Australian Government's Small-scale Renewable Energy Scheme for 2026 Explained

Everything You Need to Know About STCs in 2026

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The so-called "government solar rebate" appears in countless ads, promising thousands in savings from government incentives. But there isn’t a federal solar rebate.

What most people call the "solar rebate" is the Australian Government's Small-scale Renewable Energy Scheme (SRES). Instead of a cash payment, it issues Small-scale Technology Certificates (STCs) with financial value. These certificates are typically assigned to your installer, who applies them as an upfront discount to reduce the cost of installing an eligible solar system or battery.

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Even though the result is a lower price, the scheme’s details often confuse people. This makes it hard to compare quotes, understand why one installer’s "rebate" differs from another’s, or know whether you’re getting all the incentives you deserve. The value of STCs changes based on your system’s size, location in Australia, and installation timing. Adding to the confusion, some states and territories also offer rebates, loans, or battery incentives that can be combined with the federal scheme to further reduce upfront costs.

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The past year brought significant changes, including expanding the SRES to cover eligible home batteries and adjusting how battery incentives are calculated. These updates create new opportunities for homeowners to maximise their investment. In this guide, we’ll explain how the Small-scale Renewable Energy Scheme works, clarify STCs and their calculation, explore incentives in every state and territory, and show how the latest changes can help Australian homeowners choose solar or battery storage with confidence.

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What Is the Small-scale Renewable Energy Scheme?

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The Small-scale Renewable Energy Scheme (SRES) is an Australian Government initiative encouraging households and businesses to adopt renewable energy. Launched under Australia's Renewable Energy Target, the scheme reduces greenhouse gas emissions, increases clean energy use, and makes green technology more accessible and affordable for Australians.

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Instead of cash rebates or grants, the SRES uses Small-scale Technology Certificates (STCs). These certificates prove the clean electricity your system is expected to produce over time. Electricity retailers must buy a set number of STCs each year, so these certificates have real financial value, lowering the upfront cost of installing your renewable energy system.

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For most homeowners, the process is refreshingly straightforward. Rather than juggling certificates yourself, you hand them over to your accredited solar installer. The installer then applies their value as an instant discount to your quote, so you start saving from day one.

The SRES covers many renewable energy technologies, from rooftop solar panels and solar water heaters to air source heat pumps and, recently, eligible home battery systems. As one of Australia's strongest renewable energy incentives, the scheme has helped millions of households reduce both upfront installation costs and ongoing electricity bills. Small-scale Technology Certificates (STCs) are special credits for renewable energy, each with real financial value.

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When you install an eligible solar system, it is expected to produce clean electricty for years to come. This future energy production earns you a set number of STCs. These certificates can be traded in Australia's renewable energy market, where electricity retailers buy them to meet legal requirements under the Renewable Energy Target. They are transferred to your installer during purchase. The installer claims the certificates and deducts their value from your solar system's price, giving you immediate savings without extra paperwork.

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The number of STCs your system receives isn't random. It's calculated using several key factors, including:

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• The size of your solar system (measured in kilowatts)
• Where your property is located within Australia's solar zones
• How much electricity the system is expected to generate
• The number of years remaining in the Small-scale Renewable Energy Scheme

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Larger solar systems in sunnier locations are expected to generate more renewable electricity over their lifetimes. They usually earn more STCs than smaller systems in less sunny areas. It is also worth noting that the scheme is winding down. Since the SRES is set to finish in 2030, the number of available certificates declines each year as the deeming period shortens. So, homeowners who install solar today usually get fewer STCs than those who installed in the past, but the discount can still knock thousands off your upfront costs.

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Why Do Different Solar Quotes Show Different Rebates?

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A common myth about solar incentives is that everyone gets the same government rebate. They don't.

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If you have gathered a few solar quotes, you might have spotted that the advertised "government rebate" changes from one installer or property to another. This can make it seem like some companies offer better deals, but in reality, the difference usually comes down to how STCs are calculated. The value of your STC discount depends on several key factors, and your location is one of the most important.

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Australia is split into different solar zones, each representing how much sunshine that area usually gets each year. The sunnier your location, the more electricity your solar system is expected to produce over its lifetime.

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Since STCs are tied to how much energy your system is expected to generate, not how much it costs, homes in sunnier regions usually receive more certificates than those in less sunny areas.

For example:

• A home in Northern Queensland will typically receive more STCs than a similar-sized system installed in Melbourne.
• A property in inland New South Wales may receive more certificates than an equivalent system installed in coastal Victoria.

