If you are considering installing a solar PV system under 100kW, then you should read the below explanation on how you much you could lose out on government rebates if you wait to install the system after this calendar year.
Let’s start with a quick explanation of where the government incentive comes from.
Explanation of the Renewable Energy Target
The Renewable Energy Target (RET) is a government scheme that encourages the reduction of greenhouse gas emissions while incentivizing renewable energy generation. It allows owners of small scale systems and large generation plants to create certificates for every megawatt hour of energy they produce. Electricity Retailers are mandated by the RET to buy a certain number of these certificates every year, determined by the Renewable Power Percentage, and give them to the Clean Energy Regulator. The Renewable Power Percentage is determined annually so this is an estimated value in the Electricity Cost Spreadsheet. The end goal is to achieve 33,000 GWh of renewable energy by 2020. At the time the RET was made the 2020 goal was 41,000 Gwh but the target was adjusted in June 2015 (www.cleanenergyregulator.gov.au).
The formula to calculate the value of STCs issued for one system is the following:
Upfront STCs = Size of the System(kW) x Postcode Multiplier x Deeming Period x Spot STC Price
The postcode multiplier is a value supplied by the Clean Energy Regulator. See a list of postcode multipliers here.
STCs are created upfront for a 15 year deeming period OR however many years are left before 2030. Now that we are in less than 15 years from 2030, the deeming period will decrease to 14 years for systems installed in 2017 and 13 years the following and so on. Therefore, from this year forward, under 100kW systems will lose out on upfront STCs.
To simplify things, see the example of a 100kW system installed in Sydney below.
- STCs for a 100kW in Sydney = 100kW x 1.382 postcode multiplier x 15 years x $37.48/STC = $77,546
- For installs after December 31: 100kW x 1.382 postcode multiplier x 14 years x $37.48/STC = $72,374
- That is a difference of over $5,000 – >5% of the Net.
To find out more about the rebate changes contact us to speak with one of our consultants.