Solar system government scheme. Other things you should know about the subsidy

The “Solar Panel Rebate” (that we are not allowed to call a rebate!)

If you buy a solar system in 2023, it is subsidised by a federal government scheme worth about 396 per kW installed. This is based on a 36 STC price after fees – I explain this later. That’s around 5000,590 off on a typical 6.6kW system that is usually applied at the point of sale; i.e. any advertised you see almost certainly have the solar rebate already applied.

You can discover the maximum solar rebate you are entitled to with this STC calculator

Is this subsidy in danger of ending soon, or being scrapped entirely?

Well – current legislation means the solar rebate started to reduce by one fifteenth every year from Jan 2017 until it drops to zero in 2031. At this point, there’s no confirmed danger of the panel rebate being scrapped entirely for the foreseeable future.

While the subsidy seems safe for now, what most people aren’t aware of is the dollar value of this ‘solar rebate’ can be significantly reduced at any time if demand for solar systems suddenly increases along with other factors coming into play.

How so? I go over the exact mechanism (known as STC creation) further down the page, but in a nutshell, the subsidy system is designed to ‘self regulate’.

What that means is that if the market for solar power runs too hot, the value of the ‘rebate’ may reduce in step with a thing called the ‘STC price’. The STC price can be anywhere from

The solar rebate that is not officially a rebate!

To make things confusing, the current “rebate” for anyone buying a solar system of up to 100kW is called the STC program. Which stands for Small-scale Technology Certificate. The government says that this should not be called a “solar rebate”.

From the Clean Energy Regulator website:

“Under the Small-scale Renewable Energy Scheme the reduction in the cost of your solar panel is not a rebate. You will not qualify for any Government-based financial recompense at the completion of any process relating to STCs.”

I think what our government friends are trying to get across is that the thousands of dollars you get off your solar system price (usually by assigning the rights to its STCs to your installer) does not actually come from the government.

It is a government program, but it compels other people to buy your certificates. So it is a government run scheme, using other people’s money to provide the subsidy.

Now, you could argue that all government subsidy and incentive schemes use other people’s money!

But I’m not gonna pick a fight with the Clean Energy Regulator (I’ve picked enough fights with the content on this website thank you very much) so from now on I will try to refer to the rebate as the “solar financial incentive” then!

The solar rebate financial incentive subsidises the upfront cost of installing a solar power system and is not means-tested in any way. The only criteria for claiming it are:

1) Your PV system is less than 100kW in size.

2) You get it installed and designed by a Clean Energy Council accredited professional.

3) You use solar panels and inverters that are approved for use in Australia by the Clean Energy Council.

Note: Do not confuse this ‘solar rebate’ with the Feed-in Tariff (FiT). The FiT is a subsidy where electricity retailers pay you for the electricity your solar system exports to the grid.

to 40. In other words, 40 is the highest value it is allowed to go to by law.

The higher the STC price the more ‘rebate’ you get.

At the moment, the value of the solar rebate is around 36 per STC after fees. This translates into a rebate of roughly 396 per kW installed. But situations can arise where the value is pushed down.

How low could the subsidy go? The lowest STC value was some years ago when it hit about 17. If it hits that again, the ‘solar rebate’ would be worth under 204 per kW installed – a greatly reduced subsidy.

Just to be clear, no-one can pretend to know what the STC price will be next week or next year. All we do know is that it can not go any higher than 40.

What is the rebate financial incentive worth to me?

I’m guessing what you really want to know is:

a) How much can I get off the price of a solar system?

b) How much will a solar power system cost me now, after the subsidy?

The short answer is:

If you want a 6.6kW system (for example), then you can get approximately 5000,590 off the total cost of the system in subsidies. The ‘rebate’ is worth roughly 396 per kW, so 6.6kW x 396 = 5000,613, but some rounding down of “partial” certificates is involved. You will get a proportionally bigger ‘rebate’ for larger systems, and less for smaller.

