Is solar worth it in Australia in 2026?
For most Australian households, yes — but by a margin that depends almost entirely on two numbers: your self-consumption percentage and your import rate. The 2026 federal rebate (through the Small-scale Renewable Energy Scheme) is worth roughly $1,400–$2,000 for a typical 6.6 kW system, bringing net installed costs to around $5,500–$7,000 in most capital cities. At those prices, the maths work for most households — but only if you model the savings correctly.
The most common mistake is valuing all solar generation at the full grid import rate. That overstates savings by a wide margin. Only the electricity you actually use during the day replaces grid imports. Everything else goes to the grid as an export, earning only the feed-in tariff — typically 5–10¢/kWh in 2026 compared to 28–35¢/kWh for grid power you would have bought. For a system where 70% of generation is exported, that's the difference between 32¢ savings and 6¢ earnings on most of your solar output.
The calculator above handles this correctly: savings are always calculated as (self-consumed kWh × import rate) + (exported kWh × feed-in tariff). The self-consumption percentage is your most important input.
The solar STC rebate explained
The solar panel rebate works through the Small-scale Renewable Energy Scheme (SRES), administered by the Clean Energy Regulator. Your installer creates Small-scale Technology Certificates (STCs) and applies the market value as an upfront discount on your quote — you don't apply separately.
The rebate formula is: STCs = system kW × zone rating × deeming years. There are no capacity tiers — unlike the battery CHBP rebate, every kilowatt earns the same zone rate. The deeming period for 2026 installs is 5 years (2026 through 2030), and it steps down by one each January 1.
| STC zone | Main locations | Zone rating | STCs for 6.6 kW (2026) |
|---|
| Zone 1 | Darwin, far north QLD | 1.622 | 53.5 STCs |
| Zone 2 | Brisbane, Perth, Alice Springs | 1.536 | 50.7 STCs |
| Zone 3 | Sydney, Melbourne, Adelaide, Canberra | 1.382 | 45.6 STCs |
| Zone 4 | Southern Tasmania, alpine areas | 1.185 | 39.1 STCs |
Zone ratings as at July 2026. STC spot price ~$40/STC gross. At 10% admin, net ≈ $36/STC — confirm with your installer at time of purchase. Deeming period steps down 1 Jan 2027 from 5 to 4 years, reducing the rebate by ~20%.
How to increase your self-consumption (and your returns)
Most households without a battery or EV self-consume 25–35% of their solar generation. The rest exports at the feed-in tariff. Pushing self-consumption to 40–50% can improve annual savings by 20–35% from the same panels.
- Shift appliances to daytime. Set your dishwasher, washing machine, and dryer to run during the middle of the day when solar output is highest.
- Hot water on timer. A resistive hot water system is one of the biggest loads in a home. Setting it to heat between 10 am and 3 pm can add 3–5 kWh/day of self-consumption.
- EV charging. If you have an electric vehicle, charging during daylight hours from solar can dramatically increase self-consumption and improve EV running costs at the same time.
- Battery storage. A home battery captures surplus solar during the day and discharges it at night, pushing self-consumption to 70–90%. The economics depend on battery cost vs the FiT spread — use the Solar Battery ROI Calculator to model whether a battery adds up after your solar system is in place.
Frequently asked questions
How does the solar panel STC rebate work in 2026?
The solar panel rebate runs through the Small-scale Renewable Energy Scheme (SRES), administered by the Clean Energy Regulator. When your installer commissions a new solar system, they create Small-scale Technology Certificates (STCs) on your behalf and sell them — applying the proceeds as an upfront discount on your invoice. The number of STCs depends on three things: your system's peak capacity in kilowatts, your postcode's STC zone rating (a number between 1.185 and 1.622 set by the CER), and the deeming period — the number of years remaining until SRES ends on 31 December 2030. For a 2026 install that's 5 years. At roughly $40/STC gross (and approximately $36/STC after installer admin fees), a 6.6 kW system in Zone 3 (Sydney/Melbourne) generates around 46 STCs worth approximately $1,640 in rebate. The deeming period steps down by one year each January 1, so the rebate shrinks each year until SRES ends.
How is the solar STC rebate different from the battery CHBP rebate?
They are separate programs with different formulas and different step-down schedules. The solar SRES rebate (for panels) uses the formula: STCs = system kW × zone rating × deeming years. There is no tier structure — every kW earns the same zone-rated rebate. The Cheaper Home Batteries Program (CHBP) is a separate federal scheme for home batteries. It uses a per-kWh formula with three capacity tiers (100% for the first 14 kWh usable, 60% from 14–28 kWh, 15% from 28–50 kWh) and a different zone factor. SRES for solar ends 31 December 2030; CHBP for batteries has its own schedule. Never apply battery tier logic to a solar rebate calculation.