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This does not mean one state gets a better federal incentive than another. The Australian Government uses nationally recognised solar zones to estimate how much renewable electricity your system will likely produce over time.

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System size also makes a difference.

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The bigger your solar system, the more electricity it is expected to generate and the more STCs you could receive.

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• A 6.6 kW system will generally receive fewer STCs than a 10 kW system.
• A 10 kW system will generally receive fewer STCs than a 13.2 kW system.

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That is why bigger home solar systems often come with a much larger upfront discount.

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Installation date affects your discount.

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Another thing many homeowners do not realise is that the number of STCs available slowly drops each year. Since the Small-scale Renewable Energy Scheme ends in 2030, the number of years your system is credited for renewable electricity shortens each year. Systems installed today get fewer certificates than those installed a few years ago. Energy prices also change over time, so the federal incentive gradually becomes smaller each year.

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When comparing solar quotes, make sure to look beyond the advertised rebate. A good installer will explain exactly how your STC discount was calculated, show how it is applied to your quote, and ensure you receive every incentive you deserve based on your location and system design.

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The Size of Your System

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The size of your solar system plays a significant role in determining how many Small-scale Technology Certificates (STCs) it will generate. The bigger your solar system, the more clean energy it will likely generate over its lifetime. Since STCs are tied to this output, a larger system usually means more certificates and a bigger upfront discount. But the main point is that bigger is not always better: the right size depends on your household’s electricity habits, roof space, future plans, and budget.

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For example, all other factors being equal:

• 6.6 kW system → Fewer STCs
• 10 kW system → More STCs
• 13.2 kW system → Even more STCs

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But bigger does not always mean better. The best system size depends on your household’s electricity habits, roof space, future plans, and budget. If your system is too small, you might miss long-term savings. If it is much larger than you need, you could pay more upfront and not get the best return on your investment.

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A good solar installer will tailor your system to fit your home, not just push the biggest option. They will look at whether you plan to charge an electric vehicle, add battery storage, run a pool, work from home, or expect your family and energy needs to grow. In the end, the goal is not just to get the biggest STC discount. The aim is to ensure your solar investment delivers the most value over the next 20 to 30 years.

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When You Install

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Timing affects how many STCs you can get. The scheme was never intended to operate indefinitely. It is designed to gradually decline as renewable energy becomes more affordable and widely adopted across Australia. This gradual reduction is known as the deeming period.

When the scheme was introduced, new solar systems were eligible to claim certificates based on many years of expected renewable energy generation. As Australia approaches the scheme's scheduled conclusion in 2030, fewer years remain in that calculation. As a result, the number of STCs available for new installations decreases each year.

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This means that a homeowner installing the exact same solar system today will generally receive fewer STCs than someone who installed an identical system several years ago.

The reduction happens slowly, not all at once, but the federal incentive shrinks a little each year. Waiting even a year will probably not cost you thousands, but it can reduce the upfront discount you get through the SRES. The main takeaway is to look beyond the rebate and think about long-term savings on your bills and the freedom of future energy independence.

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One of the best things about the Small-scale Renewable Energy Scheme is how much it can cut the upfront cost of going solar. Savings vary from one property to another because they depend on factors such as your location, system size, installation date, and the number of STCs your system is eligible for. For many Australian households, STCs reduce the purchase price of a residential solar system by several thousand dollars.

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Unlike some other government programs, you usually do not have to fill out forms or wait for a rebate after your solar is installed. Instead, your accredited solar installer will typically calculate the number of STCs your system is expected to generate and include their value directly in your quote. If you choose to assign the certificates to your installer—which most homeowners do—the discount is applied immediately, reducing the amount you pay on installation day.

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For many, this makes solar much more affordable than they first thought. Instead of paying the full price, the federal incentive is applied to the upfront cost, so you start saving on your electricity bills as soon as your system is up and running. Remember, STCs are just one piece of the puzzle. Your long-term savings also depend on how much electricity you use, how much solar power you use at home, your feed-in tariff, your electricity provider’s rates, and whether you add a battery. The main point is that STCs help reduce upfront cost, but your overall savings come from the full mix of factors over time.

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Recent Changes Australians Should Know

Batteries Are Now Included

One of the biggest changes to the SRES has been the expansion of incentives to include eligible home batteries. Since 1 July 2025, eligible battery systems have also been eligible for an upfront discount through the federal Cheaper Home Batteries Program, delivered via the SRES. This has made battery storage significantly more affordable for households looking to store excess solar energy for evening use.

