The question comes up at the kitchen table every January: the rebate is shrinking, so is it still worth it? The honest answer is that the rebate was never the main reason to put panels on a roof. It is a discount on the price. The payback comes from not buying electricity. This article puts numbers on both, with the assumptions on the table so you can change them for your own market.
What the STC discount actually is
Small-scale solar earns Small-scale Technology Certificates up front, calculated as kW x zone rating x deeming years, rounded down. For 2026 the deeming period is 5 years, falling to 4 for 2027 and to 1 in 2030, when the scheme ends on 31 December 2030. For a 6.6 kW system in zone 3 (Sydney, Brisbane, Perth, Adelaide, Canberra):
- 2026: 6.6 x 1.382 x 5 = 45 STCs, about $1,730 at $38.50
- 2027: 6.6 x 1.382 x 4 = 36 STCs, about $1,390
- 2030: 6.6 x 1.382 x 1 = 9 STCs, about $350
In zone 4 (Melbourne, Hobart) the 2026 figure is 39 STCs, about $1,500. The STC market has been roughly $38 to $40 at the time of writing, with a $40 clearing house ceiling. Check today’s value in the STC calculator.
A payback model, with assumptions
These numbers are illustrative assumptions for a typical suburban house, not quotes. Change them to suit your market.
| Assumption | Value |
|---|---|
| System | 6.6 kW |
| Gross installed price | $7,500 |
| Annual generation | 9,000 kWh |
| Share used on site | 55% |
| Retail import price avoided | 30 c/kWh |
| Feed-in tariff | 5 c/kWh |
Annual benefit: 4,950 kWh used on site x $0.30 = $1,485, plus 4,050 kWh exported x $0.05 = $203. Total about $1,690 a year.
| Case | Net price | Simple payback |
|---|---|---|
| 2026 with 45 STCs ($1,730) | $5,770 | about 3.4 years |
| 2027 with 36 STCs ($1,390) | $6,110 | about 3.6 years |
| 2030 with 9 STCs ($350) | $7,150 | about 4.2 years |
| No STCs at all | $7,500 | about 4.4 years |
The gap between the 2026 case and no STCs at all is about a year. The shrinking rebate extends payback by months, not decades, because the price of the system, not the rebate, is the major number. If installed prices continue to fall, as they have, the difference narrows further. For current market prices see solar panel prices in Australia in 2026.
What shifts the answer
Four things move payback more than the rebate does:
- When the household uses power. A home that is empty at midday exports more at 5 cents, which stretches payback. A home with a home office, a pool pump or a heat pump hot water system on a timer uses more on site.
- Retail tariff. A higher import price makes each self-consumed kWh worth more. A time-of-use tariff changes the sums.
- Battery or not. A battery stores midday energy for the evening, trading a 5 cent export for a 30 cent avoided import, but costs more up front. The federal program discounts it through STCs: 95 STCs, about $3,660, for a 14 kWh battery at the current factor of 6.8, dropping to 79 from 1 January 2027.
- System size and orientation. Oversizing relative to use pushes exports up and the marginal kW is worth less.
The honest sales answer
Customers who ask “is it worth it without the rebate” are usually asking one of two things. Either they think they have missed the boat, or they are testing whether the installer is pressuring them. Neither needs a hard sell. Show the payback table, show the 2026 and 2027 STC values side by side, and say what you assume about use. If their usage means the payback is long, say so. A system that does not suit a household is a bad sale even when the rebate is high.
From the desk: Put the assumptions on the quote, not just the answer. Customers trust a payback figure with its working shown, and when the retail tariff changes they can re-run it themselves. It also protects you when someone remembers a number from two years ago.
The commercial version
For a business the same logic holds, with larger numbers. Systems above 100 kW and up to 1 MW installed from 1 October 2026 now create STCs with a fixed five-year deeming period, so the incentive does not step down in January the way a small-scale system does. A 200 kW system in zone 3 creates 1,382 STCs, about $53,200 at $38.50. Large commercial users with high daytime load often see better payback than households. See mid-scale solar and STCs and the answer on LGC vs STC.
Should the customer wait?
Waiting for a better deal on a falling rebate is a bad trade when the rebate falls on a published schedule. A customer who waits a year saves money on a falling system price, perhaps, but loses a year of bill savings, which in the model above is about $1,690, more than the $340 drop in STCs. Our should you buy solar before 2027 piece works through the timing, and the answer on installing now or waiting is a short version.
When solar is not worth it
Be willing to say so. Households with very low daytime use, shaded roofs, a short time in the property, or an unusually cheap electricity tariff may see a long payback even before STCs are removed. In those cases a smaller system, a battery-ready design or a hot water diverter may do better, or the right advice may be to wait. Customers remember the installer who talked them out of a poor fit, and they send friends.
How to run the numbers for a specific home
Collect twelve months of bills, the daily usage profile if the meter provides one, the roof area and orientation, and the retail tariff. Then run the system size that matches daytime use, not the largest that fits. Use the STC calculator to set the discount, estimate generation from your own installed data, and show the customer a range for payback, not a single figure. A range of 3.4 to 4.4 years is honest. A single number promises precision you do not have.
What to do next
- Build a payback table like the one above into your quote template
- Show the 2026 and 2027 STC values side by side
- Check the current rate on pricing and learn how STC trading works
- Keep the scheme changes hub bookmarked