The tax treatment of the federal solar discount depends on who you are and how the STCs are handled. The short version for an ordinary household: the discount is not something you report as income.
The household case
When you assign your STCs to the installer and pay a lower price, you have not received money. You have received a reduced price. The Australian Taxation Office has generally taken the view that this is not assessable income for a household. If you are not running a business from the property, you normally do nothing.
Where it gets different
- Selling the STCs yourself. If you keep the certificates and sell them to a trader, you receive money. Whether that is income depends on your circumstances, and you should check the ATO guidance on small-scale technology certificates.
- Businesses and investment properties. Solar is a business asset. The system cost, any depreciation and the STC discount are treated through your business or rental income, and GST may apply if you are registered.
- Registered agents and traders. They deal with GST and invoicing between themselves, often through recipient created tax invoices.
What to keep
- The quote showing the STC discount.
- Your signed assignment form.
- The tax invoice for the system.
- Any correspondence about the rebate.
A note on landlords and home offices
Rental property owners and people who run a business from home are the groups most likely to be caught out. If the system is installed on a rental, the cost and the discount form part of the property’s income and deduction records. If you claim a home office, you may be asked how much of the system is for business use. These are accounting questions, not certificate questions, and a short conversation with a tax adviser before you buy is much cheaper than fixing a return later.
What this means for you
If you are a household buying solar for your own roof and you take the upfront discount, you are unlikely to have a tax event from the STCs. If your situation is anything other than that, speak to an accountant. The resources hub has the basics, and the rate and pricing page shows how STC values are set. For installers handling GST, see RCTI, GST and ABN for STC payments. This is general information, not tax advice.