Solar Rebates
The Solar Rebate Is Shrinking: What the STC Phase-Out Means for You
The federal solar rebate loses value every single year and disappears entirely after 2030. Here is exactly how STCs work, what they are worth year by year, and whether you should act now or wait.
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By Bec Ramirez
9 min read
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If you have been researching solar panels at any point in the last few years, you have almost certainly heard some version of “the rebate is ending soon!” from an eager salesperson. It is the oldest trick in the solar sales playbook, and I completely understand why most people tune it out.
This time, though, the salespeople have a point: the federal solar rebate really is declining every year. It is not ending tomorrow, but it is getting smaller with each passing January, and the scheme will disappear entirely after 2030. There is no replacement on the table.
Having spent countless hours on r/AusSolar and Whirlpool forums, I know the confusion around this topic is enormous. People mix up feed-in tariffs with the upfront rebate, think the government sends them a cheque, or assume the whole thing ended years ago. If you need a refresher on the basics, our guide to understanding solar covers the fundamentals. So let me break down exactly what the federal STC scheme is, how the phase-out works, and what it actually means for your hip pocket.
What Are Small-Scale Technology Certificates (STCs)?
The solar “rebate” is technically not a rebate at all. The government does not post you a cheque. Instead, the discount you see on your solar quote comes from a tradeable certificate system called Small-scale Technology Certificates (STCs), administered by the Clean Energy Regulator.
Here is the simplified version of how it works:
- Your system is assigned certificates. When you install solar, the Clean Energy Regulator calculates how many STCs your system is entitled to based on three factors: system size (in kilowatts), your postcode zone (sunnier areas like the Northern Territory earn more), and the number of years remaining in the scheme (the deeming period).
- Your installer trades them for you. You sign your STCs over to your installer, who then sells them on the open STC market. Large energy retailers are legally obligated to buy a set number of STCs each year under the Renewable Energy Target, which creates the demand.
- You receive an upfront price discount. The value your installer receives from selling those STCs gets deducted from your system quote as an upfront discount. You never see or handle the certificates. The installer gives you a cheaper price and recoups the difference through the STC trade.
The formula is straightforward: STCs = system size (kW) × zone rating × deeming period (years). Each STC trades at roughly $38 on the open market, though this fluctuates. Multiply the number of STCs by the spot price and you get your total discount.
The critical thing to understand is the deeming period. This is the number of years left until the scheme ends on 31 December 2030. Every 1 January, the deeming period drops by one year, which means fewer certificates, which means a smaller discount for you.
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The Phase-Out Schedule: How the Rebate Shrinks Each Year
The STC scheme was designed from the outset to phase out gradually. It started in 2011 with a 15-year deeming period, and that period has dropped by one year every January since 2017. The idea was to incentivise early adoption and then let the scheme fade away as solar became mainstream.
In practice, this means that every year you wait to install solar, your system earns fewer STCs and the discount shrinks. There is no mechanism to reverse or pause this. It is legislated and automatic.
| Installation Year | Deeming Period | STCs Remaining vs 2024 |
|---|---|---|
| 2024 | 7 years | 100% |
| 2025 | 6 years | ~86% |
| 2026 | 5 years | ~71% |
| 2027 | 4 years | ~57% |
| 2028 | 3 years | ~43% |
| 2029 | 2 years | ~29% |
| 2030 | 1 year | ~14% |
| 2031 | 0 years | 0% (scheme ended) |
What does “1/15th each year” mean? The original scheme started with a 15-year deeming period. Each year, one-fifteenth of the total deeming capacity is removed. In the early years (2011 to 2016) the deeming period was capped at 15, so the reduction did not bite. Since 2017, each 1 January strips one year from the deeming period, directly reducing the number of STCs new installations can claim.