(If you are confused by this talk of “kW” (kilowatt) then there is a good explanation here)

So how much does this mean you will have to pay for a solar panel system?

Below are some ballpark figures for costs after the solar panel rebate. They will vary either way depending on the brand of panels and inverters each supplier uses, and their overheads, but if these are way out of your expectations, then solar panels may not be for you right now.

Keep in mind that adding the system cost to your mortgage can be surprisingly affordable if you take rising electricity costs into account – there is a solar payback calculator here for you to make your own mind up.

Note that the general price range for a good quality 6.6kW system in 2023 is 5,500 – 9,000, depending on installation location and the components used.

If you are interested in the financial payback of a system such as the 6.6kW system above, use our solar payback calculator – it takes into account rising electricity and your state’s feed-in tariff.

How the solar rebate financial incentive works

The feds have cleverly designed the rebate financial incentive to actually cost the government very little. Sneaky subsidy eh?

Here’s the subsidy scheme in a (8 part) nutshell:

1) The government creates virtual pieces of paper called Renewable Energy Certificates (RECs).

2) The government compels filthy fossil fuel generators to either build a certain amount of renewable generation (wind/solar power) or buy the right to the other people’s renewable energy systems in the form of RECs.

3) When you go and buy a solar power system for your roof, the government gives you a certain number of RECs depending on how big your system is, how much sun your part of Australia gets and the installation date.

4) The special type of RECs you get for a residential solar system are called “Small Scale Technology Certificates” (STCs).

5) You (or more likely your installer, who may also charge a small fee for handling the certificates) sell the STCs to the filthy fossil fuel generators. The value of the STCs is used to offset the upfront cost of the solar system purchase.

6) The STC price is a bit like a share price – it fluctuates on the open market depending on supply and demand. For example, when the solar energy industry is really booming then the STC price can drop.

7) You can see the current market price of a STC here. The blue line on the graph shows STC spot prices. But bear in mind that is the spot price. When you sign over your STCs to a solar installation company, as mentioned they’ll likely charge a fee of a few dollars per certificate to process them (saving you the headache and complexity), and that will come off the STC value.

8) Almost all solar power system you see advertised will already have the government solar panel rebate financial incentive included in the pricing – so the cost after the subsidy.

Why you should consider getting quotes for solar sooner rather than later

As mentioned above, the amount of ‘solar rebate’ you can claim depends on the current market price of an STC. At a market price of 36 after fees (for example), the ‘rebate’ is worth roughly 396 per kW installed. However, in times of high demand for solar panel installations, lots of STCs are created.

When supply of STCs increases too much, the STC price can decrease and the subsidy reduces – supply and demand – gotta love economics 101!

Some years back, when the government really looked like it was going to scrap the solar rebate entirely, demand for system installations caused the price of STCs to drop to 17.00.

So, if you bought a 6.6kW system today, you’d be eligible for a ‘rebate’ of roughly 5000,592. However, if demand for solar panels goes up too much or something else occurred that pushed the STC price down to 17.00 again, you’d only be entitled to a ‘rebate’ of around 450,224 for the exact same system. It’s a big difference.

If you get 3 free quotes for solar now, you’ll be locking in the current ‘rebate’ based on the current STC price – but if you wait, the STC price could drop and significantly reduce the savings from the subsidy you can claim.

Going Solar Made Easy with Green Sun Energy Services

New Jersey homeowners can take advantage of some really great solar incentives. As the owner of your solar panel system, you’ll receive sales tax exemption; property tax exemption; a 30% federal investment tax credit; 15-years’ worth of SREC income from New Jersey’s Clean Energy Program; and all of the clean energy that your system produces.

Because of these great incentives, you can finance your solar panel system for as little as 99 down and actually make a nice profit within the very first year. Or, if you have access to some cash, the combination of federal state incentives will typically enable you to break-even within 5 to 7-years.

