The federal solar rebate is the most misunderstood part of buying solar. Most people picture a cheque or a government payment. It is neither. The rebate is a pile of tradeable certificates, called STCs, that your installer turns into a discount on the day you sign. You never see the money move. You just see a lower number on the quote.
Understanding that one sentence helps with almost everything else: why the discount differs between quotes, why it falls each January, why the installer asks you to sign a form and how to tell a genuine offer from a dodgy one. This guide traces the path of the rebate from the day the panels go on the roof to the day an electricity retailer buys the certificate.
Step 1: Your system earns certificates
Under the Small-scale Renewable Energy Scheme, a rooftop solar system is credited for the renewable electricity it is expected to produce up to the end of 2030. That credit is paid up front as a number of STCs, each representing one megawatt hour. The formula is system size in kW x a zone rating for your postcode x the number of deeming years left, rounded down.
For a 6.6 kW system in zone 3 (rating 1.382) installed in 2026, with five deeming years, that is 6.6 x 1.382 x 5 = 45.6, or 45 STCs. The STC calculator by postcode lets you run your own.
Step 2: The certificates become a discount
The right to create those 45 certificates belongs to the system owner, which is you. Most owners sign a form assigning that right to the installer or their agent, and the installer lowers the price by the estimated value of the certificates. At the time of writing, STC spot has been roughly $38 to $40 and the clearing house ceiling is $40. So 45 STCs is worth about $1,700 to $1,800.
A quote might look like this:
| Line | Amount |
|---|---|
| 6.6 kW system, panels, inverter, installation | $8,900 |
| Less STC discount (45 STCs at about $39) | -$1,755 |
| Price you pay | $7,145 |
The numbers are an illustration, not a price guide. What you should see on every quote is the STC count and the dollar value applied. If the quote only shows a final price, ask for the breakdown. The STC discount explained answer shows how installers present it.
Step 3: The installer lodges the claim
After installation, the installer or their agent must create the certificates in the Clean Energy Regulator’s REC Registry. The claim needs evidence: photos of the panels, inverter, serial numbers and installation, the assignment form you signed, the accredited installer’s details and the electrical certificate of compliance. The regulator checks claims and can audit them later. The photo requirements guide lists what a claim needs.
STCs must be created within 12 months of installation, but a competent installer lodges within days.
Step 4: A trader buys the certificates
Once the STCs are in the registry, they are sold. The installer, or the agent they work with, typically sells them to a certificate trader. A trader pays a quoted rate per STC, usually somewhere between $38 and $40 right now. That money pays the installer back for the discount they gave you. The who buys STCs answer explains how it flows.
Step 5: Electricity retailers surrender them
The traders sell on to electricity retailers and other liable entities, who are legally required to surrender a quota of STCs each year. They pass the cost into the electricity market. That is where the money for the rebate really comes from. It is not a government grant out of general revenue. It is a levy built into how Australia’s Renewable Energy Target works. The clearing house is a backstop that lets certificate holders sell at a fixed $40 ceiling price, which is why the market has not gone above that.
Why quotes differ
Two installers can quote the same system with different discounts. Common reasons:
- Different STC price assumed. One uses $38, another $35 to protect their margin.
- They keep a share. Some installers pass on only part of the value. That is their right, but you should know.
- Different STC count. An error in the zone or the system size.
- Different system. A larger inverter or more panels changes the count.
Ask each installer how many STCs they are using and at what price per STC. You will usually learn more from that one question than from the headline number.
From the desk: the form you sign is the hinge of the whole arrangement. It says you own the system and are assigning your right to create certificates. If an installer wants your signature on a blank or part-filled assignment form, say no. Every field, including the system size and address, should be completed before you sign.
What happens if something goes wrong
If the claim is rejected or audited later, the usual consequence falls on whoever created the certificates, which is normally the installer or agent. But it is not a risk-free position for you. A badly installed system, or one that does not match the paperwork, can lead to problems with your warranty or with the discount you were given. See who is responsible for a failed STC audit. Choose an accredited installer and keep your copies of the paperwork.
Is the rebate going away?
It is stepping down, not switching off. The deeming period drops by a year every 1 January: 5 years for 2026 installs, 4 for 2027, down to 1 in 2030, and the scheme ends on 31 December 2030. A 6.6 kW system in zone 3 falls from 45 STCs in 2026 to 36 in 2027. The should I buy solar before 2027 guide works through what that means for your decision.
What the rebate is not
It is not a government cheque, it is not income tax relief and it is not something you apply for through a government portal. It is also not a loan or a grant that has to be repaid. People confuse it with state programs, some of which do involve an application and an income test, such as rebates for hot water or batteries in particular states. The federal solar discount works differently, since it is made of certificates that have a market value, and that value goes up and down a little with the market. That is why two quotes a few weeks apart can show slightly different dollar amounts for the same number of STCs, and why the clearing house ceiling of $40 matters as a reference point.
What to do next
- Ask every installer for the STC count, the price per STC and the dollar discount in writing.
- Check the installer’s accreditation number before you sign anything.
- Read the assignment form line by line and keep a copy. Who gets the STCs explains your rights as owner.
- If you are curious about keeping the certificates yourself, see should I keep my STCs or assign them.
- Installers wanting to see how the claim side works can read the STC trading page and how it works.