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Solar Credits Scheme

The Solar Credits scheme via its multiplier will offer discounts up to 75% off the full retail cost of a Solar Electricity System. The maximum benefit is achieved on a 1.5kWp system with significant benefits available on larger systems.

The Solar Credits multiplier will only apply to the first solar electricity system installed at the address.

Small scale renewable energy systems under the RET scheme

The Australian Government is supporting the deployment of renewable energy in Australia's electricity supply through the Renewable Energy Target (RET) scheme. The RET scheme guarantees a market for additional renewable energy generation, using a mechanism of tradeable Small-scale Technology Certificates known as STCs (backed by a legislative obligation). It is designed to ensure that 20 per cent of Australia's electricity comes from renewable sources by 2020.

The new RET laws includes the Solar Credits mechanism that boosts support to households, businesses and community groups that install small scale solar photovoltaic (PV) systems by providing an upfront capital subsidy.

What are Solar Credits?

The Solar Credits mechanism works by allowing eligible households, businesses and community groups at the time of installation to create STCs equivalent to the output of up to 15 years operation, and for the first 1.5kW of capacity installed, multiply their number by a factor of 3.

The scheme is designed to allow the system owner to transfer the right of STC creation to their system provider in return for a discount on the system price. This provides an upfront capital subsidy to the householder. The householder if they choose may create the STCs themselves.

Solar Credits are available for eligible systems installed on or after 9 June 2009. Solar credits only apply to the first 1.5 kilowatts (kW) of capacity installed. Generation from capacity above 1.5 kW is only eligible for the standard 1:1 rate of STCs creation.

I'm planning on getting a solar PV system installed on my home. How do I get Solar Credits?

Solar Credits are provided in the form of additional tradeable Small-scale Technology Certificates or 'STCs' for eligible small-scale solar PV, wind and hydro electricity systems installed or after 9 June 2009.

While system owners can create and sell the STCs themselves, in practice, providers of solar PV systems usually offer a discount on the price of a solar PV system in return for the Solar Credits.

How much benefit can I expect to get from Solar Credits for installing a solar PV system?

The 'Solar Credits' mechanism multiplies the number of tradeable STCs able to be created for new solar PV systems installed after 9 June 2009, thereby boosting the upfront discount.

The size of the Solar Credits discount is determined by the value of the STC (which may vary over time) and the number of STCs eligible for the small scale solar PV system. This is determined by the size of the system and its location. Generally speaking systems installed in northern Australia are eligible for more STCs than systems installed in southern Australia.

Solar Credits apply from 9 June 2009 and will be phased out by 1 July 2013. This recognises that technology costs are going down, and the Carbon Pollution Reduction Scheme, if introduced, will also be providing incentives for renewable technologies.

Level of support under Solar Credits

The level of support in terms of the number of STCs received via Solar Credits will be determined by the date the system is installed. The Solar Credits scheme is scheduled to be phased out by 1 July 2013 and the multiplier which determines how many extra STCs are received will gradually reduce during this period. The number of additional credits and the multiplier reduction schedule is shown in the table below.

Installation Period Multiplication
9 June 2009 - 30 June 2010 5 x
1 July 2010 - 30 June 2011 5 x
1 July 2011 - 30 June 2012 3 x
1 July 2012 - 30 June 2013 2 x
1 July 2013 onwards no multiplier

 

The timing of the phase-out means that Solar Credits will not adversely affect reaching the 20 per cent target by 2020.

Under the standard RET scheme rules, system owners can receive STCs for the lifetime generation of the system either upfront or over longer time periods of one, five or (in the case of solar PV systems) fifteen years (the so-called 'deeming period').

To assist with administrative efficiency and for maximum upfront assistance, the additional Solar Credits will only apply in the first time period that certificates are created for a system. This means that home owners can receive the maximum benefit of the solar system at point of sale, helping with the upfront costs of installing the system.

Small-scale Renewable Energy Scheme (SRES)

As of 1 January 2011, the enhanced Renewable Energy Target (RET) will be split into two parts, the Large-scale Renewable Energy Target (LRET) and the Small-scale Renewable Energy Scheme (SRES).

Owners of small-scale solar photovoltaic systems will have two options for gaining a financial benefit for their STCs including;

  • Follow the existing process of transferring the right for STC creation to their system provider in exchange for a discount at the time of payment. The system provider must specify the STC price they are offering and the respective Solar Credits discount.
  • Receive a guaranteed price of $20 for their certificates through a Small-scale Technology Certificate Clearing House. More details can be found on the ORER's website

Why do Solar Credits vary across the country?

The number of Solar Credits created for a system will depend on the amount of available solar energy and the renewable energy the system generates.

  • A solar PV system in Sydney, Perth, Adelaide, Brisbane and Canberra will create the same number of STCs and receive the same amount of support.
  • The same sized system installed in Melbourne or Hobart will receive fewer STCs as these areas have less sunshine so less renewable energy is produced.

What if I want to apply for Solar Credits myself?

Generally when installing solar PV systems, owners transfer the right to create STCs to their solar panel installer in return for a discount on the price of the system being installed.

Owners of solar PV systems installed from 9 June 2009 can access Solar Credits themselves, rather than transferring their Solar Credits to their installer in return for a discount off the price of the system. Owners can do this (generally through an agent) by applying to the Office of the Renewable Energy Regulator (ORER) any time within 12 months following the date of installation.

Small Generation Unit Owners Guide

Further information on accessing Solar Credits directly is available from ORER

How do I find out whether my system is eligible for Solar Credits?

The eligibility rules are prescribed in the RET scheme regulations, administered by the Office of the Renewable Energy Regulator (ORER).

Key rules are summarised below. Details of the rules are available on the ORER website

  • The system must be an eligible 'small generation unit'; being a solar PV system of up to 100 kilowatts (kW) capacity; a small wind turbine of up to 10kW capacity or a micro-hydro system of up to 6.4 kW capacity.
  • The system must be installed at an eligible premises. Examples include houses, townhouses, residential apartments and shops.
  • The system must be a new and complete unit.
  • There is to be no 'double-dipping' in relation to the Solar Homes and Communities Plan, the Renewable Remote Power Generation Program (RRPGP), or the National Solar Schools Program (NSSP). That is, a premises receiving a grant or rebate under any of these programs is not entitled to Solar Credits.
  • No more than one system at an eligible premises (address) is entitled to Solar Credits.
  • Solar Credits may only be created once for a particular installation, irrespective of whether the certificates are created for a 1-year, 5-year or 15 year deeming period. The system must have been installed no more than 12 months prior to the date of application for Solar Credits.

Detailed information on eligibility and processes for accessing Solar Credits is available on the ORER website of the Office of the Renewable Energy Regulator, who administers Solar Credits.

(Source: "Solar credits FAQs", Australian Government, Department of Climate Change and Energy Efficiency)