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Save money on solar: Australia’s residential solar rebates and incentives 2021

Here are the financial benefits of installing solar panels and battery storage in your home
solar rebates and incentive australia
Solar panels on suburban house roofs in Melbourne, Australia

Solar power installations across the country have increased despite the pandemic. According to the Australian Energy Council, there were a total of 2.4 million solar systems installed during the first quarter of 2020 and it went up to 2.56 million by the end of Q3. This is not only because the environment is a major concern to the 77% of Australian households. It is also because of the following factors:

  1. Homeowners wanting to beat the rising costs of electricity
  2. The sustained price reduction of residential solar panel systems
  3. The very little need for council and government approvals when installing residential solar panels, and
  4. The rebates and incentives that homeowners can avail when they power their homes with solar energy

Here, we’ll discuss the biggest concerns that you and most homeowners have about going solar: the price of installing solar panel systems in your home and how to qualify for the government rebates and incentives to make solar more cost-effective. 

Average cost of solar panel installation decreases

The company Solar Choice publishes a monthly solar price index. The table below is their record showing the decreasing price of solar panels over the last five years:

solar rebates and incentives
Average price of solar panel systems 2012-2020. Image credit: Solar Choice Australia

Spending less than a dollar per watt, these are the approximate retail prices of a solar panel system in every city as of January 2021:

solar rebates and incentives
Image credit: Solar Choice Australia

For more information, read Solar Choice’s monthly solar panel price index.

The prices above already include the discounts from small-scale technology certificates or STCs, which will be discussed later.

What’s more exciting is that many people working in the solar industry expect bigger improvements in solar panel design and solar cell efficiency in the coming years. These improvements will not jack up the price of solar panel systems though. Experts foresee a continuous reduction in prices in the near future due to more efficient manufacturing processes. This great news for Aussies who want to switch to solar energy this year.

Federal solar rebates and incentives for homeowners

There are two key rebates in the country that apply to residential solar installations: the Solar Credits Program (a.k.a Government Solar Panel Rebate) and the Solar Feed-in Tariff.

There are rebates and incentives offered by the state governments too. 

Let’s take a look into these incentives one by one:

Solar Credits Program / Government Solar Panel Rebate

Under this initiative, you can be eligible for small-scale technology certificates (STCs) for every megawatt-hour of renewable energy that your solar panel system can produce until 2030. 

These STCs are like discount vouchers which you can use to offset the price of your solar panel installation. 

To be eligible for STCs, your solar panel system must:

  1. Produce less than 100kW
  2. Use government-approved solar PV panels
  3. Be installed by a professional electrician

This year, clearing houses value STCs at $40 each, but prices get lower or higher than that, depending on the market demand.

Availing STC discounts

You generate STCs when you buy a solar panel system. You have an option to pay the full price of the photovoltaic (PV) system upfront and personally register your STCs to the Renewable Energy Regulator, then wait for reimbursement.

There is also a way to get an immediate discount. There are solar panel installers who are also registered STC selling agents. Most of them send quotes with the STC discount already deducted from the price. You will assign STC credits to them when you buy from them. They will register these STCs and recoup their value later.

Calculating your number of STCs and discount

Your total rebate will depend on the number of STCs you generate. 

The number of STCs that you will get depends on three factors: 

  1. Output of your solar panel system
  2. Your location, and
  3. Year of installation

There is a formula that you can use to calculate the number of STCs that you will generate and the maximum discount you can get, however, most people use the STC calculator by the Clean Energy Regulation and Solar Quotes’ Rebate Calculator instead. These two calculators are easy to use and very accurate. 

If you want, you can manually calculate your STCs and your rebate using this formula:

Solar panel system size (kW) x Postcode Zone Rating x Deeming Period

Location affects the value of the rebate. This initiative divided Australia into four zones. The zoning depends on how strong the sun shines in that area and how much electricity a solar panel system can generate in that location. Areas in Zone 1 receive more sunshine than areas in Zone 4.

Refer to the colour-coded map below or look up your postcode here to figure out which zone you belong. Each zone has a corresponding postcode zone rating.

  • Zone 1 – 1.622 rating 
  • Zone 2 – 1.536 rating 
  • Zone 3 – 1.382 rating
  • Zone 4 – 1.185 rating
solar rebates zoning STC australia

Multiply your postcode zone rating with the size of your solar panel system in kilowatt hours to get your system’s annual capacity.

Multiply the result with the deeming period. In 2021, the deeming period is 10. In 2022, it will be 9. It winds back every year until 2030, the year when the program is scheduled to end. 

Round down the result and that’s the number of STCs you’ve created. 

Multiply that with the current value of every STC (more or less than $40) and you’ll see how much money you can save.

