The 2026 STC solar rebate reduction explained

The federal government’s incentive for installing small-scale solar systems, often called the STC solar rebate, is designed to gradually phase out. This isn’t a sudden stop, but an annual reduction that occurs on the first of January each year. The scheme is scheduled to end completely in 2030.

This annual reduction happens because the rebate’s value is calculated based on a “deeming period,” which is the number of years remaining until the scheme concludes. In 2025, the deeming period is six years. On 1 January 2026, this will drop to five years, reducing the number of Small-scale Technology Certificates (STCs) a new solar system is eligible for. This directly lowers the upfront discount you receive, effectively increasing the solar price by approximately 4-5% for the same system.

What is the Small-scale Technology Certificate (STC) rebate?

The STC rebate is a financial incentive provided under the Australian Government’s Small-scale Renewable Energy Scheme (SRES) to encourage homeowners and small businesses to install renewable energy systems. While it’s widely known as a rebate, it technically functions as an upfront discount on the cost of your solar system.

Here’s how it works:

• Certificates are created: When you install an eligible solar system (under 100kW), it generates a number of STCs. One STC represents one megawatt-hour (MWh) of renewable electricity the system is expected to produce over its lifetime (the deeming period).

• Certificates have value: These certificates are traded on an open market and have a monetary value, typically between $35 and $40 each.

• Installers handle the process: In almost all cases, you assign the right to claim your STCs to your solar installer. They then apply the total value of the certificates as a direct discount on your quote, so you only pay the final, lower price. This saves you the complex task of trading the certificates yourself.

To be eligible, the system must be installed by a Solar Accreditation Australia (SAA) accredited installer and use panels and inverters approved by the Clean Energy Council.

How is the stc rebate calculated for solar panels in Australia?

The number of STCs your system generates, and therefore the size of your STC rebate, is determined by a clear formula.

The key factors in the calculation are:

• System Size (kW): A larger system will generate more electricity and therefore be eligible for more certificates.

• Geographic Location (Zone): Australia is divided into four zones based on how much solar radiation an area receives. Sydney is in Zone 3. Areas with more sunshine (like Zone 1 or 2) generate more STCs for the same size system compared to areas with less (like Zone 4).

• Deeming Period: This is the number of years left until the SRES scheme ends in 2030. This period reduces by one year every January, which is why the rebate value drops annually.

The basic formula is: System Size (kW) x Zone Rating x Deeming Period = Number of STCs.

STC rebate value 2025 vs 2026

The core difference in the STC rebate value between 2025 and 2026 comes down to the change in the deeming period.

Let’s look at an example for a common 6.6kW system in Sydney (Zone 3):

• In 2025: A 6.6kW system would generate approximately 55 STCs. At a market value of $38 per STC, this equals a rebate of around $2,090.

• In 2026: The same 6.6kW system will generate fewer STCs due to the shorter deeming period. This would result in a rebate of approximately $1,748, a difference of over $340.

AU Solar Panels’s Pro Tip: While a reduction of a few hundred dollars might seem small on a large purchase, it represents a guaranteed saving. Acting before the January deadline ensures you get the maximum possible government contribution towards your system, improving your return on investment from day one.

Average cost of solar panel installation Sydney 2025

In 2025, the price of solar panels in Sydney remains highly competitive, making it an excellent time to invest. The final solar price depends on the quality of components (panels and inverter) and the complexity of the installation.

Here’s a breakdown of typical costs for a solar without battery price, after the STC rebate has been applied:

The price of solar batteries is an additional cost. A quality 10kWh solar battery price is typically between $10,000 and $12,000 fully installed. Popular models include the Sungrow SBR and Tesla Powerwall 3. The total solar and battery price for a 6.6kW system with a 10kWh battery would therefore range from approximately $15,000 to $21,000.

Case Study: A Family in Penrith The Sharma family was struggling with quarterly electricity bills of over $650. They installed a 6.6kW system using Trina panels and a 10kWh Sungrow SBR battery for a total cost of $16,000. Their annual savings are now estimated at over $2,300, putting them on track for a payback period of just under 7 years. Their last power bill was primarily the daily grid supply charge, a massive reduction from their previous costs.

How to lock in the STC rebate before the 2026 drop

To secure the higher 2025 STC rebate value, your solar system must be fully installed and commissioned before the deadline.

The critical date is 31 December 2025.

Your system must be operational by this date to be eligible for the 2025 deeming period. Any system installed on or after 1 January 2026 will automatically be calculated using the lower 2026 deeming period.

This means you need to account for potential delays in the process, such as:

• Grid connection approvals.

• Installer availability, which gets busier towards the end of the year.

• Equipment stock and shipping times.

AU Solar Panels’s Pro Tip: We recommend finalising your installation contract by late October or early November at the latest. This provides a safe buffer to ensure all paperwork, approvals, and the physical installation are completed well before the Christmas shutdown period and the hard deadline of December 31st.

Solar installation deadlines for 2025 STC rebate Sydney

To ensure you don’t miss out on the maximum STC rebate, it’s crucial to act promptly. The end of the year is the busiest period for solar installers, and waiting too long can push your installation into the new year, costing you money.

Here is a suggested timeline to lock in the 2025 rate:

• September – October 2025: Research systems, compare quotes from SAA-accredited installers, and sign your contract.

• November 2025: Your installer should submit the necessary grid connection applications and schedule your installation date.

• December 2025: Your system should be fully installed and commissioned by your installer no later than the third week of December to avoid any last-minute issues.

Projected solar panel prices Sydney 2026

While predicting exact prices is difficult, industry trends suggest that the underlying hardware cost of solar panels and inverters is likely to remain relatively stable or continue its slow decline into 2026. Experts predict a potential 5-10% annual drop in solar battery costs.

However, the key factor for your upfront cost in early 2026 is the reduction in the STC rebate. Even if hardware costs drop slightly, the smaller rebate will likely offset those savings. This means the final price you pay for a system installed in January or February 2026 could be higher than what you would pay in late 2025.

The message is clear: the most significant and guaranteed saving you can make is by locking in the higher 2025 STC rebate.

If you’re ready to take advantage of the current solar incentives before they drop, we can help. I can connect you with a trusted local expert to get a clear, data-driven quote for your home.