Commercial & Business Solar Rebates Australia

Business Solar Rebates in Australia

 

No matter what size your business, switching onto solar can be a smart move. For 9-5 businesses in particular, solar panels are ideal. A well-designed commercial solar power system can be cashflow positive from 1 day.

Now, there are several generous business solar rebates in Australia that make solar an even more attractive business proposition.

This page describes some of the commercial solar rebates available to help accelerate the payback time for business solar in Australia, namely:

  1. Federal Government business solar rebates
  2. Feed-in tariffs
  3. State government commercial solar rebates

Kuga can advise you on grants for solar power for your business. For more information on any of the below, contact our commercial solar experts via our online form.

  1. Federal Government Solar Rebates

Under the Federal Government’s Renewable Energy Target there are two legislated schemes that provide an incentive for installing commercial solar power systems:

  • Large-scale Renewable Energy Target (LRET)
  • Small-scale Renewable Energy Scheme (SRES)

The LRET creates Large-scale Generation Certificates (LGCs), whilst the SRES creates Small-scale Technology Certificates (STCs).

The purpose of LGCs and STCs is to provide businesses and – in the case of STCs – households as well as businesses with an incentive to invest in renewable energy.

LGCs and STCs have proven to be one of the government’s most successful financial incentives for solar, resulting in Australia having the highest installed solar PV capacity per capita in the world.

What’s the difference between LGCs and STCs? 

Business installing solar power systems less than 100kW are eligible for STCs; larger systems qualify for LGCs.  The table below shows the main differences between LGCs and STCs.

Main differences between LGCs and STCs

 LGCsSTCs
Eligible system size>100kW≤ 100kW
When the incentive is paidUpfront (deducted from the system cost)Yearly ‘rebate’
How it is calculatedThe number of STCs issued is based on how much electricity the system will generate until 2031.  One STC equals one megawatt hour or electricityOne LGC is created for every megawatt-hour of electricity your system generates
Tradeable commodityYesYes
Value of one STC, at 14/12/2021 (spot price)$39.00$43.25
End date of scheme31 December 203031 December 2030
Annual reduction in valueYes, approx. 6-7% annuallyNo – amount paid will depend on market price and megawatt hours of electricity generated for the period.
How is it paid to businesses?Standard practice is that the customer signs over the STCs to their Solar Retailer who deducts the STC value from the cost of the systemThe business can choose to trade their LGCs themselves, but generally it is more efficient to enter into an agreement with the Solar Retailer to on-sell LGCs.

Whilst both STCs and LGCs are excellent ways of reducing the cost of solar, businesses who want to minimise the upfront system cost generally prefer STCs.  This is because the value of STCs is received as an immediate benefit in the form of a point-of-sale discount on the sales invoice.  LGCs, on the other hand, are paid over several years.

LGC rebates upfront

Kuga can pay your expected LGC revenue upfront if this is preferable for your business. Receiving the LGC revenue upfront reduces capital cost of your system which may be advantageous if the solar project is budget restricted.

STC & LGC Phase-Out

The Federal Government has stated that the value of STCs will reduce each year by around 6-7 per cent. This will continue up the end of 2030 when the scheme is completely phased out. This means the sooner your commercial solar power system is installed, the more your business will save on the upfront cost.

LGCs will also be phased out by end of December 2030.  Whilst there is no stated reduction in LGC value from the Federal Government, the chart below shows that the value of LGCs has declined over the last 4 years. Delaying purchase of a 100kW-plus commercial solar system means taking the risk that the value of LGCs will fall further.

Source: Renewable Energy Hub

Energy Efficient Communities Program

The Federal Government is also targeting solar uptake through its Energy Efficient Communities Program. A new round is opening for businesses in the food and beverage manufacturing sector from January 2022.  Whilst not offering grants for solar, there is money available for investment in monitoring systems to better manage energy use and energy audits.

At Kuga, we monitor government solar grant programs closely and know what’s available and when. To find out if there’s a grant program suitable for your business, get in touch.

  1. Feed-in tariffs – available nationwide

Whilst solar feed-in tariffs are not a solar rebate, they are a financial incentive for installing solar.  With feed-in tariffs, your business is paid a rate per kilowatt hour for any excess solar electricity exported to the grid.  This appears on your electricity bill as a solar credit (or words to that effect).

Australian solar feed-in tariffs have reduced in value compared to 10 years ago; they also vary from state-to-state with only the Victorian Government setting a mandated minimum feed-in rate.

Now worth around 7-10 cents per kilowatt hour – sometimes more – depending on your location, retailer and tariff structure they should be seen as the ‘icing on the cake’.

These days, the main way to save with solar is to maximise usage of the solar power generated within your business operations rather than exporting it to the grid.  That’s because the rate you’ll pay for grid electricity will be around 2-3 times higher than the amount paid for solar exports.

Getting the best rate for electricity and the solar feed-in is time-consuming but important. It can make a substantial difference to your bottom line.

Kuga provides an energy audit service to commercial clients which includes electricity rate and contract review.  Get in touch if this is of interest.

  1. State Government Solar Rebates

As of December 2021, Victoria is the only state in Australia with a state government scheme that provides businesses with rebates for purchasing a solar PV system.

Some other states offer low-interest financing for commercial solar power system, and from time-to-time grants for solar power are announced.  These can be for the agricultural sector (such as Agriculture Victoria’s On-Farm Energy Grants) and can be significant in value.  Get in touch to find out what’s available in your state.

Victoria’s Solar for Business Program

Designed for small business, this program provides a business solar rebate worth up to $3,500 (at December 2021).  Once all 5,000 forecasted rebates have been allocated for 2020-2021, the rebate value will drop to $1,750.

The rebate covers up to 50 per cent of the cost of the rooftop solar system and works as an upfront discount on the purchase price.

Both businesses that own their premises, as well as those who rent can apply for the Victorian business solar rebate.

The rebate is for approved solar PV systems up to 30kW.

All types of organisations – excluding government organisations – can apply for this rebate.  Eligibility criteria include:

  • Must employ at least one person, not including the business owner, and less than 20 people
  • Operate from premises that are non-residential and individually metered
  • Have not previously received a Solar for Business rebate
  • System is installed by a Solar Victoria approved solar retailer – such as Kuga
  • Solar system components are on the Solar Victoria approved product list

It’s also worth knowing that if you have a farming business which uses the same meter for the farm and your home, you can still access the rebate providing the farm will receive the benefit of the energy generated by the solar power system.

What solar rebates is your business is eligible for?

For expert, up-to-the-minute advice on commercial solar rebates, get in touch with our commercial solar team at Kuga today. With over 5,000 commercial solar projects successfully delivered in the last 5 years Australia-wide, we have the know-how to help you get the best solar rebates and maximise the return on your solar investment.

  • partner-logo01
  • partner-logo01
  • partner-logo01

TALK TO OUR EXPERTS

Get Quote Call Now

Request a Call Back