Solar Incentives for Businesses in Australia
There are many incentives that business owners in Australia with solar power can enjoy. Some of them include Small-scale Technology Certificates (STCs), Feed-in Tariffs, Retailer Energy Productivity Scheme (REPS), and more. These incentives promote the adoption of solar by lowering the installation costs.
Many people enjoy these cost reductions in the form of solar incentives that allow them to install photovoltaic panels cost-effectively.
But if you’re not aware of your choices, you may be missing out on lowering your solar installation upfront cost.
This post will discuss some solar incentives available for businesses in Australia.
Read on to discover how you can affordably install solar to reduce your power costs.
1. Electricity feed-in tariff
Feed-in tariffs for renewable energy are incentives for small-scale solar photovoltaic (PV) or wind power systems connected to the grid. It rewards excess electricity generated by the solar panels that you send to the main grid or fail to use.
A net feed-in tariff is a credit you get for excess energy that you don’t use. But it depends on your location. Net feed-in tariff is available for small businesses in Queensland, Victoria, South Australia, New South Wales and Tasmania.
For gross feed-in tariff, your electricity provider pays you for each kilowatt-hour that you send to the main grid. The retailer will credit you the amount and charge you separately for any electricity that you source from the grid. The amount you get varies for different retailers. Gross feed-in tariff is available in the Australian Capital Territory, New South Wales and Nothern Territory.
Your solar provider can help you find an electricity provider with a high feed-in tariff.
What does feed-in tariff offer?
Electricity feed-in tariff offers credit to customers for unused electricity that their solar system sends back to the grid. It lowers your electricity expenses, which means more profits. Your solar provider pays you cents for every kWh you send to the grid. When your system’s output is substantial, your feed-in tariff becomes significant.
To be eligible to receive feed-in tariffs, you must have a solar PV system installed in your business. The system must also be connected to the National Energy Market (NEM) grid.
How to apply/claim feed-in electricity tariff
Installing a solar PV system will not automatically make you eligible to receive a feed-in tariff. So, it would be to speak to your electricity retailer to determine whether you qualify.
The electricity retailer will provide you with a feed-in tariff application form.
Once you fill the form, you’ll send the completed form back to your electricity retailer. Ensure to read the retailer’s feed-in tariff terms and conditions before applying, and don’t forget to keep a copy for your records.
You can also ask your electricity retailer about potential changes to your current electricity rates after solar installation. Check whether the discounts you receive from your electricity retailer will continue.
Here are some other things to check before applying for feed-in tariffs:
- Administration fees for the current Feed-in Tariff
- Payment options your electricity retailer provide for the electricity you export to the grid
- What happens when extra credits are more than 12 months old?
- Is there a minimum threshold before you receive credits?
- What happens to your credits after you end your contract with your electricity retailer?
2. The Victorian Environmental Upgrade Finance (EUF)
The Environmental Upgrade Finance (EUF) is a free finance facilitation service for businesses, tenants, property owners, councils, and community groups. It covers people living in Victoria. The incentive helps businesses invest in renewables, energy efficiency upgrades, water, and waste efficiency improvements.
The EUF has many environmental benefits for businesses, including reduced water and waste costs, improved working environment for tenants, and savings in energy. There’ll be fewer greenhouse gas emissions, making our planet cleaner.
What does Victorian Environmental Upgrade Finance offer?
Apart from lower energy costs, the EUF has many other financial benefits. It requires zero upfront capital and no additional security requirements. With lower annual repayments offset by electricity cost savings, your cash flow will significantly improve.
The EUF also offers competitive interest rates fixed for about ten years or more, with low refinancing risk.
Only those living in Victoria are eligible for the EUF.
How to apply/claim the Environmental Upgrade Finance
To apply for the Victorian Environmental Upgrade Finance, you should visit their website or call 03 8626 8781.
3. The Retailer Energy Efficiency Scheme (SA)
The Retailer Energy Productivity Scheme (REPS) offers incentives to households and businesses in South Australia, allowing them to reduce energy costs. This South Australian Government energy efficiency scheme establishes energy efficiency and audit targets to be met by gas and electricity retailers.
What does the Retailer Energy Productivity Scheme offer?
REES helps households and businesses in South Australia to lower their energy costs. The scheme provides South Australians with smart, affordable, reliable, and sustainable energy. All energy retailers participating in the REPS provide free or discounted energy efficiency and energy production activities.
Households and businesses in South Australia may get this offer from the REPS. Formerly known as Retailer Energy Efficiency Scheme (REES), the REPS started in 2020. Their activities include installing water-efficient showerheads, installing energy-efficient lighting, or helping save water heating costs.
REPS also offer an energy audit for low-income South Australian households. Energy retailers participating in the scheme choose the energy efficiency activities from the REES energy efficiency activities approved by the Minister.
All households and small businesses in South Australia are eligible for the Retailer Energy Productivity Scheme.
How to apply for the REPS
You can apply for the Retailer Energy Productivity Scheme by contacting a REPS obliged retailer or third-party contractor. They’ll provide you with information about the energy savings activities available for your business.
However, it’s important to know that REPS activities and targets may differ for different retailers and contractors. So, feel free to consult multiple retailers to see who can help you.