With Green Sun Energy Services at your side, switching to clean and inexpensive solar power has never been easier. We’ll work with you to determine the best solar panels, inverters, warranties, and financing options for you and your family. Check out our Client Portfolio to see how much some of your neighbors are already saving with solar.

The Green Sun Difference

When it comes to going solar, you can trust the experts at Green Sun Energy Services. We make the process simple, affordable, and stress-free. Take control of your energy future and enjoy the benefits of clean, inexpensive solar power.

• Local Experts: Our team consists of knowledgeable and experienced solar energy experts who are well-versed in the latest industry trends and technologies. We are dedicated to delivering the highest standard of service.
• Superior Equipment: We only work with top-quality solar equipment and technology, ensuring optimal performance and maximum energy efficiency for your system.
• Aesthetically Pleasing Designs: We understand that the visual appeal of your solar system matters. Our designs blend seamlessly with your property, enhancing its aesthetics while harnessing the power of the sun.
• Dozens of Financing Payment Options: We work with three specialty banks offering low interest loans terms from five-years to twenty-five-years.
• Money-Back Guarantee: We are confident in the quality of our work and guarantee your satisfaction. If your system doesn’t produce 90% our contracted estimate, we’ll write you a check!
• Commitment to Long-Term Customer Relationships: Building lasting relationships with our customers is at the core of what we do. We are here to support you throughout your solar journey and beyond, providing ongoing maintenance and support.

Q: Are solar panels really free. or is free solar a scam?

If you’ve been researching solar panel system, you’ve probably heard at least one company advertise ‘free solar panels’ or seen ads that start with U.S. Government Pays Middle Class Families to Go Solar or New Jersey will pay you to install solar. These ads are typically lead capture scams to sell your information to solar leasing companies!

New Jersey’s Clean Energy Program does not offer free solar panel installations. All current NJBPU sponsored Solar incentive programs can be found at www.NJCleanEnergy.com/renewable-energ.

Here’s the deal: There is no such thing as a free lunch (or a free solar panel installation). Free solar panels are not actually free; you will pay for the electricity that they produce, usually under a 20-to-25-year solar lease or Power Purchase Agreement (PPA). Under both of these arrangements, a leasing company will put solar panels on your roof for no money up-front, keep all of the incentives, and charge you for the electricity that they produce.

That said, here are some common pitfalls associated with solar leasing:

• 20 Year Financial Commitment
• Potential for Annual Cost Increases
• Transferability Issues
• Limited Financial Incentives
• No Ownership of the Panels Bolted to Your Roof
• System Performance and Maintenance

Are ‘Free Solar Panels’ Really Free? (2023 Guide)

This guide has helped thousands of homeowners to avoid getting taken advantage of when going solar and provided them with actual ways to save money. Let’s get started!

Each product and or company featured here has been independently selected by the writer. You can learn more about our review methodology here. If you make a purchase using the links included, we may earn commission.

Written by Karsten Neumeister

Karsten is an editor and energy specialist focused on environmental, social and cultural development. His work has been shared by sources including NPR, the World Economic Forum, Marketwatch and the SEIA, and he is certified in ESG with the CFA Institute. Before joining EcoWatch, Karsten worked in the solar energy sector, studying energy policy, climate tech and environmental education. A lover of music and the outdoors, Karsten might be found rock climbing, canoeing or writing songs when away from the workplace. Learn About This Person

Reviewed by Melissa Smith

Melissa is an avid writer, scuba diver, backpacker and all-around outdoor enthusiast. She graduated from the University of Florida with degrees in journalism and sustainability studies. Before joining EcoWatch, Melissa worked as the managing editor of Scuba Diving magazine and the communications manager of The Ocean Agency, a nonprofit that’s featured in the Emmy award-winning documentary Chasing Coral. Learn About This Person

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Are ‘Free Solar Panels’ a Scam?

