Nila Sweeney

 

The Federal Government is scaling back its solar credit scheme and if you don’t install your panels before this July you will pay thousands more. 
 
How has it worked?
 
Households looking to install a solar panel system have been eligible for solar credits in the form of Small-scale Technology Certificates (STCs). STCs are how the government rewards you for making your home more energy-efficient. 
 
To calculate the number of STCs your home is entitled to, visit orer.gov.au.
 
Households sell their STCs to their solar installer to pay for the first 1.5 kWh, meaning you pay less for solar from your own pocket. The value at which an STC is sold fluctuates because it essentially depends on supply and demand for STCs.
 
Since June 2009, the number of STCs you are originally entitled to has been multiplied by five. It was then scaled down to a multiplier of three. 
 
From 1 July 2012, it will be reduced again to a multiplier of two and from July 2013 there will be no multiplier at all. 
 
“Households will still receive STCs, but there will be a percentage fall by 33% from July on a 1.5kWh system”, says Tom Chapman from solar installation broker, Solar Choice.
 
This means that if you are currently entitled to 93 STCs, you would be eligible for 62 STCs from July and then 31 STCs from July 2013.
 
For instance, if you live in NSW (with a zone rating 1.382) and install a 1.5 kW system before the cut-off date, you’ll save almost $1,000 in installation costs. 
 
Assuming the market price of an STC doesn’t change, the cost of your solar panel will rise from $2,400 to $3,360 from July. 
 
If you delayed installation until July 2013, expect to fork out $4,326 for a 1.5 kW system – almost $2,000 more than what you could pay for it now.
 
If you install a solar panel after 1 July 2012, it will take about two years longer for your solar panel to pay for itself, and an additional two years if you decide to wait until July 2013!
 
Installation costs for a 1.5 kW system for a home in Merrylands, NSW
 
Postcode: 2160
Zone Rating: 1.382
 
  Installed before 30 June 2012 Installed from 1 July 2012 Installed from 1 July 2013
Cost of system (excluding rebates) $5,290 $5,290 $5,290
Solar credit multiplier 3 2 1
Number of STCs you're entitled to 93 62 31
Current STC market price $31 $31 $31
Federal government rebate $2,892 $1,928 $964
True cost of purchase and installation $2,398 $3,362 $4,326
Time taken to recoup the cost of purchase and installation (years) 5.4 7.6 9.8

Source: Energy Matters
 
What should you do before the deadline?
 
To be eligible for triple the number of STC entitlements, you need to have your home installed with a solar panel by 30 June 2012.
 
Chapman says you need to allow for an installation period of three to four weeks.
 
“It’s not too late to start the process of installing solar. If someone comes to Solar Choice, a broker will go through and determine what their usage is, what they require and then show them a range of different installers”, says Chapman.
 
-- By Stephanie Hanna

It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan