Ch 8. What financial incentives are available?

Rebates, Tax Credits, Feed-in tariffs (FITs) and Net Metering

A rebate or tax credit is an upfront discount on your solar system, or a credit which will come off your tax bill. This is usually based on a government policy to provide a financial incentive to buy solar, in order to offset carbon emissions.

A feed-in tariff is the amount of money that you get paid for the electricity that you export to the grid. FITs vary greatly from region to region, year to year and government to government, so it is worth being clear on what FITs are available in your region, especially if you are likely to export a lot of solar.

Net metering is most common in the US and works slightly differently to a FIT. Net metering essentially works like a 1:1 feed in tariff. In that in a billing period (let’s say monthly), all the solar power that your system produced, is deducted from any power that your property consumed from the grid. This is quite favourable for solar owners, considering that the market rate for your solar power is considerably lower than what you pay retail for electricity, however you are essentially being paid the retail rate.

Australia

Rebates

The main rebate available in Australia is the federal government’s STCs (Small Technology Certificates). This is available for virtually all Australian residential systems (and commercial systems up to 100kW). There are a few different factors involved in determining the amount you will receive back for your solar system (you can use this calculator to find out exactly), however the majority of Australians (Brisbane, Sydney, Canberra, Adelaide and Perth) in 2019 can expect about a $3000 rebate, whilst those in Melbourne and Tasmania can expect closer to $2500.

A few points to note about STCs:

  • Your solar retailer will claim the STCs on your behalf, so you get the rebate up front and do not have to worry about claiming the rebate.
  • Your solar quote will (at least should) show the amount you pay after the STC discount. It should also clearly break down the cost of the system, and the amount taken for the STCs.
  • The quantity of STCs your system is eligible for is dependent on how much sun your receive (each postcode in Australia is given a “zone” based on it’s solar irradiation (sunlight)).
  • The reason for the above is that the certificates are based on how much greenhouse gases your solar panels will offset, and they will offset more in an area with more sunlight.

Victoria is the only state which currently has a separate state government rebate. Most Victorians can expect a further $2225 off their solar systems. Although unlike the STCs, this rebate will need to be claimed by the individual, rather than the retailer.

Feed-in tariffs (FITs)

FITs are far more varied than the rebates, in that each state legislates on the minimum FIT an electricity retailer must offer consumers, and each retailer may offer an additional amount on top of the minimum.

Visit the government website www.energymadeeasy.gov.au to compare plans from various energy retailers. Look for the below text in the “Price summary” to see what FIT you can expect:

United States

Tax credits

2019 is that last year that US households are eligible for the full 30% federal government tax credit (also known as the ITC). However, the ITC only drops a little to 26% in 2020, and 22% in 2021.

As of 2022, there will be not tax credit for homeowners, but commercial and utility credit of 10% will remain 0ngoing.

Net metering

Most states in the US (43 currently) have a net metering policy for solar.

See http://programs.dsireusa.org/system/program/ and filter for program type = net metering to see details in your state.

Rest of the world

Feed-in tariffs (FITs)

For a large, but somewhat outdated list of FITs around the world, visit Wikipedia.


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