You may have seen advertisements or had someone knock on your door offering free solar panels. But are “free solar panels” really free? Let’s get this out of the way early — “free solar panels” are not really free.

There is no such thing as free solar panels, and there is no such thing as a no-cost solar program. If you’re hearing about “free” or “no-cost solar programs,” you’re likely being fed a cheap sales pitch to tempt you into signing a solar lease, or a power purchase agreement.

Under these solar financing agreements, a solar company installs solar panels on your home for no money down (hence, the misleading use of the word “free”), and you then pay a monthly rate for the clean energy those panels produce. Think about it as renting solar panels, or simply buying your power from a solar company instead of a utility company.

Zero-money-down installation, free maintenance, free enrollment, guaranteed savings written into the contract — these promises are all just a little too good to be true. We’ll get into the fine print on why “free solar” is so misleading, but if you’re looking to install solar panels on your home for

What Are Legitimate Solar Panel Financing Options?

The marketing strategies advertising “free solar panels” are designed to entice, but in many cases, solar leases and PPAs end up being impractical choices for homeowners. In some severe cases, solar companies have even faced lawsuits over falsely advertising “free solar panels” to unsuspecting customers who lost thousands by signing unfair contracts.

The average solar lease can indeed save a customer money, but only when things go smoothly. If you sign a solar lease and change your mind, sell your home or your system experiences production issues, you can run into costly surprise bills. Here’s why:

• Lease agreements have hefty cancellation fees, sometimes as high as 20,000.
• If you ever decide to sell your home, transferring a lease to a new homeowner can be challenging. If the new owner doesn’t agree to assume the solar lease, you might have to pay to move the panels to a new residence, or worse, be forced to cancel your lease.
• In a worst-case scenario, hiring a low-quality solar panel installation company can lead to issues with your home or roof. Solar leases may not offer workmanship warranties, so you could face bills for any damage to the integrity of your home.

Solar leases and solar PPAs are not themselves scams, but homeowners should be cautious and educate themselves before signing a lease. Make sure to always read the fine print. So, if “free solar panels” aren’t really free, what is the best way to pay for solar panels?

Paying for Solar Panels in Cash

Paying for solar in cash will yield the most long-term savings. By purchasing a home solar system outright, you’re essentially paying for about 25 years of discounted electricity at once. A cash purchase allows you to calculate home energy costs decades in advance, avoiding interest rates, fees and utility rate hikes.

down, it’s possible to do so with loan financing.

SunPower

SunPower designs and installs industry-leading residential solar and storage solutions across all 50 states. With a storied history of innovation dating back to 1985, no other company on this list can match SunPower’s experience and expertise.

SunPower earns its position as the top national installer on our list for a handful of reasons: It installs the most efficient solar technology on the residential market, offers the most expansive service area and backs its installations with a warranty well above the industry standard. All the while, SunPower pioneers sustainability efforts within the industry.

If that weren’t enough, SunPower systems come packaged with products all manufactured in-house by its sister company, Maxeon. This means that your panels, solar cells, inverters, battery and EV chargers are designed to work together and are all covered under the same warranty.

SunPower’s biggest downside? Its high-efficiency panels are considerably more expensive than most of its competitors’ products. However, its powerful panels are workhorses that make up for the initial cost with more backend production (think about this like spending more money for a car that gets more miles per gallon).

Blue Raven Solar

We like Blue Raven Solar because it understands that, for most homeowners, the cost of solar presents the biggest barrier to entry.

For that reason, Blue Raven Solar developed an innovative solar financing plan that offers in-house, flexible, zero-money-down options. The results speak for themselves, as Blue Raven Solar is now one of the fastest-growing solar companies in the nation and was recently acquired by SunPower. Its BluePower Plus plan (exclusive to Blue Raven) mimics the flexible structure of a lease while still providing the greatest benefits of owning your system.

