Fact sheet: Support for small-scale renewable energy systems

The Renewable Energy Target

The Australian Government is supporting the deployment of more renewable energy throughout Australia with the Renewable Energy Target (RET) scheme. The RET scheme will help ensure that the equivalent of at least 20 per cent of Australia’s electricity supply comes from renewable sources by 2020.

The RET uses a mechanism of tradeable renewable energy certificates which are created by eligible sources of renewable energy.

The RET scheme operates as two separate parts:

  • the Large-scale Renewable Energy Target (LRET), which supports the deployment of renewable energy projects like wind farms, and commercial solar and geothermal power stations, and
  • the Small-scale Renewable Energy Scheme (SRES), which provides support for installations of small renewable energy systems such as rooftop solar panels and solar water heaters.

Small-scale Renewable Energy Scheme  

The SRES has been designed to assist households, small business and community groups with the upfront cost of installing small‑scale renewable energy systems through certificates, called small-scale technology certificates (STCs), which may be created for eligible installations.

Small-scale renewable energy systems that may be eligible to create STCs include:

  • solar panels
  • small wind turbines
  • micro hydroelectric systems
  • solar water heaters, and
  • heat pump water heaters.

While it is possible for owners of renewable energy systems to create and sell the STCs themselves, in practice, installers of these systems usually offer a discount on the price of an installation, or a cash payment, in return for the STCs.

Solar Credits

Solar Credits provide additional support to households, businesses and community groups that install small renewable energy generation units, such as rooftop solar panels, and small‑scale wind and hydro electricity systems. Solar Credits applies to the first 1.5 kilowatts (kW) of capacity installed for systems connected to a main electricity grid and up to the first 20 kW of capacity for off-grid systems.  

Level of support

Solar Credits work by multiplying the number of STCs that these systems would generally be eligible to create. The multiplier that applies for eligible systems installed between 9 June 2009 and 30 June 2011 is five.  For systems installed from 1 July 2011 to 30 June 2012, the multiplier is reduced to three and reduces by one each financial year until the standard rate of STC creation (a multiplier of one) applies for systems installed from 1 July 2013.

The level of support available under the RET for installations of solar panels, and small‑scale wind or hydro electricity systems depends on the amount of renewable energy it generates and the location where it is installed.

The table below provides approximate maximum rates of assistance that would be provided under the SRES for a typical 1.5kW solar panel system installed across Australia up until 30 June 2012. The assistance is based on a $40 STC price under the SRES accessible through the voluntary clearing house, with different Solar Credits support depending on the date of installation. Note that the majority of STC from Solar Credits are sold on the market outside the clearing house, generally at a lower price.

City Approximate maximum level of support
 5x Solar Credits multiplier (systems installed up to 30 June 2011)4x Solar Credits multiplier available under transitional arrangements for pre 5 May 2011 contracts (systems installed from 1 July 2011 to 30 June 2012)3x Solar Credits multiplier (systems installed from 1 July 2011 to 30 June 2012)
Adelaide $6,200 (155 STCs) $4,960 (124 STCs) $3,720 (93 STCs)
Brisbane $6,200 (155 STCs) $4,960 (124 STCs) $3,720 (93 STCs)
Canberra $6,200 (155 STCs) $4,960 (124 STCs) $3,720 (93 STCs)
Darwin $6,880 (172 STCs) $5,520 (138 STCs) $4,120 (103 STCs)
Hobart $5,320 (133 STCs) $4,240 (106 STCs) $3,160 (79 STCs)
Melbourne $5,320 (133 STCs) $4,240 (106 STCs) $3,160 (79 STCs)
Perth $6,200 (155 STCs) $4,960 (124 STCs) $3,720 (93 STCs)
Sydney $6,200 (155 STCs) $4,960 (124 STCs) $3,720 (93 STCs)

Householders considering installing small-scale renewable energy systems are encouraged to shop around for the best deal.

Transitional Arrangements

Following a Government announcement on 5 May 2011 to change the Solar Credits multiplier for installations from 1 July 2011, transitional provisions will recognise written contracts entered into prior to 5 May 2011, for system installation from 1 July 2011 to 30 June 2012, where the contract was made on the basis of the previous multiplier of four, but only where a number of conditions have been met. For more information on transitional arrangements please see the Solar Credits for Small Generation Units Fact sheet. 

Solar Hot Water Systems

The level of support a solar water heater would receive under the SRES will depend on the amount of renewable energy it uses to displace fossil-fuel energy, as well as the system type, its size and location. Generally, the level of RET support for solar water heaters is around $1,200. Householders considering installing solar water systems are encouraged to shop around for the best deal.

The Renewable Energy Bonus Scheme 

In addition to support under the RET, Australian Government rebates are available for solar hot water systems under the Renewable Energy Bonus Scheme (REBS). The REBS solar hot water rebate allows eligible households to claim a rebate of $1,000 for a solar hot water system or $600 for a heat pump water heater.