18 Aug 2016
The government solar incentive, which provides a significant discount off the upfront cost of a solar system, is due to be phased out starting 1st January 2017.
Currently, for a 5kW solar system, which is generally large enough to meet the energy requirements of a small business, the average incentive is $3,914. This incentive comes as a one-off payment which is usually used as a discount off the upfront cost.
For a 30kW system, suitable for a medium-sized business, the incentive is $23,598.
For a 100kW system which you’ll often see on larger commercial properties like supermarkets or warehouses, the incentive is worth $78.774.
On January 1st, for the 30kW system example, the incentive will drop approximately $1,573. This will happen again every year until the rebate completely disappears.
In order to qualify for the current, full incentive, your system must be installed and commissioned by the cut-off date of 31st December 2016.
Because installers generally get very busy in the lead up to rebate deadlines like this, it will pay to act sooner rather than later. This is even more true for commercial installations because of the significant lead times associated with the approval process.
You can arrange quotes by clicking on the button below and completing the quote form.
What is the solar incentive and how does it work?
The STC (Small-scale Technology Certificates) incentive has been around in its current form since 2009 when it was introduced as part of the Renewable Energy Target.
The system is confusing, but put simply, works something like this.
- A solar system receives an STC for every 1,000 kilowatt-hours of electricity it is expected to produce over 15 years. As a real world example, a 30kW solar system installed in Sydney in July 2016 would be expected to produce 621,000kWh in its lifetime, so would be eligible for 621 STCs.
- Once these STCs have been authorised they can be sold to help recover some of the cost of installing. Commonly, they are exchanged with the system installer for a discount off the install price.
- The value of these STCs is determined by the forces of supply and demand. Supply coming from renewable energy creators — such as businesses and homes installing solar, and demand to buy coming from entities (usually electricity retailers) which are required to buy STCs to cover their clean electricity generation targets. This market price is $38 per STC at the time of writing this article. For the Sydney business installing 30kW example, their STC value would equal $23,598.
How much am I eligible for?
This all depends on where your commercial property is and what size system you are looking to install. This is because a 30kW system produces more electricity than a 5kW system and a solar system in Darwin will produce more than an identical one in Hobart.
Keeping with the 30kW example, take a look at the table below to see how much you would be eligible for in the below places.
| STC Zone | Incentive for 30kW |
|---|---|
| Zone 1 | $27,730 |
| Zone 2 | $26,258 |
| Zone 3 | $23,598 |
| Zone 4 | $20,254 |
Is Solar Really Worth it though?
Absolutely it is.
…In most cases.
To be perfectly honest, there are some situations when solar will probably not make good financial sense.
For example:
- You’re planning to sell the property soon. You probably won’t be able to recoup your investment quickly enough.
- Your electricity bill is very small — say $100/month: The main benefit of solar comes from reducing your electricity bill. If you don’t have much of one to begin with there won’t be much to save on. This is more common for residential properties than it is for commercial ones.
- Your business uses very little power during the day. If most of your business’ energy usage is during the night, then you won’t be able to take advantage of the electricity your solar panels produce during the day and may not be an ideal candidate for solar.
Now this isn’t an exhaustive list, for a variety of different reasons, solar may genuinely not make sense for your business.
If none of these describe you, though, and you haven’t installed solar yet then you should at the very least investigate it further, get quotes and run through the sums for yourself.
This is because the upside of solar is quite amazing.
- Investment paybacks as short as 3-5 years.
- Protection from rising electricity costs.
- Electricity bills cut by up to 75%.
With the STC incentive phasing out from January, now is the time to get quotes and run the numbers.
The financial case may never look stronger than right now.
Fortunately, you can get started right here. At Solar Market, we have helped over 188,000 homes and businesses like yourself find out if solar is right for them.
Just enter a few details we’ll get you 3 proposals from commercial solar providers servicing your area.