Battery Incentives Changed Again in 2026

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From 1 May 2026, the way battery STCs are calculated changed.

Rather than receiving the same level of support across all battery sizes, the incentive now tapers for larger batteries. The change was introduced to keep the overall discount at roughly 30% while reflecting falling battery prices.

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State-by-State Incentives

While STCs are available Australia-wide, each state offers different programs in addition to the federal incentive.

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New South Wales

NSW offers additional incentives for eligible battery owners who connect to a Virtual Power Plant (VPP), allowing households to earn extra value by supporting the electricity grid. These incentives can generally be combined with the federal battery discount.

Victoria

Victoria continues to offer separate state programs, including solar panel loans and rebates for eligible households through Solar Victoria, alongside the federal STC scheme.

Queensland

Queensland currently relies primarily on the federal STC scheme. Previous state battery rebate and loan programs have closed, although future initiatives may be announced.

South Australia

South Australia's previous Home Battery Scheme has closed, but some electricity retailers continue to offer Virtual Power Plant incentives that may provide additional value.

Western Australia

WA has its own Distributed Energy Buyback Scheme (DEBS), which pays eligible households for exported solar electricity. The federal STC discount still applies to eligible installations.

Australian Capital Territory

The ACT's Sustainable Household Scheme provides eligible households with access to zero-interest loans for renewable energy upgrades, including solar and batteries.

Tasmania

Tasmanian households primarily rely on the federal STC program, although some retailers and financing options provide additional assistance depending on the installation.

Northern Territory

The Northern Territory has historically operated separate renewable energy grants from time to time, but eligibility and availability vary. Most households continue to benefit from the national STC scheme where eligible.

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Common Misconceptions About the Solar Rebate

Australia's solar incentives are surrounded by plenty of myths and half-truths. Let's shine a light on the most common misconceptions and reveal the real story behind each one. "The government sends me a cheque." This misunderstanding is one of the most widespread. Unlike some government grants, you typically won't receive a cheque from the Australian Government after installing solar.

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Eligible solar systems generate Small-scale Technology Certificates (STCs). Most people give these to their installer, who sells them on the STC market. The value of your certificates is deducted from your solar quote as an upfront discount. You enjoy savings from the start, without waiting months for a rebate. For most homeowners, the process is hassle-free. Your installer handles the paperwork, and the STC discount is included in your quote.

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"Everyone gets the same rebate."

Just as every home is unique, so too are the incentives you receive.

The number of STCs your system receives depends on several factors:

• The size of your solar system
• Your location within Australia's solar zones
• The expected electricity generation of your system
• The year your system is installed

For instance, a bigger solar system in sunny northern Australia could earn you more STCs than a smaller setup in the south.

That’s why comparing your “rebate” with friends or neighbours can be misleading. Even houses on the same street may get different STC values depending on their system’s design.

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"The rebate is ending tomorrow."

This myth often fuels high-pressure sales tactics that rush homeowners.

The Small-scale Renewable Energy Scheme isn't disappearing overnight.

Instead, the scheme is winding down slowly until 2030. Each year, the number of STCs you can claim for a new system drops slightly due to the deeming period.

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In simple terms:

• The sooner you install, the more STCs you’re likely to receive.
• If you wait a few years, your upfront discount could shrink.
• There is no sudden drop where the incentive vanishes overnight.

You shouldn’t feel pressured to buy solar before you’re ready. Knowing how the scheme works helps you make a smart choice rather than just fall for sales pitches.

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Is Now Still a Good Time to Install Solar?

For most Australian households, the answer remains a resounding yes.

Even though the federal STC incentive shrinks each year, solar still delivers great long-term value. Electricity prices are high, and families use more power than ever.

Many families are also preparing for future energy needs such as:

• Electric vehicles
• Home batteries
• Reverse-cycle air conditioning
• Working from home
• Increased daytime electricity usage

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Installing solar now helps you get ahead of rising energy costs and rely less on expensive grid electricity. Depending on where you live, you might also stack your federal STC discount with state rebates, interest-free loans or Virtual Power Plant (VPP) offers. New federal battery incentives have made it easier for households to add battery storage, so you can use more of your own solar power at night instead of sending it back to the grid.

Waiting isn’t always a mistake, but keep in mind the federal incentive shrinks every year. Even if solar prices change, the number of STCs for new systems will continue to decline until the scheme ends. The right time to go solar isn’t about chasing a sales deadline. It’s about when the numbers add up for your home.

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At STAG Electrical, we believe you deserve to know exactly where every dollar in your quote comes from.

