Government concessions

Purchasers of solar water heaters may receive a range of federal, state, and local government rebates, grants and subsidies.

The calculations and qualifications for these concessions can be complicated, but your local installer should be able to advise you on what is available for your house.

We will also gather and partially complete the paperwork for you. All you have to do is have the installer record the appropriate installation date and serial numbers and sign off that the system has been installed and is operational in accordance with the concession requirements. You then complete a couple of questions specific to you, put the forms in the post and wait for your direct deposit or cheque to arrive.

Local government concessions are not always well publicised. Please tell us if you know of concessions from your Council or Shire.

Concession details

Set out below are the main rebates, grants and subsidies available from the federal government, state governments, and local government that we are aware of.

Federal government $1000 grant

Sunglow cannot apply for the federal government $1000 grant on your behalf. The grant can only be paid directly into your personal bank account after you personally submit the grant application forms through a Medibank outlet.

To receive the federal government's $1000 grant, the major qualifying condition is that you must be replacing an electric storage water heater. There are a few other obvious conditions, including the condition that you have not previously received a Solar Hot Water Rebate or a Home insulation grant at the same address. The link below will take you straight to the federal government's web site where you can review all the qualifying terms and conditions to receive the $1000 rebate. This $1000 is paid directly to you by the federal government, usually within 60 days after installation and with Sunglow, you don't have to apply any of this rebate against your Sunglow Lease. The $1000 is all yours to be used for whatever purpose you want.

Up until February 3rd 2009, there used to be a means test to qualify for the Solar Hot Water Rebate. But not any more. Now, if you qualify, you get the full amount of the rebate regardless of your financial well being.

If you receive the grant, it is considered to be a tax free payment by the Australian Taxation Office and there is no need to report the payment on your tax return.

http://www.greenhouse.gov.au/solarhotwater

Federal government Renewable Energy Certificates (RECs)

Under the Sunglow offer, we assume that your preferred supplier will offer a point of sale discount based on the market value of the RECs specific to your installation at the time you accept the quote. You do not have to be concerned about buying, selling or managing the RECs as all of our approved suppliers are also approved Agents to buy and sell RECs.

RECs are managed by the federal government through the Australian Greenhouse Office and the Office of the Renewable Energy Regulator. Electricity retailers buy the RECs as a way of offsetting their greenhouse emissions under the Australian Government Mandatory Renewable Energy Act.

Typically you will receive between 26 and 36 RECs, depending on your solar water heater's size and type, and the type of hot water system you are replacing, as well as your location.

The value of RECs varies every day depending on how many buyers and sellers there are in the market. Over the last few years, they have fluctuated between $10 and $55 per REC. In April 2010, RECs traded at around $42 each and they will probably fluctuate somewhere around this price until January 2011. From January 2011, the Federal Government has set a fixed price of $40 per REC as part of its Enhanced Renewable Energy Target Scheme. Solar Hot Water RECs will be priced at $40 per REC under the newly identified Small-scale Renewable Energy Scheme, whereas larger projects will still have fluctuating REC pricing under the newly identified Large-scale Renewable Energy Target. The objective is to create certainty for householders with respect to the value of RECs, and for large projects the pricing will fluctuate and will be driven by market forces.

http://www.orer.gov.au/

Who gets the RECs

Remember that RECs are specific to the particular system you choose and the area where you live. The price of the RECs will also change from day to day just like the price of any other commodity. The actual value of the RECs can be advised to you at the time of requesting a quote, but its value may vary depending on when you place an order.

The typical installed cost of a complete solar hot water system before the RECs point of sale discount should be in the range $4,500 to $5,500. A standard house with two panels on the roof and a 250 to 315 litre storage tank should generate between 26 to 38 RECs. The market value of these RECs is currently between $1100 to $1700.

To keep things very simple, Sunglow calculated that if the installed cost of a solar water heater could be reduced to less than $4,000 after a point of sale discount for the RECs, then annual lease payments should be less than the annual cost of electricity to heat the same amount of hot water as could be delivered by your solar hot water heater.

If, for some reason, the installed cost after the RECs point of sale discount is greater than $4,000, then we suggest that you get another quote. If your house is indeed a difficult site with high installation costs and you really do need an expensive model, then you will need to fund the excess above $4,000 yourself.

However, if the installed cost after the RECs point of sale discount is less than $4,000, then you will have a lower Lease Amount and of course lower quarterly payments. You will always benefit by having a relatively standard installation and/or a well priced quote.

State Government concessions

Queensland

Solar water heaters do not attract a Queensland government rebate.

New South Wales

You can receive a rebate of between $400 and $1200 for replacing an electric water heater. The size of the rebate depends on the REC rating of the system you choose.

http://www.environment.nsw.gov.au/rebates/ccfhws.htm

ACT

Solar water heaters do not attract an ACT government rebate.

Victoria

You receive between $300 and $1500 for eligible systems, depending on the size of household and the type of installation. Other concessions are available if you do not live in the greater Melbourne metropolitan area.

http://www.sustainability.vic.gov.au/www/html/1364-rebates.asp

Tasmania

Solar water heaters do not attract a Tasmanian government rebate.

A rebate of $500 is available from the Hobart City Council.

http://www.hobartcity.com.au/HCC/STANDARD/pc=pc=pc=pc=PC_1234

South Australia

A rebate of up to $700 is available depending on the type of installation and the size of the solar component.

http://www.dtei.sa.gov.au/energy/

Western Australia

A rebate of $500 is available for solar water heaters boosted by natural gas. The rebate rises to $700 for bottled LP gas-boosted heaters used in areas without reticulated gas.

http://www1.sedo.energy.wa.gov.au/pages/subsidy.asp

Nothern Territory

Solar water heaters do not attract a Northern Territory government rebate.

Local government

Local government concessions are not always well publicised. Please tell us if concessions are available from your Council or Shire. You should also ask the consultants when you are getting quotes if there are specific local government concessions.