The solar rebate in Australia was created to help residents purchase solar panel systems at reduced prices and fuel the transition to renewable energy. The program is about to enter its 10th anniversary and has, so far, enabled thousands of Australians to switch to green energy or reduce their dependence on the grid. However, this program has a fixed timeline that will end at a specific date.
The Australian solar rebate will be closed at the end of the year 2030 as scheduled by the government.
Australian resident are enjoying $3,600 refund on average according to Go Solar Quotes, which brings the ROI time down to just 3 years.
There is a lot of chatter around the internet regarding the approaching ending date for the Australian solar rebate. While it’s not accurate to use the deadline as a way to push you to rush and make your purchase, it’s also true that the longer you wait, the smaller the rebate you will receive when you eventually buy your solar PV system. Here is why:
The Australian rebate is, in the actual sense, a time-limited partnership between solar PV retailers and the government to offer solar panel systems to Aussies at a reduced fee. The rebates will be advanced to you as a point of sale discount but the retailer will receive small-scale certificates that they can sell on the open market to recoup their money.
Every year, the number of STCs you can receive for any size solar panel system will reduce based on the years remaining to the end of the rebate in 2030. While it might appear like a negligible reduction (1 year) it’s actually quite a significant reduction if you calculate the amount in cash reduced each year.
Let’s take an example of a standard 5kw solar panel system bought in 2022 in New South Wales versus the same system bought early 2020. How much would such a system attract in rebates between the two periods?
Deeming period= 10 years
Size of solar PV system= 5kw
Zone rating =1.382
Number or small-scale technology certificates received= deeming period x Solar panel system size x zone rating = 10 x 5 1.382.
This system will be eligible for approximately 69 small-scale technology certificates if bought in 2020 and in New South Wales which happens to be in zone three according to the STC zoning map. Going by current STC rates of $39.40 per certificate, you would receive a rebate of around $2,718 for such a system.
However, there are other things you need to consider when you are thinking about how the remaining time might affect the amount you get as a rebate for your solar panel system purchase. Here are some of them.
The STC value is a dynamic figure that depends on the supply and demand for solar energy in Australia and to some extent also the demand for small-scale certificates by the target market who happen to be the fossil fuel companies. This means STC values will decrease significantly when solar energy uptake is high and less demand for fossil fuels as we move towards the 2030 deadline.
Looking at it from this angle, it would be better to make your solar purchase sooner rather than later. However, there is no telling what the STC value will be in the future and if more people will move towards solar energy before 2030.
Solar Panel Prices
It has been reported and also proven that solar panel system prices could reduce in the next few years, at least in Australia. Therefore, it would seem logical to wait for a few more months or years and catch the market when the prices are low. However, there is no telling whether these projections are right and if the reduction in prices would be significant enough to cover the amount lost in rebates at that time.
Possibility of An Extension
The last thing you may consider is the possibility that the rebate scheme will be extended for a few more years. The main goal behind the solar rebate was to help the country inch closer to its green energy goals by 2030 in line with global environmental resolutions to cut dependency on fossil fuels.
As it stands today, Australia is still relying quite heavily on fossil fuels even though some regions such as Victoria have managed to increase solar energy uptake by significant margins through local incentives. However, the fact that there might be a possibility of an extension does not negate the fact that you will receive less in rebates every year until the end of the rebate.
Should I Buy My Solar Panel Now or Wait?
There is no need to panic about the solar rebate ending as there is still sufficient time between now and the year 2030. You should only buy your solar system if you have the money to pay the deposit after the rebate has been deducted and when you feel ready.
That said, keep in mind that you may receive less in rebates if you wait for more than a year. At the same time, those in states such as Victoria that have state-level rebates should time their purchase to take advantage of both the STC rebates and the local rebates. The time you choose to purchase your solar system ultimately comes down to you and how much you are willing to spend on solar energy.
FAQ: Do Solar Panels Give You Free Electricity?
All the energy generated by your solar panels is free to use at all times even if you have a grid-connected system. In Australia, you could even sell your surplus energy to your electricity retailer and have your normal electrical bill credited every month. Of course, you still need to consider the payback period which is the time between when you purchase a solar PV system and when it generates enough “free electricity” to recoup that initial investment.
To take advantage of your solar panels, ensure you use the generated energy during the day and find a retailer that has good feed-in tariffs if you have a surplus.