Homes with solar power can save dollars if they qualify for Australian government’s rebates, grants or subsidies. In essence, two types of financial incentives exist in the country to encourage the use of renewable energy; these are the federal solar incentives in the form of energy certificates and Renewable Energy Target (RET) as the main driver and state incentives via feed-in tariff (FIT) schemes.
Federal Solar Incentives
Whether you live in Victoria or any other state, you can benefit from incentives offered by the federal government. Renewable Energy Target (RET) drives this scheme, which is in the form of Renewable Energy Certificates (REC).
REC can be availed when you buy qualifying solar or wind power systems, solar hot water and solar panels. You can receive cash back by selling RECs or use them to gain discounts. It was implemented to boost additional renewable energy per year as part of the Renewable Energy Target. RET requires energy companies to deliver 9500 GWh renewable energy while the 20/20 target needs 4500 GWh. 1MWh energy is equal to 1 REC. To meet the target, energy companies should surrender RECs into their account every end of the year, representing 20% market share. Otherwise, they will be fined.
An REC can be traded for cash and the value fluctuates depending on market conditions. To make it simple, REC is somewhat a currency for renewable energy. Owners of solar PV systems can claim RECs by completing necessary application forms. This can be confusing, so most consumers assign their right to an agent. Through RECs, money can be saved as soon as you get your solar power equipment. This rebate is available in Victoria or any part of Australia. RECs come in two forms, the Small-scale Technology Certificate (STC) and Large-scale Generation Certificates (LGC). The two differ from the amount of energy generated. STC is for systems of up to 100 kilowatts while LGC is for more than 100-kilowatt capacity.
Aside from RECs, states also implement incentives to support and encourage renewable energy systems through Feed-in Tariffs or FIT. Under these, owners are paid for power they export to the electricity grid. This is for the power their system generates in excess, which is sent back into the main grid. Eligibility depends on the state, date the system was installed and its size. In Victoria, there is no mandatory FIT rate and electricity retailers set these rates on voluntary basis. Eligible home and business owners, landlords and renters can be paid for a system of up to 100 kilowatt at rates based on retailer competition. However, just recently, the ESC has adopted a minimum FIT rate of 6.2 cents per kilowatt-hour, which applies to all customers with current FIT.
Business owners who decide to install grid connected solar power system can obtain significant savings through solar credit discount, typically offering upfront refund. Small businesses with annual turnover of $2 million or less are eligible for tax break of $6,500. They can also sell certificates to offset solar PV costs and use Feed-in tariffs that can cut their electricity costs or produce surplus electricity.
It is best to be careful when getting solar quotes from companies. There are some who work rebates into final price, which can be bad if they are unscrupulous. Customers can ask what STC price was used in the quote. High STC price is mostly included, but actual prices fluctuate, as mentioned above. Regardless of this, solar power system is a good way to save money and help save the planet. Just be smart in comparing solar quotes in Warrnambool, Victoria