Why Get Solar Panels Sooner?

Posted on December 28, 2018

Solar panels not only save substantially on power bills, but the longevity of the panels ensure they pay back their own cost within 20-25 years of installation. Added to that are the various subsidy schemes like STCs offered by the Australian government that make installing solar panels a prudent decision.

But for those who are yet to install solar panels, time is running out for availing the subsidy.

What are STCs?

STCs (Small-scale Technology Certificates) are certificates issued by the government to homeowners and businesses for installing solar panels. Each certificate has a dollar value and the size of the solar panel system you install determines the number of certificates you are eligible for.

The subsidy is calculated by adding the value of the total number of STCs you get. This amount is deducted (or offered as a subsidy) from the upfront cost of installing your solar panel system. The dollar value of STCs fluctuates depending on the dynamics of demand and supply in the market.

How STCs Make Solar Panel Installation Affordable

The benefit offered under the STC scheme has played a great role in the boom in the use of solar panels across Australia. As mentioned above, each certificate has a dollar value. So for example, if you plan to install a 5.3kW solar system, you are eligible for 105 STCs under the present subsidy scheme. If the value of each STC is $35, it equals to a subsidy of $3,675. This is quite a substantial amount that’s shaved off from your initial investment cost.

Decrease in Subsidy from January 2019

However, the Small-scale Renewable Energy Scheme of Australia has announced that from January 2019 onward, it will substantially reduce the subsidy being offered presently through STCs. This will apply to all households and businesses across the nation. The subsidy offered will be reduced gradually over the next twelve years until it is completely phased out by 2030.

So in the example stated above, you will be eligible only for 97 STCs from next year instead of 105 STCs. Assuming that the value of a certificate remains the same, you will be getting $3,395 as subsidy instead of $3,675.

As the reduction in subsidy continues, you will be eligible for 65 STCs after five years and only 24 STCs after ten years for the same 5.3kW solar system. By the year 2030, there will no longer be any STCs.

So if you are planning to install a solar panel system, do it by December this year to avail the maximum subsidy.