Solar Rebates

Under the solar rebate program anyone installing solar power is eligible for three times the carbon credits (known technically as Small-scale Technology Certificates or STCs) on the first 1.5kW of solar panels they install. This three times ‘multiplier’ solar rebate is locked in until 30 June 2012, after which is drops to a multiplier of 2. Put simply? Here’s how the solar rebate works. Assume you live in Victoria and you purchase a 1.5kW (8 panel) solar power system. If the solar rebate multiplier was ‘1’ then your solar power system would be eligible for 27 STCs. However, as the solar rebates multiplier is ‘3’ your solar power system is eligible for 81 STCs. Assuming an STC price of $25, your solar rebate is 81 x $25 = $2025 in rebates.

The larger the solar power system, the bigger the solar rebates you receive. And better still, this solar rebate is not tied to income or limited to households – businesses can also take advantage. The actual solar rebate amount may also be higher than this depending on the STC price, which fluctuates up and down depending on market conditions. Importantly with Neco, your STC price is locked in at the time you place your deposit - other providers can vary the STC price up until the day of installation, which can leave you exposed if the STC price drops suddenly. Read the terms and conditions of your quotes carefully!

Let’s say you purchase power from your electricity retailer for 25 cents per kilowatt. Just as you must pay for electricity supplied to you by your electricity retailer, so too must your electricity retailer pay you for the solar electricity that your solar power system supplies to the grid. The rate you receive for solar power supplied to the grid is usually the same rate you buy it at – and sometimes higher. If you export enough solar power, you can eliminate your power bill and even make money! These are called feed-in tariffs.

Here’s an example. Let’s say you use 20kW of electricity a day, and you pay $0.20 per kW. The cost of electricity per day is $4.00. Now let’s say you install a solar power system that produces 10kW of electricity per day, between the hours of 8am and 4pm. Between those same hours, you use 5kW of electricity. Based on this, you will use 5kW of solar electricity in your home (saving 5kW x $0.20) and you will export 5kW of solar electricity to the grid (earning you 5kW x $0.25). Add the savings and earnings together, and your use of solar power will save you $2.25 per day, and reduce your power bill by 56%. Your Neco quote will tell you more about how much you could save/make from solar feed-in tariffs.

How many investments pay for themselves? A new car? Nope. That new flatscreen TV? Nope. That new designer outfit? Nope. But solar power is different – a solar power system will pay for itself, and then continue to make you money after that. Continuing on from our example in solar power feed-in tariffs, let’s say the solar power system producing 10kW a day cost its owner $7,000 after solar power rebates. We know that this solar power system will save its owner $820 a year. Based on this, the solar power system will pay for itself in 8.5 years ($7000/$820).

If the owner is able to reduce the amount of electricity they use between 8am and 4pm (thereby maximising the amount of solar power they export to the grid) the payback period could be even less. Rising power prices will also further reduce the payback period. And the news gets better. After the solar power system has paid for itself, it will continue to save its owner $800 or more a year up until around 25 years. That’s 16.5 years x $800 = $13,200 in tax-free income for the owner, in addition to the $7,000 already recouped on the purchase price. A $20,200 return on $7,000 - not bad! It certainly makes having a solar home pretty enticing.