Solar financing guide 2022: stcs, rebates and payback periods

In South Australia, we get plenty of sun all year-round. We typically get 7:36 hours of sunlight a day, and a total of 2774 hours of sunlight per year.

In every state in Australia, solar panels are worth buying no matter your energy consumption. South Australia has a strong rooftop PV industry, with about 1 in 3 households having solar panels. While there are many variables that impact the cost, savings and payback of solar panels, the upshot is that in Australia they are a good investment.

With government rebates and reducing solar panel costs, South Australian residents can get a solar panel system today without spending a fortune. This guide will provide you with detailed information on all the possible rebates you are entitled to as an Australian Solar consumer. Claiming STCs can be complicated, but it shouldn’t be. By reading our guide, you will get a good idea of the amount in rebates that you can get as well as learn how to claim them.

There are two kinds of rebates in South Australia: The State Government’s Solar Feed-in Tariff and Small-scale Technology Certificates. We explore what both of these rebates mean for South Australians, something that is quite important for those adopting solar for the first time.

What does stc stand for?

STCs are small-scale technology certificates that apply for residential solar installations. STCs are issued alongside qualifying solar power systems and solar panels. This can be used at a later date to withdraw the dollar equivalent that will be credited against your purchase. STC values change over time, and are affected by market conditions. As a result, so will how much cash back you can get. Note that these renewable technology certificates can also apply for commercial solar installations, known as LGCs.

NTS Solar Buying Guide eBook Download

    STCs are eligible to be redeemed until 2030 January 1st, and decline in value over the subsequent years before then. That’s because the scheme was designed to phase out totally in 2030. For example, the value of an STC was $39.60 in April 2020, down to $38.25 as of 5th July 2021.

    How does the solar subsidy in South Australia work?

    To calculate the total amount of STCs applied to a system, you multiply the solar system size (kW) x Postcode Zone Rating x Deeming Period (years) = Number of STCs.

    Use this calculator here, to find out how many STCs you are eligible for.

    When calculating STCs, factors such as shading and efficiency losses are ignored when calculating the STC solar rebate.

    When you purchase a solar PV system from Natural Technology Systems, we will have already discounted this value for you in your solar quote. That’s because we take over the hassle of registering and selling the STCs on the market from you. We give you a point of sale discount based on your STCs.

    On the day of installation, you assign the STCs over to us, then we complete the registration of these certificates with the Renewable Energy Regulator on your behalf and eventually recoup their value. You don’t have to wait for this to happen, we do. You get an immediate deduction in cost.

    Is this really a rebate?

    The program was previously referred to as the Solar Credits rebate, but in effect it is a subsidy offering up-front discount on the purchase of a solar power system.

    Who is eligible for STCs?

    The Australian solar credits scheme is open to any homeowner, business or community group. Even schools are also eligible.

    Does it cover off-grid systems?

    Yes, the solar credits program covers grid connected and off grid solar power systems. Further details about Solar Credits and off-grid solar power systems can be viewed here.

    Does it cover Battery systems / hybrid systems?

    A solar subsidy still applies for a battery system that is coupled with a solar pv system, but the energy storage itself would not be eligible for extra STCs.

    Can I install the panels myself to get STCs?

    No. The Clean Energy Regulator states that it is a requirement that only CEC accredited installers can sign off on STCs. Only then you are eligible for the rebate.

    Are caravans, boats, sheds, motor homes and RVs eligible for STCs?

    As long as the caravan, boat, shed or RV is your principle place of residence and has an address (such as a caravan park or marina berth), it will be eligible for STCs.

    Payback Period

    When it comes to reducing your electricity bills by using alternative energy sources, you can save money by cutting down the amount of energy used when using power grids. Solar panels are beneficial when it comes to powering your home using a natural source of energy. However, it is important to note that the total savings you can obtain from solar panels will depend on a few key factors:

    • Direct hours of sunlight
    • Local electricity rates
    • Size of your solar system

    In this article, we will be tackling how to calculate the payback period when installing a solar panel in your home and how the factors mentioned above weigh in. Before we dig deep into these calculations, we need to have a better understanding of how solar power works. 

    Comparing the Costs of Solar

    Since solar systems are getting cheaper and the technology is improving and developing over time to reap more benefits, is it fair to assume that it is the best investment compared to other renewable energy? It is imperative to know how clean energy stacks up against alternative methods of supplying power to your home to know if it is the best investment. After all, solar panels are only worth the investment if they can bring better results compared to other options on the market.

    For grid-tiered systems, the cost of solar against the cost of buying power from a utility company is compared to determine the payback period, as easy as that. These computations can also be applied to evaluate off-grid systems; however, instead of utility power, you will compare solar to the costs of running a power line on your property or consider alternative power sources such as hydro, wind, and a generator. For maximized cost-cutting results, you can combine these methods. 

