Solar series: What’s changing with Australia’s solar rebates in 2026?

If you’ve been sitting on the fence about going solar, now is the time to climb down and take action. One of the most significant financial incentives available to Australian households - the federal solar rebate - is about to shrink.

Starting 1 January 2026, the Small-scale Renewable Energy Scheme (SRES) will be reduced once again as part of its gradual phase-out, meaning the rebate you receive for installing a solar system will be smaller than it is today.

This isn't just a technical policy update. It's a real change that could cost you hundreds or even thousands of dollars if you delay installing solar panels past the deadline. So, what exactly is changing? Why is it happening? And what should you do about it?

Let’s break it down.

What is the solar rebate?

The term "solar rebate" is commonly used to describe the financial incentive offered by the Australian Government for homeowners and small businesses who install solar systems. It’s not a cashback or cheque - instead, it’s a discount applied upfront to the cost of your system, made possible through the creation of Small-scale Technology Certificates (STCs).

STCs are generated based on the size of your system and how much renewable energy it’s expected to produce between the year of installation and 2030. The number of STCs you get - and therefore the size of your discount - depends on how many years are left in the scheme. This is called the “deeming period.”

The key thing to understand is:

  • The shorter the deeming period, the fewer STCs you receive.
  • Fewer STCs = a smaller rebate = a higher out-of-pocket cost for your solar system.

What’s changing from 1 January 2026?

Right now, in 2025, the deeming period is 6 years. That means your solar system’s expected energy generation over the next six years qualifies you for STCs that reduce your upfront costs.

On 1 January 2026, that deeming period drops to 5 years, which means fewer STCs - and a smaller discount - for anyone installing from that date forward.

This change is part of a planned phase-out of the SRES, with the rebate being reduced every year until it ends entirely in 2030. So, each year you wait, the financial benefit of going solar decreases.

Here’s the impact in plain terms:

  • If you install a typical 6.6kW solar system in December 2025, you could receive a rebate worth over $2,000 (depending on your location and STC price). Install the same system in January 2026, and you could receive 15–20% less. That’s hundreds of dollars lost - simply because of timing.

Is solar still worth it after the rebate reduction?

Absolutely - but timing is everything.

Even with the rebate shrinking gradually, solar remains one of the best long-term investments for Australian households. Rising energy prices, increased usage (especially with electric vehicles and home cooling), and the availability of new battery technologies make solar a smart and future-ready choice.

That said, your return on investment (ROI) is undeniably better the sooner you act. The current rebate significantly reduces the upfront cost, helping most homeowners see a payback period of 3 to 5 years, after which the savings continue year after year.

By locking in today’s rebate before the 2026 reduction, you maximise your savings and ensure you don’t pay more for the exact same system.

How Compare Energy can help you make the switch

At Compare Energy, we’re here to make switching to solar simple, smart, and cost-effective. You don’t need to become an energy expert overnight or decipher confusing quotes - we do the heavy lifting for you.

Here’s how we help:

  • We compare top-rated solar plan providers to get you the best deal
  • We help you maximise your rebate. We’ll guide you through the process of accessing the maximum rebate available before the cut-off. That means helping you understand your STC eligibility, the system size that suits your home, and what’s possible within your budget.
  • We tailor solutions to your home and energy usage. Whether you’re a small household, growing family, or energy-intensive user, we’ll match you with a solar setup that’s designed for your lifestyle and future plans.

There’s no pressure, no hidden costs - just clear comparisons and honest advice.

Why waiting could cost you

Every day closer to January 2026 means you’re losing a little more of your potential rebate. Installers also tend to get booked out toward the end of the year, as the deadline nears and more people rush to lock in the higher rebate.

That’s why the best time to act is now. Don’t wait until it’s too late to get a booking or until the rebate drops. Whether you’re ready to install tomorrow or just want to explore your options, now is the moment to start.

The solar rebate has helped millions of Australians take control of their energy costs - and it’s still available, for now. But with reductions coming in January 2026, time is running out to get the maximum benefit.

If solar has been on your radar, now’s the time to move it to your to-do list. Let Compare Energy help you find the best deal, claim the highest rebate, and make the switch with confidence.

Don’t let this opportunity fade with the sunset. Get in touch today and power your home with smarter, cheaper, cleaner energy.