What rebates are available to households in 2020 for solar panels and battery storage? What are they worth and who is eligible?
This article provides an overview of the current state of play, as of February 2020. It is written by Jo Kaptein, the organiser of the Mallee Sun Solar Bulk Buy, a program delivered in partnership with Swan Hill Rural City Council and the Central Victorian Greenhouse Alliance.
In this article, I’ll be covering:
- the federal ‘rebate’ – also known as the STC scheme.
- the Victorian government rebates for solar panels and batteries – through the Solar Homes program.
- the solar feed-in tariff – which isn’t a rebate, but still worth knowing about.
Federal ‘solar rebate’
Correctly known as Small-scale Technology Certificates (STCs), this is a federal scheme which is available to all households and is not means-tested. Without STCs, your solar power system would be around 25-30% more expensive – so they really are worthwhile!
STCs are always applied at the point of sale, meaning the amount you pay your solar retailer has the STCs already deducted. The solar retailer will claim the STCs once your solar system has been installed and checked by an independent Electricity Safety Officer.
STCs are currently worth around $550 per kilowatt installed. So for a 6.6kW system, the STC rebate is worth around $3,630.
Here’s an example
- Advertised price of a 6.6kW solar system: $7,600
- Value of STCs for this system: $3,630 (approx.)
- The amount you pay: $7,600 (not taking into account the Solar Homes rebate which would reduce your costs still further)
- The total value of your system: $11,230 (advertised price + value of STCs)
As you can see, the STC scheme is a valuable incentive for households thinking of going solar. Everyone can get them for their home or business solar system (and for multiple properties they own), as long as the system is less than 100kW and the solar retailer as well as the components of the solar power system are approved by the Clean Energy Council.
It is important that you know that the Federal Government has a planned reduction of the value of STCs over time – but only by around one tenth per year from the present value, until it drops to zero in 2031. Also important to know is that STCs are a traded commodity, so this is the other factor that can result in a varying in the value of STCs.
Victorian Government’s Solar Rebate
The state government launched the second round of their 10-year Solar Homes Program (solar.vic.gov.au) on 1 July 2019. This rebate is in addition the federal rebate outlined above, meaning that you can get both the federal rebate and state government rebate providing you are eligible.
The Solar Homes Program offers the following rebates:
- Solar panels rebate for homeowners
- Worth up to $1,888 or half the cost of the system (whichever is lowest)
- An interest-free loan for solar panels for homeowners
- This is in addition to the solar panels rebate and up to the same value as the rebate, i.e. $1,888.
- Solar panels rebate for rental properties
- Worth up to $1,888 or half the cost of the system (whichever is lowest).
- Landlord pays the remaining cost of system.
- Tenant receives the full benefit of lower electricity bills.
- No interest-free loan available, but this is expected to become available later this year.
- Solar battery rebate
- Worth up to $4,838 in designated postcodes (do not currently include any postcodes in the Rural City of Swan Hill).
- Solar hot water rebate
- Worth up to $1,000.
Currently, the supply of Solar Homes Rebates – in all categories – exceeds demand. This is great news if you are thinking of applying for one.
Solar Panels Rebate
In this section, I will provide more information on the main rebate that we are helping householders apply for – which is the Solar Panels Rebate for Homeowners.
The eligibility criteria for this rebate is as follows:
- You must be the owner-occupier of the property (note: there is also a rebate for rental properties – see here)
- Combined household taxable income of less than $180,000 per year.
- It is an existing property, valued at under $3 million.
- You do not have an existing solar PV system installed (with the exception of those installed prior to 1 November 2009 who are eligible to replace or expand their existing system).
The process has been updated to make it easier for households to apply. The steps are:
1/ Find an authorized solar retailer (we can help you with this through the Mallee Sun Solar Bulk Buy).
2/ Obtain a quote in writing.
3/ The solar retailer will upload the quote into the Solar Homes portal, triggering your application for eligibility.
4/ You upload the necessary documents:
- A council rates notice for the installation property.
- Proof of your income such as your Australian Tax Office Notice of Assessment.
- 2 forms of ID, such as an Australian passport and Australian driver’s licence, to prove your identity using your phone (if this is not possible you can do it manually).
5/ You will then receive notification whether your application was successful. If successful you will receive an eligibility number.
6/ You provide the eligibility number to your installer, which confirms that they can go-ahead with your installation.
7/ It is recommended that you do not pay a deposit for the system, until you receive this eligibility number. If however you do pay a deposit prior to receiving your eligibility number, you should get confirmation in writing from the installer that your deposit will be refunded if you are not eligible for the Solar Homes rebate.
