The federal government’s solar rebate, known as the Small-scale Renewable Energy Scheme (SRES), is designed to gradually phase out. On 1 January 2026, the value of this rebate will decrease again, directly impacting the upfront cost of installing solar panels in Sydney. This change means homeowners who delay their installation until 2026 will face higher net costs for the exact same system compared to those who install in 2025. While the reduction is part of a planned, decade-long phase-out, it represents a significant change for household budgets.

How will the STC rebate phase-out affect solar panel cost in Sydney 2026

The STC (Small-scale Technology Certificate) rebate works by assigning a number of certificates to a new solar installation. The quantity is based on the system’s size, its location (postcode zone), and a “deeming period,” which is the number of years remaining until the scheme ends in 2030.

In 2025, the deeming period is 6 years. On 1 January 2026, this period will drop to 5 years. This directly reduces the number of STCs a system is eligible for, shrinking the point-of-sale discount your installer can offer.

For a typical 6.6kW solar system in Sydney (located in STC Zone 3), the calculation illustrates the financial impact:

• 2025 Installation: A 6.6kW system generates approximately 54 STCs (6.6kW x 1.382 zone rating x 6 years).

• 2026 Installation: The same 6.6kW system will only generate about 45 STCs (6.6kW x 1.382 zone rating x 5 years).

Assuming a stable STC market price of around $38 per certificate, this nine-certificate difference means the upfront discount will be roughly $342 lower in 2026. Some estimates project the total cost increase for a 6.6kW system to be between $500 and $800, as installers may also adjust pricing based on demand and other market factors.

Current cost of solar panels in Sydney 2025

As of late 2025, the cost of a fully installed 6.6kW solar system in Sydney, after the STC rebate is applied, typically ranges from $5,000 to $7,500. For larger 10kW systems, homeowners can expect to pay between $8,000 and $13,000.

These prices can be influenced by several factors:

• Quality of Components: Premium panels (like those from REC or Trina) and high-end inverters will be at the upper end of the price range.

• Installer Expertise: Reputable installers accredited by Solar Accreditation Australia (SAA) may have higher labour costs but provide greater assurance of quality and safety.

• Installation Complexity: Factors like multi-storey homes, steep roof pitches, or the need for switchboard upgrades can add to the final cost.

The table below provides a general guide to solar panel prices in Sydney for 2025, post-rebate.

AU Solar Panels’s Pro Tip: When getting quotes, always ask your installer for the STC price they have used in their calculation. While the official Clearing House price is $40 (ex-GST), market prices fluctuate. This ensures you can compare offers accurately.

Small-scale Technology Certificate value projection 2026 Australia

The value of an individual STC is not set by the government but is determined by supply and demand on an open market. Electricity retailers are legally required to buy and surrender a certain number of STCs each year, which creates consistent demand.

For the past several years, the STC price has remained relatively stable, trading in a band between $35 and $40. Projections from the Clean Energy Regulator focus on the number of STCs that will be created, not the price. However, the fundamental market structure remains the same for 2026. Therefore, the industry widely expects the price per certificate to remain within its historical range. The primary change affecting solar prices is not a predicted crash in the STC value, but the reduction in the quantity of certificates issued per installation.

Impact of reduced STC rebate on 6.6kW solar system price Sydney 2026

The direct financial impact of the 2026 STC rebate reduction on a 6.6kW solar system in Sydney will be an increase in the net cost to the homeowner. As calculated above, the reduction from a 6-year to a 5-year deeming period will result in approximately 9 fewer STCs.

This translates to a reduced upfront discount of between $320 and $360, depending on the market price of STCs at the time of installation. While this may seem minor on a multi-thousand-dollar investment, it directly lengthens the system’s payback period. With electricity prices continuing to rise, installing sooner in 2025 locks in a larger discount and starts your savings journey earlier.

Case Study: A Family in Penrith The Chen family was facing quarterly electricity bills of over $550. They installed a 6.6kW system with Jinko panels and a 5kW Sungrow inverter for a total cost of $6,200 in 2025. The STC rebate provided an upfront discount of over $2,000. Their annual savings on electricity bills are now projected to be over $1,800, putting them on track for a payback period of under 4 years. Had they waited until 2026, their upfront cost would have been higher, extending this payback period.

Sydney solar installation cost trends 2025-2026

The trend for solar installation costs in Sydney moving from 2025 to 2026 is one of slight increases, primarily driven by the scheduled reduction in the STC rebate. While the cost of solar technology itself has fallen dramatically over the last decade, prices have stabilised recently due to supply chain fluctuations and high global demand.

Reports suggest that some Chinese solar panel manufacturers may increase prices in 2026, which could add further upward pressure on the final cost for Australian consumers. Therefore, the 2025-2026 trend is a clear incentive to act sooner rather than later to avoid paying more for the same asset.

Australian solar industry predictions 2026

Despite the gradual phase-out of the SRES rebate, the Australian solar industry is predicted to remain strong in 2026. The key driver is shifting from government incentives to pure economic sense. Soaring electricity prices make self-generation of power an increasingly attractive way for households to control their expenses.

We expect to see several key trends continue:

• Increased Battery Adoption: As feed-in tariffs (the amount you get paid for exporting excess solar) remain low, more households will opt to install a solar battery like a Sungrow SBR or Tesla Powerwall to store their own energy for use at night.

• Focus on System Quality: Homeowners are becoming more educated about solar technology. There is a growing understanding that investing in higher quality, more efficient panels and inverters from brands like REC and Canadian Solar leads to better long-term performance and reliability.

• Electrification of Homes: With the rise of electric vehicles (EVs) and a move away from gas appliances, household electricity demand is increasing. This makes larger solar systems (10kW and above) more common and economically viable.

Factors influencing solar panel prices in Australia beyond rebates

While the STC rebate is a major factor, it is not the only variable influencing solar panel prices. Other critical elements include:

• Global Supply and Demand: The vast majority of solar panels are manufactured overseas. Global demand, raw material costs (like polysilicon), and international shipping costs all play a role in the price here in Australia.

• Australian Dollar (AUD): As components are purchased in US dollars, a weaker AUD can lead to higher prices for installers, which is then passed on to consumers.

• Technological Advancements: Ongoing innovation continues to improve panel efficiency. Newer, more powerful panels can sometimes have a higher initial cost but deliver better long-term value by generating more power from the same roof space.

• Installer and Labour Costs: The availability of skilled, SAA-accredited installers and electricians can influence labour costs, particularly during periods of high demand.

Ultimately, the scheduled 2026 reduction in the STC rebate is a certainty. For Sydney homeowners considering making the switch to solar, the data clearly shows that acting in 2025 will secure a larger discount and a faster return on investment.

If you’re ready to explore your options and get a clear picture of how much you could save, we can help. I can connect you with a trusted local expert who can provide a tailored quote for your home.