4. Small-scale Technology Certificates (STCs)
The Small-scale Renewable Energy Scheme (SRES) empowers small-scale installations such as solar hot water systems and solar panels. The scheme operates by creating tradable Small-scale Technology Certificates that offer incentives for the excess energy generation from renewable sources.
They create and issue certificates through the online trading platform REC Registry. Through the scheme, people who own small-scale systems can create certificates for every megawatt-hour of electricity they generate.
You can create small-scale technology certificates after installing an eligible system. They are calculated depending on the amount of energy a system generates or replaces (that is, energy from non-renewable sources).
Electricity retailers are expected to submit small-scale technology certificates every year, and the required number to be submitted is set by the small-scale technology percentage.
What do STCs offer?
The Small-scale Renewable Energy Scheme (SRES) helps reduce the purchase cost for households and small businesses that install a small-scale renewable energy system (like wind, hydro or solar) or an eligible hot water system.
When you install an eligible system, it enables the creation of Small-scale Technology Certificates (STCs) with a value that you can redeem by assigning or selling them to an agent.
However, the number of STCs created depends on:
- the climate region where it is installed
- the amount of electricity consumption the system reduces or the amount of renewable electricity it produces
If you want to sell the certificates, you can do it in two ways:
- Sell through the STCs Clearing House. Here, the price is fixed at $40 per STC, GST excluded.
- Sell through the open STCs market. Here, the pricing is subject to market forces.
- Solar photovoltaic (PV) panels
- Solar water heaters
- Air source heat pumps
- Wind turbines, and
- Hydro systems
All small generation units must meet the following criteria to be eligible for small-scale technology certificates:
- Meet New Zealand and Australian standards
- Have its inverter and panels listed on the Clean Energy Council list of approved components and be installed no more than 12 months before the creation of certificates
- Meet all local, state, territory, and federal requirements, including electrical safety
- Comply with all the Clean Energy Council design and install guidelines
- use a Clean Energy Council accredited installer and designer
- Must be classified as small-scale and;
- The solar panel system must have a capacity of no more than 100kW and a total annual electricity output of less than 250MWh
How to apply/claim STCs
If you own an eligible system, you may receive an upfront discount on the total price of your system. Alternatively, you may receive several small-scale technology certificates, which you can create or sell after installation.
There are two ways to claim STCs:
- Through your solar installer or a registered third party – this is the easiest and most preferred way to claim STCs. Generally, you assign the right to the STCs to a third party who sells the STCs in the open market or clearing house.
- Claim your STCs yourself. For this, you need to sign up to the REC Registry to create your STCs. You can then sell them in the open market or clearing house.
5. Next Generation Energy Storage Grants (ACT)
The Next Gen program pays for developing the energy storage industry in the Australian Capital Territory (ACT). It also offers support for research and training. The grant enables households and businesses to afford a battery storage unit have power when they need it:
- On overcast days
- At night, or
- At peak times when electricity costs are higher
The Next Gen program offers a rebate of $825 per kW for a battery, which means that for a 5 kW system, you will save about $4,000, excluding GST off your battery installation.
What does Next Generation Energy Storage Grants offer?
The Next Generation Energy Storage Grants offers households and businesses in the ACT a discount on battery storage unit installation with an existing or new rooftop solar PV system. The current rebate is $825 per kW up to 30 kW.
The rebate for a system of 5kW is about $4000. However, when you add a battery system to your existing rooftop solar, the cost will be between $8,000 and $10,000 after applying the rebate.
On the other hand, for facilities without rooftop solar, the cost for the system combined with solar panels will be between $13,000 and $18,000 after applying the rebate.
However, it’s important to know that system costs and payback periods may vary based on a few factors such as:
- Energy usage and electricity prices
- Brand and system size
- Technology type, and more.
Make sure you discuss the factors with your provider.
You must meet the following requirements to be eligible for the Next Generation Energy Storage Grants:
- Must be connected to the grid
- Must have a new system that is not already supported by the program
- Must be coupled with solar PV panels
- Must own or rent in the ACT
- Must have a suitable location for the battery
- Must include a new or existing inverter that meets specs
How to apply/claim Next Generation Energy Storage Grants
You need to go through an approved supplier for new battery installations. Here’s a list of approved providers for Next Generation Energy Storage Grants:
- ECG Electrical
- Mondiaux Solar
- Select Electrical and Solar Solutions
- SouthAus Solar
- Stag Electrical
- Stored Solar
These providers have the approval to participate in the NextGen program. However, it’s advisable to carefully go through all available products and options when considering battery storage. This way, you will choose the best provider to suit your needs.
The Australian Government offers several incentives to encourage the greater adoption of solar. These incentives can come as tax benefits, solar rebates, and performance-based incentives. Households and businesses can significantly reduce the amount they pay for solar by taking advantage of this offer.
Some of the top solar incentives in Australia include Small-scale Technology Certificates (STCs), Feed-in Tariffs, and Retailer Energy Productivity Scheme (REPS). Australian businesses can affordably install photovoltaic panels on their properties with these incentives.
Interested in solar? By clicking below you can use our smart solar calculator to find out just how much you could save with solar, what rebate you are eligible for, and the impact you will have on the environment.
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