2026 Solar Rebates Explained

Solar rebates have transformed rooftop solar from a costly gamble into a common sight on homes across Australia. By cutting installation costs, they sparked (see what we did there?) a thriving renewable-energy industry and changed how the nation generates power.

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But the term“solar rebate” is confusing. Is it free money? Is it a government handout? Is it included in your quote? Who pays for it? Why does the value drop each year? And if solar panels are common, why do these incentives remain? So many questions!

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To understand how solar incentives work here, it helps to look back at why rebates were introduced and how they have changed over the last 25 years. A solar rebate is a government-created financial incentive designed to reduce the upfront cost of installing solar.

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The word “rebate” is commonly used, but today’s federal solar incentive is usually not a cash payment after installation. It works through tradable certificates generally converted into an immediate discount on your quote. Eligible rooftop solar systems receive support through the Small-scale Renewable Energy Scheme, or SRES. Under this scheme, an eligible system creates Small-scale Technology Certificates, called STCs.

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This is probably still confusing, but stay with us. The certificates have financial value, and most customers transfer the right to create them to their solar retailer or authorised agent. Their estimated value is deducted from the system’s upfront cost, so the incentive is usually included in your quoted price. You won’t need to submit a separate rebate application or wait for money to arrive in your bank account.

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A solar rebate is an upfront discount from a government-regulated certificate market. You benefit from a lower system price while your solar retailer or authorised agent handles the certificates behind the scenes.

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Why Were Solar Rebates Introduced?

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When solar panels first arrived, their sky-high prices kept them out of reach for most households. Few saw the point in spending tens of thousands on a basic system, no matter how promising solar power seemed. In the 1990s and early 2000s, solar panels were less efficient, equipment costs soared, and Australia’s solar industry was just finding its feet. Even the greenest households balked at the upfront expense.

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Governments introduced incentives to:

• Make emerging solar technology affordable for ordinary households.
• Reduce Australia’s reliance on coal- and gas-generated electricity.
• Cut greenhouse gas emissions from the electricity sector.
• Create enough demand to establish a viable Australian solar industry.
• Encourage manufacturers to increase production and reduce equipment costs.
• Attract investment and competition to the renewable-energy market.
• Develop a skilled solar installation workforce.
• Help Australia meet national renewable-energy targets.
• Support decentralised electricity generation, with power produced on homes rather than entirely by large power stations.

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The idea was straightforward: solar power benefited not just households but communities. Subsidies bridged the affordability gap while the technology was still expensive. Solar rebates addressed a stubborn market puzzle. With too few buyers, manufacturers, suppliers, and installers saw little reason to invest. Without that investment, prices stayed high, and solar remained out of reach for most families.

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Financial incentives broke the stalemate. Rebates opened the door for more households to embrace solar, sparking demand and drawing in new businesses. As manufacturing accelerated and competition intensified, prices fell further.

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The Early History of Australian Solar Rebates

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Australia’s solar incentives didn’t magically appear. Instead, they slowly unfolded, combining rebate programs, renewable-energy targets, and certificate schemes over more than two decades.

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1999–2000: The Photovoltaic Rebate Program

The Australian Government announced the Photovoltaic Rebate Program in 1999, starting 1 January 2000. It offered cash rebates to households installing grid-connected or stand-alone solar photovoltaic systems.

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In those days, spotting a solar panel on a suburban rooftop felt like finding hidden treasure. Systems were small and equipment expensive. The vision of a thriving Australian rooftop-solar industry seemed unlikely. Solar power belonged mostly to remote homesteads, environmental pioneers, and households brave enough to embrace new technology. And the rich, of course.

Skilled installers were few, competition was thin, and the range of equipment was a shadow of what we see today.

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The Photovoltaic Rebate Program encouraged households to adopt renewable energy and gave the emerging solar industry a market to grow. It created demand for panels, equipment, installation services, and technical expertise when the industry could not yet rely on the commercial market alone.

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2001: The Mandatory Renewable Energy Target

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In 2001, Australia launched the Mandatory Renewable Energy Target to generate 2% more of the nation’s electricity from renewable sources. The scheme introduced tradable renewable-energy certificates instead of relying on government grants. Electricity retailers and other obligated parties had to collect and surrender a set number of certificates, making renewable electricity a valuable commodity.

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This set a lasting precedent shaping today’s solar incentives. Renewable-energy systems are more than power generators. They help achieve national goals for emissions reduction and renewable energy. Their impact is captured in certificates with market value.

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The Solar Homes and Communities Plan

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The original rebate program later evolved into the Solar Homes and Communities Plan. At its height, the program offered eligible households rebates up to $8,000. This matched the public’s idea of a “government solar rebate” as a straightforward subsidy to help purchase a solar system. As the rebate grew, demand soared. Solar panels became a realistic option for many households.

