This page is general information, not tax advice. Rules change, so confirm anything here with your accountant or the Australian Taxation Office.
Sole trader or company
A sole trader is quick and cheap to set up, and the business income is your income. The trade-off is personal liability: if something goes wrong on a job, your personal assets are exposed. A company is a separate legal entity, which can limit that exposure, suits employing a crew and makes it easier to bring in a partner or sell the business later. It costs more to set up and run (ASIC fees, separate tax return, director obligations). Many installers start as sole traders and move to a company when staff, turnover or risk grows. Insurance and licensing follow the entity, so update both if you change.
GST registration and turnover
A business must register for GST once its GST turnover reaches $75,000 a year (or is projected to). STC sales form part of that turnover because the certificates are a taxable supply. Registering means you charge GST on supplies and claim credits on purchases. Because installers buy panels, inverters and batteries, voluntary registration is common even under the threshold.
For how GST applies to STC sales and the customer discount, see GST on STC sales, do installers pay GST on STCs and should you charge GST on STCs.
How it plays out in a payment
When you sell STCs to a trader, the trader typically issues a recipient-created tax invoice (RCTI) on your behalf, using your ABN and GST status. That is why your registration must be accurate and current. Details are in RCTI, GST and ABN for STC payments and what an RCTI is.
Turnover and cash flow
STC income can be a large share of a small installer’s receipts. A busy month of battery jobs can push you toward the threshold quickly, so track rolling 12-month turnover, not just the financial year. See installer cash flow and STCs.
Records that make life easier
Keep a separate business bank account, a simple job ledger and every RCTI from your trader. When structure or GST status changes, tell your trader, distributors and insurer at the same time. At tax time your accountant will want the STC income matched to jobs, so a job number on every payment line saves hours. Revisit structure when you hire your first employee or when annual turnover roughly doubles.
What this means for installers
Set up the structure that suits your risk, register for GST on time and give your trader accurate ABN details. Energy Merchants issues the RCTI as part of settlement and charges no fees; see start trading and pricing, and the installer business hub for related questions.