Solar Energy Rebate

In recent years the Federal Government has realized the importance of investing in the renewable sector and has recently committed to reducing our greenhouse emissions by 20% by the Year 2020. A large chunk of this investment is directed toward the solar industry in the form of Renewable Energy Certificates (RECs) and a state by state Feed-In Tariff (FIT). They have stated from the start that this funding is not going to be lasting forever and once a particular point in time, or figure of output is achieved, the funding will be closed. Below we’ve outlined in more detail the Governments fiscal support of your solar investment.

 

1. Renewable Energy Certificates (RECs)

Renewable Energy CertificateThe Government’s largest single residential investment in solar takes the forms of Renewable Energy Certificates, these are solar credits which either reduce the upfront cost of your machine or allow you to trade yourself post solar installation.

In the majority of cases, solar consumers tend to take the former option, where their solar installer looks after their credits and reduces the price of the machine accordingly, this is more convenient, quicker and means a lot less paperwork. If you choose to pay the full price for the machine (which could be an extra $7000 or more) you can then sell these credits back to your electricity provider yourself by completing the appropriate application forms. This allows you full autonomy over how and when you sell these credits, however, this can be a very labor intensive, time consuming alternative, it’s generally best to leave it to your solar installer who have teams of people to manage this and sell back in larger volumes.

Solar credit rebate levels are based on two variables; what zone your house is in and REC values. Different cities receive different level of sunshine, and hence a zone map is formed to determine the value of each credit in any particular area. See zoning map below…

Solar zone, solar zoning

 

 

There is currently a 4 time multiplier in place for your RECs, this is reducing every year until the multiplier is removed completely in 2014.

  • 5 to 4 on 1 July 2011;
  • 4 to 3 on 1 July 2012;
  • 3 to 2 on 1 July 2013; and,
  • 2 to 1 from 1 July 2014.

 

 

Assuming a REC value of $40 and a solar system of 5kw, the below figures give you an indication of what the recent drop has done to the RECs that you or your installer sells back to the Federal Government.

  • Adelaide – $6,200 (2010/11); $4,960 (2011/12)
  • Brisbane – $6,200 (2010/11); $4,960 (2011/12)
  • Canberra – $6,200 (2010/11); $4,960 (2011/12)
  • Darwin – $6,800 (2010/11); $5,440 (2011/12)
  • Hobart – $5,320 (2010/11); $4,160 (2011/12)
  • Melbourne – $5,320 (2010/11); $4,160 (2011/12)
  • Perth – $6,200 (2010/11);  $4,960 (2011/12)
  • Sydney – $6,200 (2010/11); $4,960 (2011/12)

There is going to be a similar drop in July of 2012, so there really is no better time than right now to convert your home to solar.

 

 2. Feed-in Tariffs (FIT)

We go into more detail on the next page in regards to the Feed-In Tariff but in short FITs reward you for any excess electricity that you send back to the electricity grid. Once you have your solar system installed and properly connected you will then be in a position to earn money from the excess electricity you send back to your provider. Each state has different amounts they provide and how this amount is calculated (net or gross), but again, these FITs are being reduced and will continue to be reduced in coming months, so time is of the essence.