If there’s one thing I’ve learned from working on the MASH community solar bulk-buy for the last five years, it’s this….government rebates can have a truly massive impact on demand. This can be good in lots of ways, particularly when the rebates are attractive as they are now. But it can also cause challenges when rebate values change, especially when they drop and the change comes in quickly.
Value of rebate to drop from 1 July
This is what is happening now. On Friday 22 May, Solar Victoria announced that the value of the battery storage rebate for households will drop by $664 for applications from 1st July 2020. The maximum value of the battery rebate is currently $4,838. The cut means that the value drops to $4,174 (maximum). That’s a 14% drop in value, which is significant in my book!
Who can beat the cut?
The good news is that if you already have 5kW (or more) of solar panels installed on your home – and you meet the eligibility criteria (check this at solar.vic.gov.au) – there’s still time to apply for the battery rebate at the current value through the MASH bulk-buy program. However, you’ll need to act quickly as one of the requirements is that Powercor approve connection of the battery to the grid and this can take a few days (and the timing of this is out of our control). Plus there’s only around small supply of battery rebates left for this financial year (56 as of 28 May).
If you don’t have 5kW of solar panels installed and you were hoping to get the rebate at the current maximum value of $4,838, unfortunately this is no longer possible. This is because the solar panels need to be installed first and signed off by an independent electrical inspector before you can apply for the battery rebate. The installation process – from quote to installation to sign-off by the inspector – takes around 4-6 weeks through the MASH program (this is fairly typical for most installers). By the time this has happened, we will be in July so passed the deadline of 1st of July.
Impact on out-of-pocket cost
What difference does this make to the amount you need to pay to get a Powerwall 2 battery installed at your home? Currently, if you have 5kW or more of solar installed and you want a Powerwall 2, the cost is $9,990 inc GST through MASH for a standard installation assuming you meet the eligibility criteria for the rebate. From 1st July, the out-of-pocket cost rises to $10,654. If you want to get the solar as well (say 5.28kW through MASH), the out-of-pocket cost for solar+battery will be $15,691 from 1st July (assuming you are eligible for the battery rebate).
There’s no doubt that battery storage is still a big ticket outlay. Typically payback is still 10 years at best – so for lots of people their reason for installing a battery is generally not purely financial. More commonly, it’s about protection from power outages (the Powerwall 2 does provide this) and greater energy self-sufficiency.
Solar panels rebate situation
For anyone thinking of installing solar panels and wondering if the rebates are changing, the answer is yes they are changing but only by $38. Right now, the maximum solar panels rebate from Solar Victoria is $1,888; from 1st July it will be $1,850. The interest-free loan available through Solar Victoria (in addition to the rebate) will also drop by the same amount.
Rooftop solar still provides an excellent financial return for most households particularly with the rebates as they stand. Battery rebates are still amongst the best in Australia – but as the Solar Homes program rolls out the battery rebates to new postcode areas as part of its 10-year program, it is likely that the value of this rebate will continue to drop each year. Hopefully the price of batteries will also fall so that they becoming increasingly affordable.
To learn more about MASH and request a quote, visit mash.org.au or call 1300 466 274.
This article was written by Jo Kaptein, organiser of the solar bulk-buy programs through the Central Victorian Greenhouse Alliance.