FINANCIAL INCENTIVES

Incentives2019-01-10T23:29:25+00:00

Financial Incentives to Meet Australia’s Renewable Energy Target

The Australian Government instigated the Renewable Energy Target in 2001. The purpose of the scheme is to reduce the nation’s greenhouse gas emissions by stimulating the generation of electricity from renewable sources. By 2011, the plan was split into two initiatives; the Small-scale Renewable Energy Scheme (SRES) and the Large-scale Renewable Energy Target (LRET). These financial initiatives are commonly referred to as rebates, as they enable owners of solar energy systems to recoup some of the costs associated with purchase and installation.

What Is An STC?

The SRES provides a financial incentive for both individual residences and small businesses to install renewable energy systems, with a capacity of up to 100kW, like solar photovoltaic (PV) panels. Small-scale Technology Certificates (STCs) are issued once an eligible system is installed.

These certificates are valuable, because they can be traded with electricity retailers; who have a legal responsibility to surrender certificates to the Clean Energy Regulator.

Homeowners and small businesses often choose to assign the rights of their certificates to registered agents like Sovereign Solar. As a result, we’re able to offer these customers a discount on their solar system. The discount can vary, as the market value of the STC fluctuates.

LGCs

Similarly, the LRET creates a financial incentive for power stations to generate electricity from renewable sources. Large-scale Generation Certificates (LGCs) are produced by accredited power stations which have a legal obligation to trade certificates before relinquishing them to the Clean Energy Regulator, annually.

How Many Certificates Will Be Generated?

There are a number of factors which influence how many certificates are generated for each system. This includes the size of the system, plus the amount of electricity produced; at a rate of one certificate for every megawatt hour (Mwh) of power generated. The location of the system, based on the solar radiation rating associated with each postcode zone, and the deeming period – the number of years remaining until the scheme ends in 2030. The Renewable Energy Certificate (REC) Registry offers a free online tool which calculates the approximate number of STCs you can expect your system to generate. It should be used as a guide only. Alternatively, you can contact a Sovereign Solar consultant to obtain a free quote on your discounted solar system.

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Earn Money With A Feed-In Tariff When You Install Solar

Feed-in Tariffs (FiTs) are designed to incentivise the adoption of renewable energy. FiTs help reduce the period of time it takes to recoup the costs of installing a solar system, by delivering electricity bill savings, thus making solar power more affordable. Both individuals and businesses residing within a property have the opportunity to earn money, in the form of a FiT, for the energy their solar system produces. There is no national FiT scheme in Australia, so tariff rates and eligibility requirements vary by state. Consequently, various factors such as your location, the size of your system and your chosen electricity retailer can affect FiT rates. Therefore, Sovereign Solar highly recommends you compare the FiT rates offered by retailers in your area to ensure you get the best deal.

After installation of your solar PV system, you can submit an application to the relevant electricity distributor or relevant authority in your state, for a FiT. If you are eligible, you will need to enter into a FiT contract which utilises either gross or net metering. Gross metering involves sending all the power your system produces to the grid, and then importing energy as you need it. In contrast, net metering means your premises utilises the energy produced by your system first. Then afterwards, any surplus energy generated can be sent to the main grid. From here, the electricity can be redistributed to other homes and businesses.

Compare FiT Rates

Check out the comparative table below as an example of how FiT rates can vary between states.

State Region FiT Type Tariff Electricity Distributor
Queensland Regional QLD Flat rate Feed-in Tariff 9.369 cents per kilowatt hour for the 2018-2019 year. Available via either Ergon Energy Retail on the Ergon Energy network, or Origin Energy on the Essential Energy network.
Queensland Regional QLD Time-varying Feed-in Tariff 13.730 cents per kilowatt hour on peak (between 3pm-7pm).

5.796 cents per kilowatt hour off-peak.

Available via Ergon Energy Retail on the Ergon Energy network.
Queensland South East QLD Market Feed-in Tariff Electricity retailers voluntarily offer competitive FiT rates. FiTs are monitored by the Queensland Competition Authority.
Victoria Minimum single-rate Feed-in Tariff 9.9 cents per kilowatt hour Minimum FiT rates are set by the Essential Services Commission (ESC).
Victoria Time-varying feed-in Tariff 7.1c/kWh (off-peak), 10.3c/kWh (shoulder hours), 29c/kWh (on-peak) Minimum FiT rates are set by the Essential Services Commission (ESC).
Compare FiT Rates
Gross Metering Net Metering
In the past, the government offered rebate schemes to incentivise the uptake of solar energy. Some of these schemes operated on gross metered feed-in tariffs, where all the energy generated by a small commercial and personal solar systems was exported, to be used by anyone connected to the power grid. When your property required power, it would import energy back from the grid. You paid for the energy your premises used and were compensated for the power you contributed to the grid. In contrast, net metering utilises the solar energy generated by the local system to power the property. Any surplus power is then sent to the power grid and you receive a rebate in the form of a feed-in tariff. However, if you use more energy than your solar system produces, then you will be charged for the additional power you use from the grid.

Net metering enables commercial installations to save money, by only using energy produced by the solar system during the day. This is considered an ‘avoided cost,’ which is highly valued by businesses.

Gross Metering

In the past, the government offered rebate schemes to incentivise the uptake of solar energy. Some of these schemes operated on gross metered feed-in tariffs, where all the energy generated by a small commercial and personal solar systems was exported, to be used by anyone connected to the power grid. When your property required power, it would import energy back from the grid. You paid for the energy your premises used and were compensated for the power you contributed to the grid.

Net Metering

In contrast, net metering utilises the solar energy generated by the local system to power the property. Any surplus power is then sent to the power grid and you receive a rebate in the form of a feed-in tariff. However, if you use more energy than your solar system produces, then you will be charged for the additional power you use from the grid.

Net metering enables commercial installations to save money, by only using energy produced by the solar system during the day. This is considered an ‘avoided cost,’ which is highly valued by businesses.

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