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Instead of just showing a discounted price, we break down your quote so you can make a confident, informed decision. Every solar proposal includes a transparent breakdown of:

• Your federal STC discount and how it has been calculated
• Any applicable state rebates, loans or battery incentives
• Estimated annual electricity generation
• Projected electricity bill savings
• Expected payback period
• Recommended system size based on your household's energy use. We refuse to hide costs behind jargon or hype, so-called “limited-time rebate” claims.

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Instead, we walk you through how the incentives work, why your system qualifies for its STC value, and how that translates into long-term savings. Our goal isn’t just to install solar. We want you to understand your investment, so you can pick the right system with confidence.

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Final Thoughts

Thanks to Australia’s Small-scale Renewable Energy Scheme, millions of households have slashed the upfront cost of rooftop solar, making clean energy more affordable than ever.

Terms like STCs, deeming periods, and federal incentives might sound confusing, but the idea is simple: eligible solar systems generate certificates that reduce your upfront costs.

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Knowing how these certificates are calculated and how they interact with state incentives and battery programs gives you the upper hand when comparing quotes. The lowest quote isn’t always the best deal, and the biggest “rebate” doesn’t guarantee the most savings. What really counts is picking a solar system that fits your home, your energy use and your future plans.

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A good installer will walk you through your quote, answer your questions honestly and offer clear advice, not just chase a sale. When you understand how the incentives work, you're far more likely to make a confident investment that continues delivering savings for many years to come.

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Frequently Asked Questions

Is there really a government solar rebate in Australia?

Not exactly. Many people call it the "government solar rebate," but the Australian Government provides financial assistance through the Small-scale Renewable Energy Scheme (SRES). Eligible solar systems generate Small-scale Technology Certificates (STCs), which usually reduce your upfront installation cost.

What are Small-scale Technology Certificates (STCs)?

STCs are renewable energy certificates created when an eligible solar or battery system is installed. They have financial value because electricity retailers must purchase them under Australia's Renewable Energy Target. Most homeowners assign their STCs to their installer for an immediate discount on their system. Reviewing them can help you see how that value becomes savings.

How are STCs calculated?

The number of STCs your system receives depends on factors such as the size of your solar system, your location in Australia's solar zones, the renewable energy your system is expected to generate, and the years remaining in the Small-scale Renewable Energy Scheme. Reviewing these factors can help you understand why your rebate amount varies.

Why do different solar companies show different rebate amounts?

The STC discount is generally similar for the same system at the same property. However, quotes can differ because installers may use different system sizes, equipment, pricing, or assumptions. A reputable installer should clearly explain how your STC discount was calculated. Reviewing this helps you compare quotes more confidently.

Do I have to apply for STCs myself?

In most cases, no. Your accredited installer usually manages the process. Simply assign the certificates to the installer, who deducts their value from your quote before installation.

How much can STCs reduce the cost of solar?

The exact savings vary depending on your location, system size, and installation date, but STCs often reduce the upfront cost of a residential solar system by several thousand dollars. Ask your installer to include the estimated STC discount in your quote.

Do larger solar systems receive more STCs?

Yes. Larger systems generate more renewable electricity over their lifetime and generally receive more STCs than smaller systems. Still, choose the system size based on your household's energy needs, not just the rebate.

Why does my location affect the number of STCs I receive?

Australia is divided into solar zones based on expected solar radiation. Homes in sunnier areas generate more electricity and receive more STCs than similar systems in regions with lower average solar production. Reviewing your zone can help you understand your certificate amount.

Are home batteries eligible for the federal incentive?

Yes. Eligible home battery systems can receive federal financial support through the Australian Government's battery incentive, delivered via the Small-scale Renewable Energy Scheme. This can significantly reduce the upfront cost of installing battery storage with a solar system. Reviewing this incentive can help you assess the savings available.

Can I combine the federal STC incentive with state government programs?

Often, yes. Many states and territories offer additional rebates, interest-free loans, or battery incentives in addition to the federal STC discount. Check the eligibility rules for your location and installation date.

Is the Small-scale Renewable Energy Scheme ending?

The SRES is gradually being phased down and is scheduled to end in 2030. The incentive does not disappear overnight. Instead, the number of STCs available for new installations reduces each year as the scheme nears its end. Reviewing the timing can help you plan before the incentive declines further.

Should I install solar now or wait?

For many households, installing sooner can be beneficial. While solar equipment prices may change, the number of STCs decreases each year. Install earlier to access a larger federal incentive and start reducing your electricity bills sooner.

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