Why does self-consumption % matter so much?
It is the single biggest lever in your solar economics after system size. Every kWh you use in your home during daylight hours is worth the full import rate — typically 28–35¢/kWh. Every kWh you export earns only the feed-in tariff — typically 5–10¢/kWh in 2026. The gap between these two rates (the 'spread') can be 25¢ or more per kWh. At 30% self-consumption with a 32¢ import rate and 6¢ FiT, your blended saving is about 14¢/kWh generated. At 50% self-consumption the blended saving jumps to 19¢/kWh — a 36% improvement in returns from the same panels. Strategies to increase self-consumption include: running the dishwasher and washing machine during daylight, setting hot water systems to heat during the day, EV charging during the day, and adding a battery for overnight storage.
What is a typical solar payback period in Australia in 2026?
For a quality 6.6 kW system at current installed prices (~$7,900 before rebate, ~$6,300 after the STC rebate), with 30% self-consumption, a 32¢/kWh import rate, and a 6¢ FiT in Zone 3 (Sydney/Melbourne), the payback period is typically 4–6 years. Lower self-consumption, lower import rates, or a high installed cost push this toward 6–9 years. Very low feed-in tariffs (below 4¢/kWh) and low self-consumption can extend payback to 10+ years. Solar payback is best in Zone 2 cities (Brisbane, Perth) due to higher solar yield. On a time-of-use tariff with a high peak rate, the effective import rate you're avoiding is higher, which improves the economics further.
What STC zone am I in?
Your STC zone is determined by your postcode and can be looked up on the Clean Energy Regulator's interactive zone map at cer.gov.au. As a rough guide: Zone 1 covers Darwin and far north Queensland (highest solar resource); Zone 2 covers Brisbane, Perth, Townsville, and Alice Springs; Zone 3 covers Sydney, Canberra, Melbourne, and Adelaide (the majority of Australian households); Zone 4 covers parts of southern Tasmania and alpine areas. If you're unsure, Zone 3 is the right default for most mainland capital city households. Your installer will confirm your exact zone when providing a quote.
Does the solar STC rebate expire?
Yes. The Small-scale Renewable Energy Scheme (SRES), which funds the solar panel STC rebate, is legislated to end on 31 December 2030. Systems installed on or after 1 January 2031 will not receive any STC rebate under the current legislation. Additionally, the rebate shrinks each year because the deeming period (the number of years from installation to SRES end) decreases by one year on each January 1. For a system installed in 2026, the deeming period is 5 years; for one installed in 2027 it will be 4 years — reducing the STC count and therefore the rebate by roughly 20%. Installers cannot issue STCs for projected deeming years beyond 2030.
How is solar generation affected by panel degradation?
All solar panels lose a small amount of output efficiency each year as the photovoltaic cells age. Quality Tier-1 panels typically degrade at around 0.3–0.7% per year, with most manufacturers guaranteeing at least 80% of original output at 25 years (implying a maximum of ~0.8% annual degradation). At 0.5% per year, a 6.6 kW system that generates 9,108 kWh in Year 1 would generate around 7,991 kWh in Year 25 — about 12% less. The calculator applies this compound degradation to each year's savings projection, which is why the 25-year total savings are less than Year 1 savings multiplied by 25.
Can I claim both the solar STC rebate and the battery CHBP rebate?
Yes, if you install solar panels and a battery. The solar panel STC rebate (SRES) and the battery Cheaper Home Batteries Program (CHBP) are separate programs with separate eligibility. You can claim both on the same installation, provided the solar panels and battery both meet their respective program requirements. The solar rebate is calculated on panel system capacity; the battery rebate on battery usable capacity — they do not affect each other. Installers who are CEC-accredited for both systems can handle both rebate applications simultaneously.
Solar generation estimates are based on average zone yields from Clean Energy Regulator data and SolarQuotes installer averages as at July 2026. Actual system output depends on panel orientation, roof pitch, shading, inverter efficiency, and soiling. STC rebate uses the SRES formula (system kW × zone rating × deeming years × net STC price) and is separate from the battery CHBP rebate. SRES ends 31 December 2030 — deeming period steps down each January 1. STC spot price fluctuates. Self-consumption percentages are estimates — actual figures depend on your household load profile. This calculator does not account for time-of-use tariff optimisation, energy retailer switching, or system performance guarantees. Figures are estimates only. Not financial, energy, or investment advice.
This article is for general information only and does not constitute financial, tax or legal advice. Individual circumstances vary. Consult a licensed financial adviser or energy consultant before making decisions based on this information.