Solar Incentives – Who – Why and How Much?

The more people I talk to about solar power, the more I find that there seems to be some confusion regarding what is commonly known as the ‘Government Rebate for Solar’. Firstly, it is an incentive, not a rebate.

Hopefully by reading this article you will understand the ‘Solar Incentive’ and be aware of the benefits available to you.

The first thing to recognise is that the incentive is not actually paid by the Government. It is not taxpayer funded.

The reason it is referred to as the Government incentive, is because it is part of the government legislated Renewable Energy Target or RET.

The RET was introduced by the Howard Government as a means of reducing emissions from coal fired electricity through the installation of renewable energy systems and as an incentive to help the solar industry get on its feet.

The target is aimed at the large electricity retailers, the ones that sell you your electricity, such as AGL, Origin, Energy Australia and so forth.

These entities are required under the legislation to purchase a certain amount of the electricity they sell you from renewable sources, such as rooftop solar.

The scheme is a market based scheme, where householders create green certificates for every KW of solar they install on their roof.

These certificates are sold on the renewable energy certificate (RECS) market and are purchased by the legal entities to meet their requirements under the legislation.

More information can be found here:

So what is the benefit of this scheme to homeowners wishing to install solar power?

Well, for each kW of solar that you install on your roof you will receive a certain number of certificates.

This is how it’s calculated:

System size (In kW) x 15 years (this is the time period designated) x Solar Multiplier (this is different across Australia, we get more sun than Tassie, so therefore we create more energy)

I will use a 3kW system in Peregian Beach, on Queensland’s Sunshine Coast as an example.

3kW x 15 years x 1.382 = 62.19 certificates created.

Each certificate is sold on the market at around $38-$39 per certificate.

Therefore; 62 x $38.50 = $2,387.

That is how much your solar system costs will be reduced by the RET.

For a 5kW system it’s $3,965.50 and for a 10kW system $7,969.50.

Almost always; the prices quoted by solar companies will have the solar incentive deducted already.

This is because solar companies are already set up to sell these certificates on your behalf. All you have to do is sign a form to transfer your certificates over to the solar company.

The RET is legislated to continue until 2020, when the scheme will be reviewed. Considering the scheme has resulted in installed solar prices falling dramatically over the last 5 years, it’s hard to see how this scheme will be continued. So if you want to benefit – get solar installed before then.

Another incentive is the Feed in Tariff.

This is the amount of money per kWh your electricity company will pay you for the extra energy you send back into the grid.

In Queensland the Government had initially set the feed in tariff at 44c/kWh and the electricity retailers would top that up by another 8c/kWh.

However an unintended consequence of this policy was that thousands of solar owners took up this offer, Costing the Government and the electricity companies millions of dollars.

This scheme has been reduced now- solar owners can still benefit however by selling power back to the grid at between 6c/kWh and 10c/kWh (check with your electricity retailer).

Hopefully this makes things a little clearer. If you have any questions why not drop us a line 0481 069 028 – or an email: