Energy Certificates (RECs). Feed in tariffs are a different type of benefit that provide ongoing financial incentive rather than an upfront price reduction. Feed in Tariffs are usually applied to your electricity account via your energy retailer for any energy that if fed back to the grid from your Solar System. Be aware that Tariff rates vary so ask your retailer about what rate they provide per kW.
How long will it take for a solar power system to pay for itself?
The payback period of a solar power system varies widely depending on the initial investment for the system, the size of the system, the usage patterns of the consumer and the price received as a feed in tariff from the energy retailer. For premises that use small amounts of electricity and receive the premium feed in tariff, the payback period can be less than 3 years. For premises that use a lot of electricity and are not eligible for the premium feed in tariff, the payback period will be closer to 7 years.
How much electricity will I generate?
The amount of electricity that you generate depends on the size of your system, which way it is facing, whether there is any shading from trees or other buildings and the local climatic conditions. One of our consultants can provide an indication of the average generation a Solar Energy System will provide on your business.
What is the difference between net metering and gross metering?
Gross metering measures all the power your solar panels produce and all the power that you use in the premises. This type of metering is used where there is a gross feed in tariff such as in the Australian Capital Territory (ACT). Under gross metering you are paid the gross feed in tariff for all the power you produce and you must pay the usage tariff for all the power that you consume.Net metering measures only the difference between what your solar power system is producing and what you are consuming. Net metering measures the amount that you import separate to the amount that you export and is used where there is a net feed in tariff such as in NSW and Victoria. Under net metering you are paid the net feed in tariff for the excess power you produce and you must pay the usage tariff for any power that you import.
How much will I be paid for the electricity I generate?
You will only be paid for electricity that you export to the grid. You should check the feed in tariff offered by your electricity retailer and compare offers from different retailers.
What is the expected lifespan of a Solar PV System?
A Solar System is expected to continue producing electricity for 25+ years if maintained. Solar Panel manufacturers guarantee that the system will continue to produce no less than 80% of their efficiency for 25 years.
Does the system require regular maintenence?
Provided the system components are manufactured to a high level of quality there should be very minimal maintenance. The surface of the panels are generally self cleaning depending on the degree of pitch. It is recommended however that periodically you consider a health check to ensure the system will continue to produce to its best for 25 years. You will be provided a maintenance schedule upon completion of the installation.
Is the system exposed to corrosion?
The frame and mounting system is anodised aluminium, they are coated in an anticorrosive agent. The Inverter is manufactured for exposure to the environment and provided the electrical components are manufactured to a high quality they to are built to withstand all weather conditions.
Will it help the environment if I get solar power?
Solar Energy is a Renweable energy. Renewable energy is generally defined as energy that comes from resources which are naturally replenished on a human timescale such as sunlight, wind, rain, tides, waves and geothermal heat. Solar power generation produces no greenhouse gas emissions or air pollution therefore are healthy for the environment and will assist the fight against Global Warming.
How does the solar rebate scheme work?
The scheme is called the Small-scale Renewable Energy Scheme and the website states “Under the Renewable Energy Target, if you have installed an eligible small-scale renewable energy system within the past 12 months you may be eligible to create small-scale technology certificates.”
These tradable certificates (STC’s) are usually offered as an upfront discount on your solar system with your installer trading the certificates on your behalf.
How much is the rebate worth to me?
Firstly, it is very simple to work out how much you’re entitled to when buying a solar power system. To work out what solar rebate your proposed system will bring you can simply jump on the REC registry website HERE and run a few sums.
The STC price as of today (14 March 2019) the spot price is around $37, or $630 per kW installed. So, from here the math is simple: If you want a 5kW solar power system then you would get $3,150 off the total cost of an installed system in subsidies (5 x $630).
The bigger the system the larger the rebate based on this equation:
Cost of an installed 30kW solar power system in 2019: $48,900 STC Subsidy: $18,900 Discounted Cost you actually pay: $30,000
If you are unsure what size solar power system your home or business may need you can find some pointers by reading through THIS explanation.
Will the incentives run out and are they reducing each year?
This question usually arises because you have either read or been told if you don’t buy your system this year you may not receive any rebate at all next year, or the rebate will likely be drastically reduced.
In short, yes, the scheme is coming to an end – by 2030 the funds will have reduced to zero and there will be no more subsidies available under that legislation.
Whilst it is a risk that the scheme can be canned (the ACCC made recommendations to this affect in their REPORT last year) it is unlikely to be scrapped in a matter of months, or even a year or two. That would be a disaster.
The two main points to consider here are:
  • 1. The STC price of today is a spot price based on an open market. Ie the price available today may not be available tomorrow. The spot price has floated between ~$30-$40 per STC over the last 12 months (a good graphical HERE) and for some larger installations this can mean significant volatility in your final discount price before the certificates are traded; and
  • 2. The actual cost to you of waiting to install your system can be estimated using this For the above example of a 5kW system, the estimated STC rebate available if you installed your system in 2020 would be $2,812. So, you would be $338 worse off if you delay until 2020. Not an insignificant amount, so certainly worth considering when choosing the ideal time to install a solar power system.
How do I know if I am eligible for a rebate?
The eligibility test is quite simple – the only criteria being:
  • 1. The size of the solar panel system you installed is less that 100kW;
  • 2. Your installation was completed by ASD solar professional; and
  • 3. The panels and inverter your solar professional installed was approved by the Clean Energy Council (this can be found on the data sheets/brochures for your equipment. If you are unsure ask your provider to show you the documentation).
How does the actual process work?
For those of you interested in the details the process I’ll try and explain it in a few short steps:
  • 1. Renewable Energy Certificates (RECs) are created by the government;
  • 2. The government then decrees that fossil fuel generators either build an amount of their own renewable energy generation (ie wind or solar) to supplement the burning of fossil fuels OR buy the right to third party renewable energy generators through purchasing RECs;
  • 3. When you install a solar power system the government grants you a certain number of RECs based on the system size and your location (if your system is < 100kW these RECs are called STCs);
  • 4. Your STCs are sold (through a trading house) to fossil fuel generators with the proceeds used to discount your upfront installation price of the system;
As always if you have any questions about this post please don’t hesitate to drop me a line.
If you are interested in a free solar power assessment on your home or business, I would be happy to assist

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