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Rooftops across the suburbs gleamed with new installations. Yet this surge in demand brought challenges. Critics pointed to sudden policy shifts, tangled administration, and doubts about whether the subsidies always delivered emissions cuts effectively. Direct rebates forced the government to guess how many households would apply and estimate the program’s cost. When demand exceeded predictions, budgets and eligibility rules changed quickly, leaving customers and the solar industry uncertain.

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2009: Solar Credits Replaced the Direct Rebate

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In 2009, the Solar Homes and Communities Plan ended and was replaced by Solar Credits under the expanded Renewable Energy Target. Instead of paying households a fixed cash rebate, the government increased the number of renewable-energy certificates that eligible small solar systems could create. A multiplier initially gave qualifying systems five times the normal number of certificates for part of their capacity.

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The extra certificates greatly increased the incentive's value, making solar accessible to more Australians. This was more than a tweak. It was a leap from simple government payments to a market-driven certificate system. This new approach paved the way for the solar landscape Australians know today. Instead of waiting for a cheque after installing solar, households could exchange their certificates for an immediate discount on the system’s price.

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The Small-scale Renewable Energy Scheme

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In 2011, the Renewable Energy Target was divided into two parts.

The Large-scale Renewable Energy Target supported major renewable projects, including solar farms, wind farms and hydroelectric power stations.

The Small-scale Renewable Energy Scheme supported eligible small-scale technologies installed by households and businesses, including rooftop solar, solar water heaters, and heat-pump water heaters. Batteries were added later.

Australians often call this scheme the federal solar rebate, which has inspired many households to embrace solar energy.

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How Do STCs Reduce the Cost of Solar?

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When an eligible rooftop solar system is installed, it creates Small-scale Technology Certificates.

Each STC represents one megawatt-hour of renewable electricity the system is expected to generate, store, or displace under the scheme’s rules.

The number of certificates for a rooftop solar system depends on several factors, including:

• The system’s solar-panel capacity.
• The location in which it is installed.
• The amount of solar electricity it is expected to generate.
• The year in which it is installed.
• The number of years remaining before the scheme concludes.
• Whether the equipment and installation meet the applicable requirements.

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Australia is divided into solar zones because a rooftop system in Queensland can generate much more electricity than the same setup in cooler, cloudier Tasmania. Solar panels with abundant sunlight earn more certificates than the same system in a shadier region.

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Discount Appears on Your Quote

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Most homeowners never have to worry about creating or selling their own STCs. They assign the right to create the certificates to the solar retailer or a registered agent who provides an upfront discount based on the certificates’ estimated value. For example, if an eligible system costs $12,000 before the STC incentive and the certificates are worth about $3,000, the customer may be quoted around $9,000 after the discount.

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The exact discount varies by system, location, installation date, certificate entitlement, and current STC market value. A reliable solar quote will state whether the STC incentive is included in the price. Do not expect another rebate if it is already factored in.

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Is the Solar Rebate Free Government Money?

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Not quite. The federal STC incentive doesn't come as a cheque in your mailbox. Instead, electricity retailers and other obligated companies buy and hand over certificates to meet the Renewable Energy Target. This demand gives STCs market value.

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The cost of meeting these obligations is included in the overall expense of running the electricity market and can appear on your power bill. It's more accurate to call the STC system a government-designed market incentive rather than a simple cash handout. This system channels financial benefits to eligible renewable-energy installations, rewarding them for helping Australia reach its clean-energy goals.

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What Does the Solar Rebate Cover?

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The federal incentive applies to eligible systems and equipment—not just anything advertised as solar. To qualify, the system must comply with the relevant scheme requirements. These can include rules relating to:

• Approved solar panels and inverters.
• System size and generation limits.
• Installer and designer accreditation.
• Electrical and installation standards.
• When the system is installed and commissioned.
• The premises at which it operates.
• Documentation and certificate-creation requirements.

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The incentive does not always cover every expense tied to an installation. Costs like switchboard upgrades, meter changes, difficult roof access, or extra electrical work can still affect the final bill. That is why it pays to compare full quotes instead of trusting a tempting starting price.

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Does the Solar Incentive Reduce Each Year?

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The Small-scale Renewable Energy Scheme will end in 2030. As that date approaches, the number of STCs you can claim for rooftop solar decreases each year. Solar companies often call this the rebate reducing or stepping down annually.

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This gradual reduction is part of the scheme’s design. STCs depend partly on how much renewable electricity a system is expected to produce before the program ends. Each year, new systems have less time, so they earn fewer certificates. The solar market has changed dramatically.

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Government incentives were introduced when solar was an expensive emerging technology. Since then:

• Panel prices have fallen substantially.
• Manufacturing has increased.
• Equipment efficiency has improved.
• Competition between suppliers has grown.
• Installation methods have become more established.
• Solar has become a mainstream household investment.

