Solar incentives in Australia 2020

Published: 18 February 2020

Australia offers a mix of favourable conditions for solar power. The country is very sunny, which makes solar panels more productive. Local electricity rates are also among the highest in the world, which increases the savings per kilowatt-hour produced. In addition, there are many solar incentives and incentives that make solar panels more affordable and easier to purchase.

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The STC Scheme Overview

In Australia, there is a national incentive program called the Small-scale Renewable Energy Scheme (SRES). The benefit applies for solar panels, solar water heaters and heat pump systems. Depending on the state or territory where you live, additional incentives may be available from the local government.

Find out more about Australian solar incentives in 2020:

How does it work?

There is a wrong belief that Australian solar incentives ended in 2019. Actually, the government only lowered the incentive amount slightly, but the program will continue to exist until 2030. The annual reduction in incentives is a normal part of how the program works.

  • The incentive depends on the total energy output between the year in which the solar system starts operating, and the end of 2030.
  • For solar power systems installed in 2019, the incentive was based on 12 years. Since the start of 2020, the deeming period for the incentive has been reduced to 11 years. However, this only represents an 8.3% reduction.
  • For every 1,000 kilowatt-hours of estimated production, the system gets a small-scale technology certificate, or STC. These STCs can then be sold at a price of around $35-$40 each.

For example, a 6-kilowatt solar power system in Queensland earns around 91 STCs if installed in 2020. Assuming each STC is sold at $40, the total incentive is $3640, which is equivalent to $607 per kilowatt. If the sales price of the 6-kW solar system is $9500, the net price after the incentive is only $5860.

The STCs earned by your solar power system depend on two things: the system size and your location. Larger installations get more STCs, simply because they produce more electricity. Assuming an equal capacity, solar systems in sunny places get more STCs for the same reason – the extra sunshine makes them more productive.

2020 Solar Incentives by State

In addition to the Small-scale Renewable Energy Scheme, some incentives are available at the level of states and territories. These are determined by local governments, and they are applied independently from the national incentive program. The following table summarises the solar incentives by state, along with other incentive programs and benefits.

State or TerritoryLocal Incentive Programs
New South Wales The NSW Empowering Homes program offers loans of up to $14,000 for solar battery systems, and up to $9,000 for adding batteries to existing solar PV systems. The benefit is available for households with an income of up to $180,000 per year.Solar for Low Income Households is a program currently on trial, which will give 3-kW solar systems to 3000 homes in specific areas of NSW. The program is available for holders of a Pensioner Concession Card or a Department of Veterans’ Affairs Gold Card.
Queensland The QLD Solar for Rentals program offers incentives of up to $3,500 for landlords, if the installation is completed before June 30, 2020. However, this is a trial program with limited funding. The GLD government also offers interest-free loans for solar power and energy storage systems.
Victoria VIC offers a solar panel incentive of up to $1888, a solar battery incentive of up to $4838, and a solar hot water incentive of up to $1000. The benefit applies for households with an income below $180,000 per year, and an assessed property value below $3 million.The solar incentive can be combined with an interest-free loan up to $1888, which must be paid within four years. There are no equivalent loans for solar batteries and hot water systems.
Western Australia WA does not offer solar incentives and incentives, beyond the federal STC program.
South Australia SA offers an incentive of up to $6000 for energy storage, through the Home Battery Scheme. Low-interest loans are also available to complement the battery subsidy.
Northern Territory NT does not offer solar incentives and incentives, beyond the federal STC program.
Tasmania TAS does not offer solar incentives and incentives, beyond the federal STC program.
Australian Capital Territory The ACT Solar for Low Income Program offers a solar power subsidy of up to $2500.The Next Generation Energy Storage program offers a battery incentive of $825/kW, for systems up to 30 kW.

Panel Incentives

Solar panel incentives reduce the upfront cost of going solar, and this shortens the payback period while increasing the return on investment.

The Small-scale Renewable Energy Scheme, which was described above, is the main solar panel incentive program in Australia. Being a nationwide incentive, it applies regardless of the local regulations from state and territory governments.

  • Eligible solar power systems get STCs based on their estimated energy production between 2020 and 2030.
  • One STC is claimed for every 1,000 kWh of estimated production, and the incentive amount per STC is from $35 to $40.

