Small-scale Renewable Energy Scheme

The Small-scale Renewable Energy Scheme, commonly called the SRES, is an Australian Government programme that provides a financial incentive for households and small businesses to install renewable energy systems. It is the mechanism behind what most people call the "solar rebate".

Under the SRES, when you install an eligible solar panel system, solar hot water unit, or heat pump, the system generates a set number of Small-scale Technology Certificates (STCs). These certificates have a tradeable value, and in most cases your installer will discount the cost of your system in exchange for the right to sell those STCs on the open market.

The SRES has been running since 2011 as part of Australia's Renewable Energy Target. It is designed to encourage the uptake of small-scale renewables by making systems more affordable upfront. The scheme is separate from any state-level rebates or feed-in tariffs, meaning you can claim STCs alongside other incentives.

The process is straightforward. You decide to install solar panels. Your installer calculates how many STCs your system will generate based on its size, location, and the remaining years until the scheme ends. Before or at the time of installation, the installer creates those STCs electronically through the Clean Energy Regulator's registry.

Rather than asking you to trade the certificates yourself, most installers offer a point-of-sale discount. They reduce the price of your system by the value of the STCs, then sell the certificates themselves to recoup that amount. This is why the "rebate" appears as a discount on your quote rather than a separate payment from the government.

The buyers of STCs are typically large energy retailers and industrial companies that have a legal obligation to surrender a certain number of certificates each year. This obligation creates consistent demand for STCs and keeps their market price relatively stable.

The number of STCs depends on three factors: system size, your location (zone rating), and the deeming period (how many years remain until 2031). The formula is:

Here is a worked example for the most common scenario: a 6.6kW system installed in Sydney (Zone 3, rating of 1.382) in 2026, with a deeming period of roughly 5 years.

Your installer will calculate the exact number for your postcode. Systems in sunnier parts of Australia (Zones 1 and 2) receive a higher zone rating and therefore more STCs for the same system size.

Australia is divided into four zones based on average solar irradiance. The zone rating reflects how much sunshine your area receives and directly affects how many STCs your system generates.

Most Australians live in Zone 3. If you are in a sunnier zone, you will receive more STCs and a larger upfront discount.

Each STC has a market value that fluctuates based on supply and demand. The Clean Energy Regulator sets a price ceiling of $40 per certificate, and the spot price typically trades between $37 and $40.

Your total discount is simply the number of STCs multiplied by the price per certificate. Some installers use a slightly lower price to account for trading costs and market fluctuations, so the discount on your quote may be marginally less than the theoretical maximum. It is worth asking your installer what STC price they are using in your quote.

The SRES does not end suddenly. Instead, the deeming period shortens by one year, every year. This means that each year you wait, your system creates fewer STCs, and the upfront discount gets smaller. By 2031, the deeming period reaches zero and no new STCs can be created.

Here is how the deeming period and approximate STC count (for a 6.6kW system in Zone 3) change year by year:

Installing in 2026 rather than 2029, for example, means roughly 50 additional STCs. At $38 each, that is about $1,900 more in upfront savings. The financial case for installing sooner is clear.

In practice, you do not "claim" STCs directly. Your installer manages the entire process. Here is how it typically works:

1. You get a quote that already shows the STC discount applied to the price.
2. You sign a form assigning your STCs to the installer (or their STC agent).
3. The installer creates the STCs through the Clean Energy Regulator after installation.
4. The installer sells the STCs on the open market to recover the discount they gave you.

Your system must be installed by a SAA-accredited installer (formerly CEC-accredited) using approved equipment to be eligible for STCs. If an installer is not accredited, you will not receive the discount. This is one of the most important things to check before signing a contract.

Solar panels are not the only technology eligible for STCs. Solar hot water systems and heat pumps also qualify under the SRES. If you are replacing an old electric or gas hot water system with a heat pump, you can receive STCs that reduce the purchase price in the same way as solar panels.

Home batteries, however, are not currently eligible for STCs. Battery incentives come from separate state-based programmes, such as Victoria's Solar Homes battery rebate or the South Australian Home Battery Scheme. If you are considering adding a battery, check the rebates page for available state incentives.

Small wind systems and micro-hydro systems are also technically eligible, though these are far less common in residential settings.