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The industry no longer requires the same level of support it needed during its earliest years.

Phasing out the incentive step by step helps prevent the shock of stopping it overnight. This approach gives households, retailers and installers time to prepare for the scheme’s end.

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Did Solar Rebates Work?

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By the clearest measure—getting more solar panels on rooftops—the answer is yes. Rooftop solar has gone from a pricey niche to one of Australia’s most popular ways to power homes. According to the Clean Energy Regulator, Australia reached four million small-scale renewable-energy installations in 2024, with over 300,000 solar systems added each year since 2020.

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Falling equipment prices, rising electricity costs, improved products, and strong Australian sunshine all contributed. However, rebates and certificates helped create enough demand to build a competitive solar industry. That scale further reduced prices, encouraging more installations and industry growth.

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Solar incentives effectively helped start a cycle:

1. Financial assistance made solar more affordable.
2. More households purchased systems.
3. Greater demand attracted more suppliers and installers.
4. Increased competition and manufacturing lowered prices.
5. Lower prices made solar accessible to even more households.

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The subsidy helped solar become a practical household investment, not just an option for those motivated by the environment.

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What About Solar Battery Rebates?

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While solar panels quickly became affordable, home batteries took longer to drop in price. A solar system produces cheap electricity during the day, but without a battery, it sends unused power back to the grid. When the sun sets, households often buy electricity from the grid at a higher price than they earned for their exported solar.

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Batteries solve this problem by capturing extra solar energy for use after dark. The high upfront cost has kept many households from switching. From 1 July 2025, eligible batteries joined the Small-scale Renewable Energy Scheme through the Australian Government’s Cheaper Home Batteries Program. This program gives eligible households and small businesses an upfront battery discount based on the battery’s usable capacity. Only qualifying batteries installed with a new or existing solar system can receive the federal incentive.

Battery support was introduced to:

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• Make home storage more affordable.
• Increase the amount of rooftop solar used within the home.
• Reduce household reliance on grid electricity at night.
• Lower pressure on the grid during evening demand periods.
• Store excess renewable electricity that may otherwise be exported or curtailed.
• Encourage greater competition in the battery market.
• Help batteries follow the cost-reduction path previously seen with solar panels.

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Battery incentives are picking up where Australia’s first solar rebates left off, ushering in the next chapter of clean energy adoption.

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Are Feed-in Tariffs a Solar Rebate?

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No. A feed-in tariff and a solar rebate serve different purposes. A solar rebate or STC incentive reduces the upfront cost of buying and installing a system. A feed-in tariff is the amount an electricity retailer credits you for each kilowatt-hour of excess solar electricity sent to the grid.

You may benefit from both, but they apply at different stages. The STC incentive helps you buy the system. The feed-in tariff applies after the system starts generating electricity. Feed-in tariffs vary by electricity retailer and plan and are not fixed government rebates. A higher feed-in tariff may come with higher usage rates or supply charges.

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An Interest-Free Solar Loan a Rebate?

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An interest-free loan can make solar more affordable, but it is not a rebate. A rebate or subsidy reduces the amount you pay. A loan lets you borrow money and repay it over an agreed period. Some state and territory programs allow eligible households to combine an interest-free or low-interest loan with federal STC incentives. In that case, the STCs reduce the system price first and the loan funds the remaining amount. The distinction matters because a loan must be repaid even without interest.

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Can You Receive More Than One Solar Incentive?

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Sometimes. An eligible system may receive the federal STC discount while the customer also participates in a state, territory, or local government rebate or loan program. Whether incentives can be combined depends on program rules. Eligibility may depend on:

• Household income.
• Property ownership.
• Whether the property is owner-occupied or rented.
• The value or type of property.
• The system’s size.
• The selected equipment.
• Whether solar or a battery is already installed.
• The installation date.
• Available program funding.

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Never assume one form of assistance automatically disqualifies you from another. But aldo don't assume every advertised program can be combined. Check current conditions before signing a contract.

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What Should You Check on a Solar Quote?

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The word “rebate” can make a deal seem better than it is. Before accepting a quote, be sure you know exactly what is covered.

Check whether:

• The quoted price already includes the STC discount.
• The proposed equipment is eligible under the scheme.
• Installation and commissioning are included.
• The installer holds the required accreditation.
• Meter or switchboard work may cost extra.
• The system is appropriately sized for your electricity use.
• Product and installation warranties are clearly explained.
• Any battery incentive has been calculated using eligible usable capacity.
• Additional state assistance is a rebate.

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A rebate might reduce the price, but it can't turn poor equipment or shoddy installation into a wise investment. Quality products, smart design, skilled installers, and reliable support are essential.

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Solar Rebates Were Designed to Build a Market—Not Last Forever

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Australia’s solar incentives were created because an emerging technology offered significant public benefits but remained too expensive for widespread adoption. Over time, the form of support changed. Direct cash rebates gave way to multiplied renewable energy certificates, which eventually developed into today’s Small-scale Renewable Energy Scheme.