Additional solar panel incentives are available in some states and territories. They were listed previously on the state sections, but they are summarised below for convenience:

  • Queensland Solar for Rentals: Up to $3,500 for landlords who install solar panels.
  • Victoria Solar Homes iIncentive: Up to $1,888 per solar installation
  • ACT Solar for Low Income Program: Up to $2,500 per solar installation

Local solar incentive programs are combined with the national incentive from the Australian government, reducing the cost of solar panels even further.

Battery Incentives

Battery systems are an excellent complement for solar panels, since they eliminate their main limitation. Solar panels have a variable energy output – they become less productive with clouds, and unproductive at night. However, when batteries are added, they can store electricity for times when solar panels cannot generate it.

Australia does not have national solar battery incentive, but some state governments have already introduced them:

  • Victoria Solar Battery Incentives: Up to $4,838 per battery system.
  • South Australia Home Battery Scheme: Up to $6,000 per battery system.
  • ACT Next Generation Energy Storage: $825 per kilowatt, up to 30 kW.

Read our 2020 Solar Battery Incentives Article – HERE

Hot Water Incentives

The Small-scale Renewable Energy Scheme also offers STCs for solar hot water systems and heat pumps. Since these systems save electricity instead of generating it, the STCs are calculated based on the estimated savings. However, the end result is similar to that of the solar incentive: solar water heaters and heat pumps become more affordable thanks to the STCs.

The Victoria Solar Hot Water Incentive is the only state program that applies for solar water heaters, and it offers up to $1,000 per heating system.

Am I Eligible for a Solar Incentive in 2020?

The federal incentive for solar panels applies for all installations that meet the following conditions:

  • The installation must be completed within the 12 months before the Small-scale Technology Certificates (STC) are created.
  • Meeting Australia and New Zealand standards, and any local requirements that apply at the state, territory or municipal level.
  • Using solar panels and inverters found on the Clean Energy Council list of approved components.
  • The maximum installed capacity is 100 kW, and the annual production must be less than 250,000 kWh.
  • The system must be installed by a Clean Energy Council accredited solar contractor.

These requirements apply for all solar power systems in Australia, regardless of their location. When additional incentives are available from the local government of a state or territory, these have their own requirements as well. For example, some are limited to certain cities, while others target households below a certain income threshold. The eligibility requirements are published on the official government site that covers each program.

How to Claim a 2020 Solar Incentive

As mentioned above, the requirements for solar incentives in Australia vary depending on the specific program. However, you must get the benefits approved for your solar power system before proceeding with the installation.

The Australian Clean Energy Regulator provides both installation requirements and documentation requirements before a solar power system can earn STCs. However, these requirements are easily covered by working with a qualified provider like Instyle Solar.

With respect to the STCs, you can assign them all upfront to a registered trader, or you can claim and sell them on your own over time. However, using a registered agent is easier, and you can claim a large incentive upfront. On the other hand, when STCs are claimed and sold directly by the solar system owner, the financial benefit is spread between the installation year and 2030.

Solar Power Feed-In Tariffs

The solar feed-in tariff is the amount you get paid for every kilowatt-hour that is not consumed and exported to the local power grid. However, an FIT can also be considered a type of incentive in some cases: if the payment for each kilowatt-hour is high, the business case for a solar power system improves.

Feed-in tariffs are normally equal or less than the electricity retail price. Around the year 2010, some FITs in Australia were higher than the kilowatt-hour price, and in these cases the best option was exporting 100% of your electricity production to the grid. However, these FITs have been phased out.

The exact FIT depends on your electricity provider. However, the minimum FIT is normally established by the local government at the state or territory level. The following table summaries the range of FITs currently available in Australia:

State or TerritoryMinimum FITMaximum FIT Available
New South Wales Solar Power Feed-in Tariff (NSW)0 cents/kWh21 cents/kWh
Queensland Solar Power Feed-in Tariff (QLD)0 cents/kWh18 cents/kWh
Victoria Solar Power Feed-in Tariff (VIC)0 cents/kWh16 cents/kWh
Western Australia Solar Power Feed-in Tariff (WA)7.1 cents/kWh7.1 cents/kWh
South Australia Solar Power Feed-in Tariff (SA)0 cents/kWh22 cents/kWh
Northern Territory Solar Power Feed-in Tariff (NT)8.3 cents/kWh23.7 cents/kWh
Tasmania Solar Power Feed-in Tariff (TAS)8.5 cents/kWh14.3 cents/kWh
Australian Capital Territory Solar Power Feed-in Tariff (ACT)0 cents/kWh16 cents/kWh
The most up to date Solar Feed-In Tariff rates can be found by clicking here

To speak with our team of experts about your solar solution, contact us here.

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