Solar Power - Financial Benefits

Following on from our Blog post about the "Sustainable Water + Energy" talk held on March 11th I thought I would take a look at the current state of financial incentives for installing Solar Panels on your roof in New South Wales (apart from the generation of the actual power itself !):

As much as the beautiful simplicity of solar power generation in the sunny Australian climate makes clear and logical sense, the cloudy ambiguous world of financial incentives is a shape-shifting enigma. To try and help matters I have tried to distill the information down to what you need to know if you are going to install Solar Panels on your roof. We will kick off with a helpful diagram from IPART's website:

3Ways

Leaving the whole issue of "Savings on Electricity Bills" for another day let's focus on the "one-off" and "ongoing" financial benefits. For simplicity I will use the common situation where a customer is getting their solar system installed by a registered installer.

One-Off Benefit or "What in the world is an STC?"

The "One-Off Benefit" alluded to in the above diagram is a sum of money that you can receive as a discount from your installer after installation. It is referred to as "STC"s, short for Small-Scale Technology Certificates. This is not a government rebate, as that would be no fun at all, it is a "manufactured tradable commodity".

Quick Explanation:

1.Every year the Clean Energy Regulator publishes a "Small-Scale Technology Percentage" based on their guesstimate of electricity acquisitions for that year, this year it equated to 18.65million STCs. Electricity retailers have a legal requirement to buy a certain number of STCs each year.

2. The number of STCs that you can claim for your new system will depend on your geographical location and the amount of electricity that your system will produce over the next 15 years.

3. The value you can get for each of these STCs from an installer will depend on the going market rate. Market price today (March 26th 2014) seems to be around the $37/STC mark. Just Google "STC current market rate" and take a look.

4. You can calculate how many STCs you can "claim" with the CER Calculator. Click HERE.

5. Once your system is installed you can "assign" your STCs over to your registered installer using a "STC Assignment Form" (what most customers do) or you can create and manage the STCs yourself (the road less travelled by).Click HERE.

6. The registered installer should then give you an agreed financial discount on the installation or other financial benefit.

7. Your installer will then eventually sell the STCs to Electricity Retailers who are legally required to buy a certain number each year.

8. If you choose to create and manage the STCs yourself then be prepared for a "complicated process". The benefit at the moment would be that you could avail of the Clean Energy Regulator's fixed rate of $40/STC. It's up to yourself.

Clear as mud eh? You would almost think somebody was trying to confuse you.

Ongoing Benefit or "What happens to the electricity that I don't use?"

As opposed to the riddle-me-ree of the STC explanation above, the hard facts of the Net Feed-In tariff are stark and disappointing.

1. The Independent Pricing and Regulatory Tribunal (IPART) have set a suggested "benchmark" range in NSW of between 6.6 to 11.2 c/kWh for any electricity that you have generated but not used.

2. This price is NOT MANDATORY and you must choose a retailer that is willing to pay this tariff otherwise you will be producing free energy which your retailer will sell at full price to your neighbour.

In relation to Net Feed-In Tariffs the best idea is to compare rates from different retailers before making a decision. "EnergyMADEeasy" is a good place to start.Click HERE.

I will follow up soon with strategies to make the most out of the electricity that you produce, as this is the key to making solar produced energy worthwhile. This is the emerging market of "Smart" home solutions and aligning both your energy production and use times. 

Fergal White.

4 comments for “Solar Power - Financial Benefits”

Posted Friday, January 2, 2015 at 5:07:29 PM

From past few years solar power has been the talk of the town in Australia and overseas. Solar is a renewable source of energy and also a non pollutant. It also saves money as well as the environment.

Posted Friday, January 2, 2015 at 5:07:51 PM

From past few years solar power has been the talk of the town in Australia and overseas. Solar is a renewable source of energy and also a non pollutant. It also saves money as well as the environment.

Posted Saturday, January 24, 2015 at 10:23:09 PM

Using solar power is beneficial to both environment and to our wallets.

Posted Wednesday, January 27, 2016 at 6:03:14 PM

Solar power is a completely sustainable source of power – it will never run out and will provide a reliable power source for your lighting, equipment, heating and hot water for as long as you keep your solar panels.

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