What This Means in Dollars: 6.6kW System Year by Year
Here is the approximate STC discount, in dollars, for the most popular residential system size: a 6.6kW system in STC zone 3 (which covers Sydney, Melbourne, Brisbane, Adelaide, and most of populated Australia), assuming an STC spot price of around $38:
| Year | Deeming Period | Approx. STCs | Rebate Value (6.6kW) | Year-on-Year Loss |
|---|---|---|---|---|
| 2024 | 7 years | ~63 | ~$2,394 | N/A |
| 2025 | 6 years | ~54 | ~$2,052 | −$342 |
| 2026 | 5 years | ~45 | ~$1,710 | −$342 |
| 2027 | 4 years | ~36 | ~$1,368 | −$342 |
| 2028 | 3 years | ~27 | ~$1,026 | −$342 |
| 2029 | 2 years | ~18 | ~$684 | −$342 |
| 2030 | 1 year | ~9 | ~$342 | −$342 |
| 2031 | 0 years | 0 | $0 | Scheme ended |
Important caveat: These figures assume an STC spot price of approximately $38 per certificate, which has been relatively stable recently. The actual price can fluctuate with market supply and demand. Your installer will quote based on the prevailing rate at the time of purchase. For the exact rebate on your system size and postcode, try our solar calculator.
Should You Rush to Buy Before the Rebate Drops More?
This is the question I get asked more than any other on the forums. And I want to give you an honest answer rather than the panicked “BUY NOW OR MISS OUT FOREVER” line that some installers push.
The rebate decline is real, but it is not a cliff edge. The difference between installing in 2026 versus 2027 is approximately $342 for a 6.6kW system. That is meaningful money, but it is not a reason to panic-buy a system you have not properly researched.
However, the rebate is only part of the equation. Every year you wait, you also miss out on approximately $1,200 to $1,500 in electricity bill savings. That is the real cost of delay. Add the rebate loss and the missed savings together, and the total cost of waiting one year is roughly $1,500 to $1,800.
Reasons to Act Sooner
- Rebate is ~$1,710 now, dropping to ~$1,368 in 2027
- Every month without solar costs $100 to $125 in missed savings
- Electricity prices keep rising with no sign of stopping
- The rebate has never increased and never will
Reasons It Is Okay to Wait a Bit
- Panel prices may fall slightly due to manufacturing oversupply
- Battery technology is improving rapidly
- The per-year loss is ~$342, not thousands
- Choosing the right installer matters more than timing
My honest take: Do not panic. Do not let an installer pressure you into a snap decision. But also do not keep kicking the can down the road year after year. If you have been thinking about solar for a while and your roof is suitable, 2026 is a genuinely good year to act. The rebate is still worth $1,710 for a 6.6kW system, the technology is mature, and your savings start from day one. Our look at whether solar is worth it in 2026 has the full picture.
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The Bigger Picture: Will Falling Panel Prices Offset the Declining Rebate?
This is the counter-argument I see on Whirlpool all the time: “Sure the rebate is dropping, but panel prices are falling too, so it will wash out.” It sounds logical, but the numbers no longer back it up.
Solar panel manufacturing costs have been falling, thanks to massive oversupply from Chinese manufacturers and continued efficiency improvements. Wholesale panel prices dropped significantly through 2023 and 2024. But much of that decline has already been passed through to retail prices. The easy gains are largely behind us.
Meanwhile, several factors are putting upward pressure on system costs: record silver prices (a key material in solar cell manufacturing), labour cost inflation for installers, and the potential impact of trade policy changes on module imports. There is also the growing cost of electrical infrastructure upgrades (switchboards, grid connection) that are not affected by panel price trends.
The net result: the total out-of-pocket cost for a fully installed solar system is unlikely to drop significantly from here. Panel prices may fall a little, but the shrinking rebate and rising labour and material costs are working in the opposite direction. For a detailed breakdown of what systems cost right now, see our solar panel cost guide.
The waiting game does not work like it used to
Between 2015 and 2022, waiting a year often did save you money because panel prices were falling fast. That era is over. From 2024 onwards, the shrinking rebate is outpacing any remaining panel price declines. Every year you wait, the net cost of going solar is either flat or slightly higher. The old advice of “wait for it to get cheaper” no longer applies.