    How Much Do Solar Panels Save?

    To understand how much money solar panels save on your electric bills, we have to determine how much you spend on your annual electricity bills. For example, the average Australian family home uses around 19KWh per day, and when converted to electricity bill consumption, this is around $2,500 a year. Moreover, larger homes with pools and ducted reverse cycle air conditioning can easily be 50+ KWh a day or around $5,500+ a year.

    If you were to multiply the above electricity consumption by the national average electricity rate (34.41 cents per kWh), you would get how much you’re spending on electricity every year. Now, let’s add solar systems to the equation. You can get “free” electricity if you generate electricity using a solar system and you don’t need to feed it back into the grid since your home is consuming the gathered solar energy.

    However, keep in mind that the sun is not available 24 hours a day, so you are technically only getting free electricity from 8 am to 6 pm. Regardless of the sun’s availability, a large percentage of electricity consumption happens during this period — around 40% of the daily energy consumption. This means an average household can save up to $1000 a year when we cut off 40% of the $2,500 annual electricity bills. 

    What is Feed-in Tariff?

    Another to consider before getting a solar system is the feed-in tariff (FiT). When you export excess solar energy that is not consumed within your household, you’re paid by your electricity provider with a feed-in tariff. It is usually a set rate per kilowatt-hour and paid as a credit on a household’s electricity bills. It is the Australian government’s way of subsidizing and encouraging homeowners to switch to renewable energy.

    FiTs vary depending on where you are, but it is typically anywhere between 6 to 12 cents per kWh exported. Let’s say your state offers 8 cents per kWh of eligible FiT. For a 6.6kW solar system, you are able to export about 700kWh of your solar generation which means you will be subsidized with $56 (8 cents x 700kWh) that will be credited on your electricity bill. With the FiT being credited to your electricity bills, you are able to save up to $1,600 per year on your electricity bills. 

    Going back to the question of how much you save in total with your solar system, once you sum up the amount you save from using solar power instead of electricity from your power grid plus the feed-in tariff, conclusively, you are getting a decent return on investment.

    As mentioned above, the 6.6kW system used in this example would cost about $4,100.00 (excluding installation prices) at today’s prices. Saving $1,600 per year gives you a 39% annual return on a $4,100 solar system. We can conclude that your solar system investment will return in a matter of three years! 

    Other Factors That May Vary Your Solar Payback Period

    The factors that we have listed above are based solely on national averages, but as previously mentioned, different households and circumstances, different computation of solar power efficiency as well. Here are some factors that can determine whether your home will have a better and faster return on investment compared to others

    Installation Costs

    The most varying factor that makes choosing which contractor to install your solar system would be the installation costs. Most solar systems would be priced the same but the installation costs will have a big difference. Although you can opt for a DIY install kit, it can have a huge drawback for the quality, hence, resulting in bigger costs and possible power hazards in your household. 

    If you want to get the most reasonable pricing for solar system installation packages, Natural Technology Systems can offer assistance. With 30 years of specialized off-grid and on-grid-connected Solar Electricity installation practical experiences, you are guaranteed to get the best efficiency when it comes to solar power. 

    Value of Incentives

    Aside from government-mandated feed-in tariffs, there are also financial incentives offered by the Federal Government and some states across Australia to eligible households. To check if you can apply for this incentive, visit the Department of Industry, Science, Energy and Resources website.

    Home Ownership

    On average, Australian families stay put for around 7.5 years before they move into a new home. And if you have a solar system installed in your home, it will greatly increase the house value which makes your solar system investment more recoupable. Before installing a solar system at home, think about whether you will be staying in your home long enough until your investments have returned. 

    Sun Exposure

    The potential of a solar system is greatly influenced by the location of the solar panel, which includes the angle or the tilt. Since the sun moves constantly throughout the day, it is smart to have it installed where it will face the sun most of the time. Solar panels that are faced in the wrong direction typically would produce 28% less solar energy compared to those panels installed correctly. 

    Since Australia is in the southern hemisphere, the sun moves towards the north, so north-facing panels will provide the maximized solar output. In Sydney, north-facing panels with a tilt of 30 degrees produce the maximum amount of solar energy throughout the year. It is ideal for those who have a fixed feed-in tariff, as it maximizes the savings.

    Though the overall solar energy production will be less for west-facing solar panels, it can still produce more power during afternoon peaks. This would lower the pressure during peak demand periods and help in saving the homeowner’s money by reducing the electricity bill.

    About Us

    Natural Technology Systems are solar providers that have been in business for over 30 years, we are a business that South Australia trusts and provide expert, obligation free quotes and advice. We provide customers with the most cost-effective way to slash those power bills for your home or business.

    Click here for a quick quote for your solar power needs or contact us today at (08) 7081 9830You can also email us for expert, obligation-free advice

    Talk to our experts today

    1300 418 148