Electricity prices in Australia are among the highest in the world, and South Australia has the highest tariffs in the country. Electricity prices above 35 cents/kWh are common in the state, and some customers are charged over 40 cents/kWh. However, this also means that solar panels achieve major savings, and many SA homes and businesses use them for this reason.
South Australia has been characterized by innovation in the solar industry. The state has a utility-scale Tesla battery, with 100 MW of power output and 129,000 kWh of storage – among the largest of its type in the world. South Australia is also working on a virtual power plant: 50,000 households are being equipped with solar panels and batteries, to accumulate 250 MW of generation capacity and 650,000 kWh of storage. Using a smart platform, all these small-scale systems will act like a single power plant.
There are two main incentive programs for solar power systems in South Australia. You can claim a solar rebate from the Small-scale Renewable Energy Scheme (SRES), where the incentive is based on your system capacity and local sunshine. South Australia also offers the Home Battery Scheme, with rebates up to $6,000 for energy storage systems. The SRES is a national program, while the Home Battery Scheme is local.
South Australia Solar Rebate 2020
South Australia does not have a local rebate program for solar power, but the Small-scale Renewable Energy Scheme reduces solar installation costs by around one-third. The scheme works as follows:
- For every 1,000 kWh of estimated production from your solar power system, you earn one Small-scale Technology Certificate (STC).
- The production is estimated from the installation year to 2030. This means that solar power systems installed in 2020 get STCs based on 11 years of use.
- The Australian Government Clean Energy Regulator requires electricity retailers to purchase STCs, as a way to incentive clean power. Each STC can be sold for $35-$40.
With the typical sunshine of South Australia, a solar power system in Adelaide and surrounding areas earns around 15 STCs for every kilowatt of installed capacity. This results in a cash incentive of $525 to $600 per kilowatt. Assuming a cost of $1600 per kilowatt before rebates, the incentive reduces the upfront expense by over 30%. The incentive from STCs is higher in the western and northern portions of South Australia since they are sunnier than the southeast.
If you need further information about the Small-scale Renewable Energy Scheme, please visit the Australian Government Clean Energy Regulator website.
The SA Home Battery Scheme
The Home Battery Scheme in South Australia offers rebates for battery systems, complementing the nationwide rebate for solar panels. The Home Battery Scheme will benefit 40,000 households with a battery rebate, increasing the energy storage capacity connected to the SA grid.
All households in South Australia are eligible for a rebate of $500 per kWh of storage capacity, and Energy Concession Holders are eligible for $600/kWh.
In both cases, the maximum rebate is $6,000. Homeowners with the normal rebate must install 12 kWh to get the maximum benefit, while Energy Concession Holders get the maximum rebate with a 10 kWh system.
For example, the Tesla Powerwall 2 costs around $14,000 in Australia, and it has a storage capacity of 13.5 kWh. With the Home Battery Scheme rebate, the net cost is reduced to $8,000 in this scenario. The following table compares the cost of a 6 kW solar power system with this battery, before and after applying the rebates:
Component Price Rebate Net Price
|6 kW Solar Power System||$9,600||– $3,640||$5,960|
|Tesla Powerwall 2||$14,000||– $6,000||$8,000|
(Note: In reference to the above table, all solar systems have varying fees and exact figures will not be known without a personalised solar assessment)
In this example, the STCs and the Home Battery Scheme cover 41% of total costs. Assuming this system saves $3,600 per year, the payback period is reduced from 6.6 to 3.9 years. Consider that this payback period includes batteries, not only the solar power system.
Low-Interest Solar Power Loans
To complement the Home Battery Scheme rebates, low-interest loans are available through a $100 million fund from the Clean Energy Finance Corporation (CEFC). Unlike the rebate, which only covers battery systems, the loan can also be used for solar power. This includes new solar installations, and increasing the capacity of existing systems.
If you need further information about this solar battery incentive in South Australia, please visit the Home Battery Scheme website from the SA government.
South Australia Solar Power Feed-in Tariffs
When surplus production from your solar panels is exported to the power grid, the rate paid by electricity providers is called the feed-in tariff (FIT). If these tariffs are high, they can be considered a type of solar incentive. Homeowners and businesses tend to install larger solar arrays if they are paid well for surplus electricity.
Feed-in tariffs are called Voluntary Retailer Contributions in South Australia, and the government does not have a minimum FIT that is required by law. However, as of early 2020, the best tariffs available in SA range from 16 to 23 cents per kWh.
Unless you consume all the electricity produced by your solar panels, the feed-in tariff is an important factor when estimating annual savings. The following is a simplified example that demonstrates the concept:
- Assume your solar power system generates 12,000 kWh per year, but you only use 9,000 kWh, while the remaining 3,000 kWh is exported to the grid.
- If you are charged 35 cents/kWh, you save $3,150 per year thanks to the 9,000 kWh.
- The cash earned from the other 3,000 kWh will depend on the feed-in tariff. They only represent $300 in savings at 10 cents/kWh, but this increased to $600 at 20 cents/kWh.
- Without a feed-in tariff, you only save $3,150 per year in this case. The savings are increased to $3,450 with 10 cents/kWh (9.5% more), and $3,750 with 20 cents/kWh (19% more).
This is a very simplified example: the performance of a solar power system depends on your energy consumption habits and site conditions, making each project and installation unique. However, the business case for solar power improves in general as the feed-in tariff increases.
If you need further information about solar feed-in tariffs in South Australia, please visit the SA government official website.
The most up to date SA Solar Feed-In Tariff rates can be found by clicking here
You might also be interested in our blog that addresses the current Solar Rebates for all Australian states – ‘Solar Rebates 2020’
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