Sample calculations:

if you have a 6.6kWh system & STCs costs $35:
ZoneRatingxSystem Size (kWh)Annual Generation (mWh)xDeeming Period (2021)STCs GeneratedTOTAL REBATE
11.622 6.6 10.7052 10 107 $ 3745
21.536 6.6 10.1376 10 101 $ 3535
31.382 6.6 9.1212 10 91 $ 3185
41.185 6.6 7.821 10 78 $ 2730

State government solar rebates

Aside from getting STC discounts, homeowners can also apply for their state government’s solar rebates and incentives. 

For ACT residents:

The ACT government offers the solar for low-income program, an incentive that grants ACT homeowners a subsidy up to 50% of the total cost of a solar panel and battery system (capped at $2,500). You can also get an interest-free loan to pay off the remaining balance in three years.

You will qualify for this incentive if you are an ACT homeowner who holds an Australian Government Pensioner Concession Card and doesn’t have rooftop solar PV installed yet.

You can also get a discount when you add a battery to your rooftop solar panel system, thanks to the Next Generation Energy Storage Grant. The discount varies depending on the size of your system and the installer. 

For QLD residents:

The QLD government offers interest-free loans and grants when you  purchase and install solar panel systems and solar batteries on your property. There are three packages available and you are only eligible for one of these:

  1. loans for solar panel systems
  2. loans + grant for battery storage
  3. loans for combined solar and battery

For VIC residents:

You can apply for a solar panel rebate of up to $2,225 and if yours is a 4kWh solar panel system, you are eligible for a four-year interest-free loan to repay the remaining balance. 

For NSW residents

There is the Empowering Homes Program which supports the installation of solar panel and battery storage systems in thousands of households across the state. If you participate in the program, you can apply for a zero-interest loan when you purchase a solar panel and battery system. 

For SA residents:

The government understands that installing a solar panel and battery system can be expensive, which is why they offer subsidies and loans up to $6,000 under the Home Battery Scheme. Low-income households can apply for a higher subsidy to help them switch to solar power.

For WA and TAS residents:

Solar rebates here are limited when compared to other states. Other upfront rebates that are beyond what’s given by the federal government are not available. 

The good thing is that STCs are not the only form of solar rebate by the federal government. There is a buy-back scheme that many households across the country (especially in Perth, WA) take advantage of. 

Solar feed-in tariffs

When you install solar panels in your home, you have an option to pump electricity back into the grid and get paid for it. This is called the feed-in tariff scheme. You can take advantage of this if you want your solar panel and battery system to pay-off.

How the solar feed-in tariffs work

There are two schemes:

  • Gross FITs – Here, all the energy that your solar panel system generates will be pumped to the grid. You will be paid at a premium rate, but you will pay for the electricity you consume like everyone else. It’s like a solar power plant, but using rooftop solar panels to generate power for the community. 
  • Net FITs – Here, only the excess energy generated by your solar panels gets sent to the grid. This option allows you to really see how much money you saved on your electricity bill when you switched to solar. The potential money from this depends on how little or how much electricity you use to run your house. 

Solar feed-in tariff information per state

Rules regarding solar feed-in tariffs vary in each state and territory. The amount of money per kWh is set by your state government, but if you have multiple electricity retailers in your area, you will see a difference between their buy back rates. 

Our friends from Solar Quotes Australia have published more detailed information on feed-in tariff rates. They have explained the terms and conditions of this scheme in each state and territory as well. Read it here for more information.

One thing is for sure: previously the buyback rates were higher than today. However, this shouldn’t discourage you from investing in and installing solar panels and battery systems in your home. 

It may take 2-5 years before you can actually recoup the money spent on the system,  however, you wouldn’t feel sad once you saw how much you saved on your electricity bills!

Residential Solar Rebates and Incentives
Aerial shot of solar panel technician installing solar panels on roof on a sunny day.

Is home solar power worth it this 2021 onwards?

Yes! Using solar power to run your home is one of the best things you can do this year. 

If your concern is more about financing this, look into the federal government’s solar rebate program, the feed-in tariffs, and your state governments’ interest-free loans. These programs and schemes make solar power more accessible to us.  

If you are about to build a new home or replace your roof as part of your renovation, we encourage you to factor in solar panel installation. Trust us, this is the perfect time to create a sustainable and energy-efficient home.

  • Your designer will make sure that the entire house will be energy-efficient. Solar power alone slashes the cost but won’t decrease your electricity consumption. Factors such as your home’s orientation, insulation, window placement, etc. also matter. For more information, read our article about what makes an energy-efficient home.
  • Installation costs are lower when solar panels are incorporated in the roof design rather than retrofitted.

If you’re planning to sell the property in the near future, we have great news. Roof solar panels and solar batteries are features that will pull the property’s price up. Energy-efficiency is a huge selling point for future buyers.

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