Eligible homeowners enjoy 18 months of solar power before having to pay their first bill. When coupled with the federal solar investment tax credit (ITC), the initial energy savings can offset more than a third of the overall cost of a system before requiring a dollar down.

In contrast, other installers can only offer similar financing through solar leases, PPAs or third-party providers (such as Mosaic or Sunlight). Third-party loan providers can complicate the process, while opting for a loan or PPA will disqualify you from some of solar’s biggest benefits (additional property value, federal solar tax credit and local solar incentives).

Tax exemptions

States and municipalities also offer sales and property tax exemptions for solar power. Sales tax exemptions reduce the upfront cost of going solar, and property tax exemptions prevent solar owners from paying more based on the value a solar installation adds to a property.

Tax exemptions differ from tax credits in that your eligibility is pretty much automatic if your state offers these incentives.

Your installer will take care of any necessary paperwork for sales tax exemptions, and property tax exemptions just mean the county assessor won’t be knocking on your door after you get solar installed.

Solar rebates

Rebates are a great way to save money on solar panels. Solar rebates are often tied to a specific utility and paid directly to the solar installer to reduce the customer’s up-front cost of going solar.

This reduction in cost affects the amount of solar tax credits you can receive. For example, if you get a 450,000 rebate off the cost of a 20,000 solar installation, your tax credit is based on the reduced 19,000 amount. At 30%, the tax credit would be 5,700.

Solar panel rebate amounts are usually quite small these days—often under 500 or 450,000. There are exceptions, however, including Illinois, Oregon, Mississippi, and New York, which still offer many utility customers rebates worth several thousand dollars.

Current rebate programs

Here are the states with current solar rebate programs:

Performance-based incentives

The final way states and utilities have chosen to incentivize solar adoption is performance-based incentives, also known as “performance payments.” As the name suggests, these incentives are paid to solar system owners based on how much energy their systems generate.

Some performance-based incentives are paid directly to system owners as a separate line item on their monthly bills. Others rely on a concept called Solar Renewable Energy Credits (SRECs), which represent 1,000 kilowatt-hours of electric generation, and are awarded to solar system owners at specific intervals (usually quarterly or annually).

SRECs

SRECs have value because they are proof that energy was generated from renewable sources. Utility companies can buy SRECs to comply with state RPS laws. If the utility fails to show compliance, they must pay a fine, so SRECs generally have a value that is less than what the non-compliance fine would be.

In most states with SRECs, individual customers first sell their SRECs for a market price to an aggregator, which then bundles them and sells them to utilities. In other places, the customer’s state or utility company pays them directly.

In the Illinois Shines program, the payment for SRECs is made ahead of time based on the expected performance of the system over 10 years. It’s more like a rebate, which is why we listed Illinois in the rebates section above.

How to claim SRECs

As you can probably tell, SRECs can get very complicated. In a state with an SREC market, you (or your installer) will have to register your system with a certain authority in order to have your energy production tracked and your SRECs issued.

Rest assured, if there is money to be made from selling SRECs in your state, your solar installer will explain how it works and get you set up to profit.

Solar Panel Subsidy Cost Estimation

Benchmark cost of grid connected solar system by MNRE, in 2022:

If you have planned to install solar system with latest technology product so average cost is Rs. 60,000 per kw across India but price differs little bit state to state also. This is average price without subsidy which includes product cost, installation cost, service cost for 5 years with net metering facility.

State Subsidy is Subject to UP Government.

Both central and state offer subsidy schemes to people for installing solar rooftop systems. The central government pays a 30% subsidy for these systems to states in general categories. For special states like states such as Uttarakhand, Sikkim, Himachal Pradesh, Jammu Kashmir and Lakshadweep, subsidy of up to 70% is given by the central government.

To avail subsidy, the average cost of installation of rooftop PV system without subsidy should be around Rs 60,000. 70,000. In order to avail generation-based incentive, the customer should generate 1100 kWh. 1500 kWh per year.