8/ The value of the rebate (i.e. up to $1,888) and the interest-free loan (should you also successfully apply for this) will be paid directly to the installer. You pay the installer any balance remaining on the cost of the system, typically on date of installation.
The value of solar panels rebates
When combined, the federal ‘rebate’ and state government rebate for solar power systems significantly reduce the amount you pay for solar. This is as much as almost 50% off a typical 6.6kW system!
Here’s an example to show you what these rebates are worth:
6.6kW solar power system
- Total value (before STCs are deducted): $11,230
- Value of STCs: $3,360
- Advertised price (after STCs deducted): $7,600
- Value of Solar Homes rebate: $1,888 (based on eligibility)
- Cost of solar power system to you: $5,712 (should you be eligible for the Solar Homes rebate)
- Value of Solar Homes interest-free loan: $1,888 (based on eligibility)
- This reduces the upfront cost for your solar power system by a further $1,888
- The amount you pay your solar retailer: $3,824 (if you also get the interest-free loan) although you will have monthly repayments on the interest-free loan over 4 years, which you can choose to pay off sooner as a lump sum should you wish.
How we can help
Whilst the process of applying for the Solar Homes rebate has been greatly simplified in recent months, as organisers of the Mallee Sun Solar Bulk Buy, we are still finding that lots of people have questions and have asked us for support to understand and complete the application process.
This is something that we are more than happy to do, as it is part of the ethos of the Mallee Sun Solar Bulk Buy to provide participants with the information and support they need to ‘go solar’ in way where they feel fully in control and at ease with the process. Put in another way, we are all about making solar as simple and hassle-free as possible!
Here are the practical things we do to help anyone who makes an enquiry through the Mallee Sun Solar Bulk Buy program:
- Throughout 2020, we will be running regular public info meetings for anyone interested in solar and/or battery storage in the Rural City of Swan Hill.
- Our first info meeting is in Swan Hill on Wednesday the 26th of February at the Swan Hill Information Centre, Cnr McCrae & Curlewis Streets, from 6.30pm-8.00pm.
- For more information and to reserve your free place visit our website or call us on 1300 466 274.
Call us on 1300 466 247
- Talk to knowledgeable staff who run the Mallee Sun Solar Bulk Buy, if you would like general information about the bulk-buy program, our info meetings – or simply a chat about rebates prior to requesting a quote.
Practical support with the rebate application process
- Specialized Solar, the solar retailer appointed through competitive tender for the Mallee Sun Solar Bulk Buy, can advise you on the rebate application process and provide practical support every step of the way.
Some people confuse the credit you get for exporting your excess solar power back to the grid with the rebate schemes outlined above.
This credit, which is known as the solar feed-in tariff, is paid to you by your electricity retailer and is typically around 9 cents to 15 cents per kilowatt hour in Victoria. (It is worth shopping around for the best deal).
This solar feed-in tariff is in addition to the rebates described above.
The value of the feed-in tariff in Victoria ten years ago was around 60 cents per kilowatt hour, and for those lucky enough to sign up at that time, they are still getting this amount. Around 4-5 years ago, the value was 5 cents per kilowatt hour which made a lot of people think that solar really wasn’t worthwhile. However that was really a misconception because of the broader changes in the economics of going solar.
These days, with the current feed-in tariff, you’ll get the best return if you use as much of the power your system generates during the day rather than exporting it to the grid. In the solar ‘geek world’, it’s called maximising your solar self-consumption!
The main thing to take away from having read this article (and thank you if you’ve stuck through to the end!), is to understand that the financial rationale for going solar is really strong for most Victorian households. That’s because:
- The cost of solar PV systems has fallen by around 80% in the last 10 years
- The federal ‘rebate’ reduces the amount you pay, by around 30%.
- The state rebate reduces your upfront costs still further (up to $1,888 for the rebate and an additional $1,888 for the interest-free loan)
- You still get credits – i.e. the feed-in tariff – for the solar you export to the grid and these have gone up by around 100% compared to the low point of 5 cents per kilowatt hour 5 years ago.
For a correctly sized and designed system, most households would be looking at a payback of between 4-7 years without the state rebate and 3-5 years with the state rebate.
For more information about the bulk-buy
If you would like to find out more about the Mallee Sun Solar Bulk Buy and request an obligation-free quote, please call us on 1300 466 274 or fill in the ‘request a quote’ form on our website.
Central Victorian Greenhouse Alliance (the owner/organiser of the Hepburn Solar Bulk Buy)