Change on the Horizon for Solar – Get Your System Before It’s Too Late!
We’re letting you in on a secret to minimise your upfront solar costs now, before you lose the chance.
If you’re lucky enough to be in the position to buy a solar system right now, we have some words of advice for you… don’t delay! Right now, solar system expenses are being subsidised by a Government scheme that reduces the cost of a typical 5kW system by around $3,500 installed (or approximately $700 per kW). This subsidy is generally applied to the sale price of the systems you see advertised, so you don’t even have to worry about claiming this little discount – it’s already applied by solar retailers, in most cases.
This subsidy is called the Solar Rebate Financial Incentive (NOTE: this is not the feed in tariff) and it’s not means tested. To be eligible for it, you just need to install a system that’s smaller than 100kW in size, have it installed by a Clean Energy Council accredited professional (which we are) and only use inverters and solar panels that are approved for use in Australia by the Clean Energy Council (ours are). That’s it.
Now, you might remember that the Abbott Government tried really hard recently to have the Renewable Energy Target (RET) scrapped. If you do remember this, perhaps you also remember that it was saved by only one vote in the Senate, meaning it got through by the skin of its teeth. The subsidy we’re referring to is part of the RET and if it had been voted out, this subsidy would have been scrapped too and the price of solar systems would have risen by around a whopping 40%!
As it stands right now though, the legislation applied to the RET means this subsidy will steadily drop – between now and 2032, the subsidy will reduce by around 1/15th per year until it reaches zero. So, even if you were to wait a few years to buy yourself a solar system, you’d only be losing out by an amount under $500. Yes, we realise that’s quite a substantial loss to some, but the alternative is even worse…
If the Turnbull Government is voted in to both houses as a result of the upcoming double dissolution, we could lose the whole subsidy!!!
That’s right – if the Liberal Government gets through, the likelihood of the RET being scrapped is very high. Some commentators suggest that Turnbull is a pro-solar good guy and maybe he is, but maybe – just maybe – he will do the same thing that 99% of politicians do and buckle under the pressure of their cabinet. If that happens (and we wouldn’t bet a dollar on the alternative) you can kiss affordable solar system prices goodbye. If, like us, you believe that there’s a good possibility this could eventuate, it’s most definitely a good idea to invest in solar right now.
But wait, there’s more…
Even if none of this RET scrapping eventuates – perhaps Labor will take the win or Turnbull turns out to be what his fans hope he will be – there’s still a slight problem for those waiting to invest. You see, many people don’t realise that the above-mentioned subsidy amount changes with solar demand. What that means is, if solar system demand suddenly increases, the overall price of the subsidy reduces. This occurs because of the STC Creation mechanism, which works like this:
- The Government has mandated that all fossil fuel generator companies need to either build renewable energy sources, or buy Renewable Energy Certificates (RECs), which the Government has printed out.
- These RECs are bought by said non-renewable energy companies to offset their pollution if their renewable sources don’t counteract all of the pollution they cause, or they don’t want to participate in the safekeeping of Mother Earth by building renewable sources in the first place (and unfortunately, there are plenty of RECs being bought).
- By buying these RETs, polluting companies are actually buying the right to other people’s renewable energy systems, like yours.
- For each individual who installs solar, the Government allocates a certain number of RETs to their system, depending on its size and location (and for residential systems, these are called Small Scale Technology Certificates (STCs)).
- Your solar retailer (or you yourself, in rare cases) sells these STCs to polluting companies, then you receive the subsidy discount created by this sale, which is usually taken off the upfront cost of your system..
- STC prices are similar to shares, in that they fluctuate in price, depending upon supply and demand.
- Because of this price fluctuation, the prices drop when the solar industry is strong and installing lots of new systems (causing lots of STCs to flood the market). Alternately, they rise when the solar market is weaker.
Right now, the price of STCs are sitting at just under $40, which is the highest price they can go, by law. This means there’s almost no chance – under the Liberal Government – that the subsidy you’ll get for selling your RTCs will be any higher than they are right now!
So, where does that leave You, you may be wondering? Unfortunately, you’re stuck between a rock and a hard place because you either:
- buy a solar system right now and take advantage of the subsidy at the highest price it will ever be, or
- Wait a little while and get caught with a price rise, due to other people flooding the market in their attempt to get solar at the price its at now, or
- Wait until after the new election and – if the Liberals are voted back in – lose around 40% of the current purchase prices.
The only other alternative is that labor wins, which would be the best possible outcome from a solar perspective, but even then, there’s no guarantees.
If your still not convinced, consider this: When the government first hinted that it was going to scrap the subsidy a few years ago, solar system demands caused the prices of STCs to drop all the way down to just $17.50. This means on, say, a 3kW system, you’d claim back around $2,100 right now, but if the price drops to a similar level as lady time, you’d only get around $1,000. Ouch. Then if the whole thing is scrapped, you’ll get nothing, zero, zip, nada!
So, if you’re thinking of getting solar, don’t delay. Thankfully, we at Hush Energy can help you install right now, so no matter what happens, you’ll be set up for the best price. Contact us today to find out how!