State Rebates That Are Still Available
The federal STC scheme is the big one, but it is not the only incentive available. Several states run their own solar and battery programs that stack on top of the federal discount. Here is a quick overview of what is available as of early 2026:
Victoria: Solar Homes Program
Victoria's Solar Homes program offers rebates and interest-free loans for solar panels and batteries. Eligible owner-occupiers can access up to $1,400 in rebates plus interest-free loans repayable over four years. The Victorian Energy Upgrades program provides additional support. One of the most generous state schemes in the country.
South Australia: Home Battery Scheme
SA's Home Battery Scheme closed to new applications in 2022, so battery buyers in SA now rely on the federal Cheaper Home Batteries program and VPP incentives. Solar panel installations benefit from STCs and some of the highest electricity prices in the country, meaning fast payback.
New South Wales: Peak Demand Reduction Scheme
NSW offers incentives through the Peak Demand Reduction Scheme and Energy Savings Scheme. These programs provide interest-free loans and certificate-based incentives for solar and battery installations. The programs are designed to reduce peak grid demand, so battery-ready systems can attract additional value.
Queensland, WA, ACT, NT & TAS
Other states offer a mix of battery rebates, interest-free loan schemes, and concession-holder subsidies. Programs vary in availability and may have waiting lists or eligibility caps. Queensland offers battery incentives for regional households. WA provides a battery rebate of up to $1,300 (Synergy) or $3,800 (Horizon Power) for eligible homes. ACT runs the Next Gen Energy Storage program for batteries.
For a full breakdown of every incentive available in your state, including eligibility criteria and how to apply, see our rebates guide.
The Battery Rebate Is a Separate Thing Entirely
One of the most common points of confusion I see on forums is people conflating the STC rebate with the battery rebate. They are two completely different schemes, and understanding the distinction matters.
The STC scheme is the tradeable certificate system we have been discussing. It applies primarily to solar panels (and small-scale batteries to a lesser degree). It is being phased out by 2031.
The Cheaper Home Batteries program is a separate $7.2 billion federal initiative (expanded from $2.3B in December 2025) introduced to support battery adoption. It provides approximately 30% off the cost of a home battery system ranging from 5kWh to 100kWh. For a typical 10kWh battery, that works out to roughly $2,584 off the purchase price.
The good news: you can stack both incentives. If you install solar panels and a battery together in 2026, you benefit from the STC discount on the solar component and the Cheaper Home Batteries subsidy on the battery. For a 6.6kW solar plus 10kWh battery package, the combined federal incentives can knock $4,066 to $4,598 off the total price.
One important change to be aware of: from 1 May 2026, battery STCs will use a tiered structure based on battery size. The first 14 kWh of capacity still receives 100% of the STC factor. Capacity from 14 to 28 kWh drops to 60%, and 28 to 50 kWh receives just 15%. The STC factor itself will also decline every six months instead of annually. For most households installing a standard 10 to 13.5 kWh battery, the 100% tier still applies, but larger systems will see a reduced rebate per kWh.
The CER has also introduced new photo compliance requirements from 1 March 2026. Installers must now submit geotagged, timestamped photographs of critical labelling and signage for every battery installation. This does not affect you directly as a homeowner, but your installer has to meet these requirements for your STC claim to be processed.
STC Scheme (Solar)
- Tradeable certificate system
- Reduces upfront solar panel cost
- Being phased out, ends Dec 2030
- Worth ~$1,710 for 6.6kW in 2026
Cheaper Home Batteries
- Direct percentage-based subsidy
- Reduces upfront battery cost by ~30%
- Separate from STCs, different timeline
- Worth $2,584 for a 10kWh battery (68 certificates at $38)
Sources
The next step
If you're considering solar panels or batteries for your home, Bec and the team can match you with one Why Solar Approved installer near you for a free written quote, and fifteen minutes with a solar expert before you sign.
Written by
Aussie Mum & Energy Expert
Helps families switch to solar with practical, real-world advice. Bec focuses on the financial side: rebates, bill savings and financing options, so everyday Australians can see real value from going solar.
If you have any questions about the information in this guide, email hello@whysolar.com.au or call +61 2 5657 6527.