What is a Solar Rebate?

A S.T.C is a Small-scale Technology Certificate, an electronic form of currency.
You are entitled to receive STC’s when you install a solar power system as you will generate power from a renewable source.

You usually assign this to the seller of the system, so that you receive an upfront discount to the value of the STCs (eg. $4000 for a 5kW system).

(as explained by Finn Peacock – SolarQuotes) ‘If you buy a solar system today, it is subsidised by a government scheme worth about $700 per kW installed. That’s around $3,500 off a typical 5kW system, which is usually applied at the point of sale (i.e. any advertised prices you see almost certainly have the rebate already applied).
You may well remember the furore last year when the Renewable Energy Target (RET) was almost scrapped by the Abbott government. In fact, it was saved by only 1 vote in the senate.

If the RET had been scrapped the solar rebate would have gone with it, and solar would have increased in price by about 40%. The current legislation means that the solar rebate will start to reduce by one fifteenth every year from Jan 2017 until it drops to zero in 2032.

What most people aren’t aware of is that the dollar value of this ‘solar rebate’ could plunge at any time if demand for solar systems suddenly increases.

What that means is that if the market for solar runs hot, the value of the ‘rebate’ goes down in step with a thing called the ‘STC price’. The STC price can be valued from $0 to $40. In other words $40 is the highest value it is allowed to go to by law.

The higher the STC price the more ‘rebate’ you get.
At the time of writing the value of the rebate is $39.85. Let’s call it $40. So it is basically as high as it can be. This translates into a rebate of roughly $700 per kW installed. But if anything causes a rush on solar systems, the rebate is likely to drop.

How low could it go? The lowest it got to was a few year ago when it hit about $17. If it hits that again, the ‘rebate’ would be worth under $350 per kW installed. Just to be clear, no-one can pretend to know what the STC price will be next week or next year. All we do know is that it can not go any higher from here – it can either stay where it is or drop lower.