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Just look at rooftops across the country. Solar panels are everywhere. No longer rare or experimental, solar has become a practical choice for Australians wanting to cut their dependence on grid electricity. The next hurdle is making sure households can use more of their renewable power when they need it most. That is why incentives now reach beyond solar panels to include batteries and energy storage.

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Rebates did not create the value of solar. Solar already brought environmental and energy benefits. Rebates made solar affordable, helping the market grow and driving down costs for everyone who came after. If you are considering solar or a battery, Stag Electrical can explain which current incentives may apply, how they have been calculated, and what the complete installation will cost. The right quote should show the genuine price, the available discount, and exactly what you are getting without hiding behind the word “rebate.”

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Frequently Asked Questions About Solar Rebates

What Is the Australian Government Solar Rebate?

The Australian Government solar rebate is a financial incentive under the Small-scale Renewable Energy Scheme. Eligible solar systems create Small-scale Technology Certificates, or STCs, which have financial value. Most customers exchange the right to create these certificates for an upfront discount on their solar system.

Is the Solar Rebate a Cash Payment?

Not usually. Some early Australian solar rebates were paid directly to households, but today’s federal incentive generally appears as a discount on your solar quote. Your solar retailer or authorised agent usually manages the certificates, so you do not have to wait for money to be deposited into your account.

Is the Solar Rebate Already Included in My Quote?

In most cases, yes. Solar retailers generally advertise prices after deducting the estimated value of the STCs. Your quote should clearly show if the incentive has been applied. If unclear, ask whether the quoted price is before or after the STC discount.

How Much Is the Solar Rebate Worth?

The value depends on your solar system’s size, installation location, year, expected electricity generation, and current market value of STCs. Larger eligible systems generally create more certificates, but you must calculate the final discount for each installation.

Who Is Eligible for the Solar Rebate?

Households and businesses installing an eligible small-scale solar system may qualify. The system must use approved equipment, comply with the scheme’s requirements, and be designed and installed by accredited professionals. Eligibility is tied to the system and installation, not a universal cash payment available to every applicant.

Do I Need to Apply for the Solar Rebate Myself?

Usually not. Most customers assign the right to create STCs to their solar retailer or authorised agent in exchange for an upfront discount. The retailer generally handles the certificate process, though you will need to provide information and sign documents confirming the assignment.

Why Does the Solar Rebate Reduce Each Year?

The Small-scale Renewable Energy Scheme is scheduled to end on 31 December 2030. The number of certificates available for rooftop solar progressively reduces as the scheme nears its end. This reflects fewer years of renewable generation remaining under the scheme and the falling cost of solar technology.

Can I Receive the Solar Rebate More Than Once?

An additional or expanded solar installation may qualify for STCs if it meets eligibility requirements. However, you cannot claim the incentive twice for the same equipment or installation. Replacing panels or adding capacity does not automatically guarantee eligibility, so assess the proposed work before installation.

Are Solar Batteries Covered by the Rebate?

Eligible batteries installed with a new or existing solar system may receive an upfront discount through the Australian Government’s Cheaper Home Batteries Program. The battery incentive is calculated using eligible usable capacity and has its own equipment, installation, and participation requirements.

Can I Combine Solar and Battery Incentives?

Potentially. A household may be eligible for STCs on a new solar installation and a separate certificate entitlement for an eligible battery. Some state, territory, and local government programs may also combine with federal incentives, but the rules differ by program.

Is a Feed-in Tariff the Same as a Solar Rebate?

No. A solar rebate reduces the upfront cost of purchasing a system. A feed-in tariff is the amount your electricity retailer credits you for excess solar electricity exported to the grid after installation.

Is an Interest-Free Solar Loan a Rebate?

No. A rebate or STC incentive reduces the system cost, while an interest-free loan lets you repay the remaining cost over time. Even with no interest, you must still repay the borrowed amount.

Who Pays for the Federal Solar Rebate?

The STC incentive operates through a government-regulated certificate market. Electricity retailers and other liable entities must acquire and surrender certificates to meet their renewable-energy obligations. This compulsory demand gives STCs their financial value.

Will the Solar Rebate Pay for My Entire System?

Generally, no. The STC incentive reduces part of the upfront price but usually does not cover the entire installation. You may also need to pay for additional work such as switchboard upgrades, meter changes, difficult roof access, or other site-specific electrical requirements.

How Can I Check Whether the Correct Rebate Has Been Applied?

Ask your solar retailer to show the STC entitlement and discount on your quote. The quote should also identify the proposed panels, inverter, system capacity, installation inclusions, and any possible additional costs. Stag Electrical can explain how the available incentive has been calculated and show you exactly what is included in your final system price.

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