NSW Solar Power Rebates – How it all works

There has never been a better time to buy a solar power system in NSW as system prices continue to fall and great government incentives are still in place for eligible households. In NSW there are two main financial incentives for installing solar panels:

 – Small Scale Technology Certificates– which can be used to reduce the purchase price of your system.

 – Feed-in tariff– an agreement with your energy retailer whereby you are paid for the excess solar power that you feed back into the grid.

Small-scale Technology Certificates (STCs)

Small-scale Technology Certificates (STC’s) – previously known as Renewable Energy Certificates or RECS – are created when a Renewable Energy System such as a Solar PV system is installed.

The number of STC’s depends on the predicted amount of energy generated and hence the larger the system the greater the rebate. In essence, one STC is created for every megawatt-hour of production capacity of the system.

This is further multiplied by the number of years the system is likely to generate energy (for home solar systems, this is usually 15 years, although the life of the solar panels themselves is considerably more than that).

System OutputSTC’sRebate
2kW34$1122
3kW49$1617
5kW84$2772
10kW169$5577

* Based on an STC price of $33 for a solar system installed in 2019.

What does this mean for me?

Your solar power installer will normally reduce the purchase price of the system by the value of the STCs created by your system. There is no additional paperwork, and you receive the value of the STCs at the current market price.

STC Price

The system for trading and pricing STCs for small systems is managed by the Small-scale Renewable Energy Scheme (SRES).

STCs are bought by Liable Parties (usually electricity retailers) and must be surrendered at the end of each quarter. As the number of STCs that are required to be surrendered is a fixed amount each year, but the number of STCs created is variable, the price paid for STCs also varies and is determined by supply and demand.

The Federal Government legislated in 2010 a fixed price for STCs by implementing a Clearing House system where STCs can be bought and sold for $40. However, there is no requirement for Liable Parties to purchase from the Clearing House, so they are likely to only do so if there is a shortage of STCs or the market price exceeds $40. There is currently a surplus of STCs in the market which means the market price of STC’s below $40.

Feed in Tariff

In NSW all new grid-connected solar systems have Net Metering, where the solar power that is generated is fed into the home to help reduce your reliance on the grid. Because electricity has to be used immediately, any power that is not used in the home is automatically fed out to the grid. This power is bought by your energy retailer and you are paid a feed in tariff, which is reflected on your power bill.

The Independent Pricing and Regulatory Tribunal has stipulated that t a fair and reasonable value for excess solar power exported to the grid is in the range of 7.7 to 12.9 cents per kilowatt-hour. For example, if you have a 5kW system and you export all of the power to the grid on a typical Sydney day, you will receive a credit of approximately 20kW/h x 8c = $1.60.

What happened to the old 60 cent feed in tariff?

The 60 cent feed in tariff was a part of the State Government’s Solar Bonus Scheme that closed to new applicants in 2011. These systems had Gross Metering where all of the solar power is fed directly into the grid, and households were paid a feed in tariff for all of the power generated. At the time, residential solar power systems were prohibitively expensive to install, and this state rebate was extremely successful in encouraging households to install solar systems and help grow the solar industry. As a result, we have seen a dramatic reduction in the cost of installing a solar system.

Why should I consider solar now that the Solar Bonus Scheme has finished?

The benefit of a solar system is no longer in the feed in tariff, but rather in reducing the amount of power you buy from the grid. This is why it is vital to speak with one of our consultants to help you size up a system to reflect your daily energy patterns. Time of day metering is now being rolled out across the Ausgrid network, which means that during the peak period between 2pm and 8pm, you will be saving close to 52c for every kWh of solar power your system generates. System prices continue to fall, and coupled with the federal government’s STC incentive there has never been a better time to buy a solar system for your home.

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