A person who is interested in getting a subsidy needs to follow some protocols. He will have to contact their electricity provider (or may even apply online with necessary documentation) who will visit the installation site for a review and give approval. Then the electricity provider visits for inspection. Customers can then avail the subsidy amount.

How to Verify Authorized Vendors/Channel Partners by DISCOMS?

I am sharing few guides to verify authorized vendors/channel partners that you can contact them. You have to visit on your DISCOM websites and search authorized channel partners list in your area and then contact them.

Government has revised solar system price every year. We are sharing with you for your reference. Most probably, you will get similar solar system price through solar subsidy.

Solar Panel Subsidy Scheme in India 2023

#1. Solar Panel Subsidy in Uttar Pradesh

Uttar Pradesh is one of the largest and most backward states in India but with high solar radiation. The state is looking to set up solar parks in different parts of the state on government land. UP has the seventh-largest installed rooftop solar power generation capacity in India.

#2. Solar Panel Subsidy in Kerala

For group housing society projects and residential welfare associations, with a capacity up to 500 kW, the center will provide a subsidy of 20%. If a customer wishes to install the plant investing the whole amount, they can choose to avail up to 40% of plant cost as subsidy.

#3. Solar Panel Subsidy in Maharashtra

The solar project subsidy in Maharashtra is managed by MEDA. Maharashtra’s installed solar energy capacity now accounts for more than 1800 MW and rooftop solar is near 230 MW. It has the fourth-highest installed rooftop solar power generation capacity across the country. The state is strengthening its policy of providing financial assistance for using solar energy in cottage and micro industries.

#4. Solar Panel Subsidy in West Bengal

West Bengal is a pioneer in solar technology in India. Government-owned WEBEL was one of the first manufacturers of solar energy panels in the country. It is mandatory for all large housing societies in West Bengal, (having a total contract demand of more than 500 kW) to install solar rooftop systems to meet a minimum of 1.5% of their total electrical load by solar energy. The subsidies are applicable as per SECI guidelines.

#5. Solar Panel Subsidy in Bihar

Solar Industry की बढ़ती ग्रोथ को देख कर इंडिया क हर स्टेट में सोलर पर सब्सिडी की सुविधा उपलब्ध है | हर राज्य में एक Government Website है, जहाँ पर सोलर सब्सिडी की Information दिए हुआ रहता है | 99% लोगो को यह पता नहीं होता है कि सब्सिडी मिलेगा कैसे और कितना मिलेगा ?

#6. Solar Panel Subsidy in Haryana

To save and resources for the future generation, of Haryana (Department of Renewal Energy) has started an electricity saving project called as Solar Rooftop Power Plant. Under this scheme, provides Solar System Plant to every Residential, Institutional, Social Sector, Private, and Commercial Industrial Sector across state.

#7. Solar Panel Subsidy in Madhya Pradesh

मध्य प्रदेश सरकार ने नवीन एवं नवकरणीय ऊर्जा मंत्रालय. भारत सरकार के मार्गदर्शन में राज्य में आवासीय क्षेत्रों में सौर ऊर्जा के प्रसार के लिए व्यापक स्तर पर योजनाएं तैयार कर लोगों को स्वच्छ एवं हरित ऊर्जा की तरफ लेकर जाने का प्रयास किया है। सरकार का प्रयास है कि जितना अधिक लोग सौर ऊर्जा की तरफ जाएंगे उतना ही राज्य शासन के संसाधनों का बेहतर उपयोग होगा और घरेलू खपतकर्ताओं को आर्थिक लाभ भी होगा।

#8. How to apply for solar subsidy in Madhya Pradesh?

The government announced a 40% subsidy for up to 3 kW system but it was difficult to get due to the unavailability of funds during the pandemic. It’s available for residential homeowners who install on-grid solar systems. It is provided by the state DISCOM company after submitting the complete installation documents on their portal.