Last week, the solar industry protested outside the Victorian Parliament – with installers and retailers protesting against the Victorian Government’s Solar Victoria rebate scheme for households to install solar and batteries.
What? An industry complaining about government rebates and subsidies that make their products cheaper? What’s going on?
Well, as with most government incentive programs – and especially solar rebates and incentives, the intention is great, but often the way they are implemented has unintended effects.
What is the Victorian Solar Rebate Program?
The Rebate Program, run by Solar Victoria, provides means-tested rebates to households as follows:
- A rebate of up to $2,225 for a solar system (up to 50% of the system value); or (not and)
- A rebate of up to $4,838 (again up to 50% of the value) for a battery storage system connected to a solar system – but only in certain postcodes where the addition of batteries helps the grid.
There is also interest-free finance available on solar systems.
The Program is means-tested and to qualify, households must have an income of less than $180,000 per annum and a property value not exceeding $3 million.
So, What’s Wrong With That?
Well, plenty, as it turns out.
But not all of the problem is what the solar industry are complaining about – but more on that later.
First, a bit of background.
This program was initially set up in August 2018 and was announced with great fanfare.
It had several immediate effects:
- Lots (and lots) of households jumped on board to take advantage of this program (big tick);
- It effectively capped the price of a solar system at $4,450 because the rebate was promoted as a 50% rebate of $2,225. However, a solar system priced at $4,450 is right at the bottom end of the quality scale and is usually made up of cheap products, or uses a cheap installation;
- Many, many new ‘solar installers’ appeared literally out of nowhere to get their piece of this government-funded gold rush. These included suburban electricians (now ‘solar installers’), interstate solar companies, telemarketers, and all sorts of opportunists, trying to cash in on this new boom. Now, we would never mention ‘pink batts’ out loud, but if you were to think that, we wouldn’t argue. Naturally, this made life harder for the reputable and well-established solar installers.
On top of that, Solar Victoria was surprised by the number of households taking up the rebate offer (really?) and, without any notice, stopped it in April until the new financial year.
This left many in the industry, new and old, scrambling for business.
Solar Victoria then decided to cap the number of rebates available for the current financial year, only approving a limited number each month.
This sounds OK, except that the number of rebates that are approved is small – only 3,333 per month.
Because the rebate is available at all, the average consumer thinks that solar is now only worth it if they get a rebate – and therefore won’t buy solar unless they do get it – which most won’t (the August allocation was full in less than 90 minutes).
So, the rebate program designed to increase the uptake of solar power is actually having the opposite effect and slowing the industry down.
Can I Still Get the Solar Rebate?
Sure – but you would have to be very, very lucky.
We understand there are many, many months worth of open quotes backed up in the system – which need to be confirmed (a clunky and difficult process by all accounts) when the monthly allocations are released.
For the allocation of August – ALL allocations were taken within 90 minutes of opening and social media has been full of potential customers saying they couldn’t get any further than the spinning wheel you get when trying to load a web page.
Hence it is worth researching whether applying for, and waiting for, the solar rebate is even worth it – especially if you are buying a smart solar system that will last 20 or more years (which, trust us, most of the $4,450 ones won’t).
In fact, after an initial slow down, we have many customers deciding just that – that it’s not worth waiting for a rebate that they are unlikely to ever receive.
It is also possible, as is the way with these sorts of things, that sooner or later the rules will be changed, or the program altered, well before the average customer is successful at lodging their application.
What about the Battery Rebate?
The battery rebate of $4,838 is a fantastic initiative – but there’s a catch of course.
It is only available in a limited number of postcodes where batteries will help the grid.
If you do live in one of these postcodes, the battery rebate will be better for you to claim than the solar rebate. What often gets overlooked is that the Battery Rebate from Solar Victoria is more than twice the amount of the Solar Rebate – and gives customers a massive discount on, for example, a Tesla Powerwall.
So, if you already have solar – you can now buy a Tesla Powerwall for around $10,000 – a price that customers in the rest of Australia would jump at.
If you don’t already have solar, then buying a new solar system with a battery provides a much greater rebate than if you did just buy solar – so it is well worth looking into.
We applaud the Victorian Government for their intentions behind trying to accelerate the uptake of renewable energy, but we also believe the current Solar Rebate program is having the opposite effect.
However, we are finding more and more customers are now understanding the drawbacks of the program and are installing solar systems without the rebate – as in the long term this may make more financial sense anyway.
And, of course, if you are lucky enough to live in one of the golden postcodes (the ones where you are eligible for the battery rebate), then you should talk to us about whether a battery may be right for you.
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