After the announcement of Gillard government’s green subsidy scheme it will end the era of installing rooftop solar systems for free or at little cost. The Government has announced that they are reducing the rebate by 20% (about $1200) in July 2011.

The federal Climate Change Department has drafted regulations, to take effect from January, that would slash thousands of dollars’ worth of subsidies for photovoltaic units installed on homes by 20 per cent or more if “there is systematic evidence that (they) were being provided at little or no out-of-pocket expense to consumers”.

From July 1 2011 the rebate will be reduced by 20%. (brought forward 6 months from the original date of 1 Jan 2012)

From Jan 1 2013 the scheme will be reduced by a further 25%.

From 2014 it gets reduced by a further 33%.

From 2015 there is no rebate.

The units are generally installed as solar panels on the roof, which convert the sun’s energy into electricity to power a home or is fed into the electricity grid.

First, to be eligible for the rebate, your taxable income should not be over $100,000. The taxable income includes cars, your home, and the money you earn each month from working. All these acest will add up in your yearly taxable income. In addition, if you claimed the previous rebate (before 10 June 2009), you can’t claim solar credits to extend your system.

If 10 per cent of buyers spend less than $1000 for their solar power system per kilowatt of capacity, the federal Office of the Renewable Energy Regulator will reduce the number of renewable energy certificates issued for those units, according to the draft new rules.

The subsidies, widely used by solar power companies to discount the price of their products and boost sales, are supplemented by a separate premium paid for green power fed into state electricity grids.

Clean Energy Council policy director Russell Marsh said that governments and electricity users were footing the entire bill for some rooftop solar systems.

“There are some instances where, in some places, in some states, people have been advertising free systems because of some of the generous rebates available,” Mr Marsh said. An Australian National University review this week revealed two-thirds of the solar panels funded under a $1.1 billion federal rebate scheme were installed in well-off suburbs.

Last month, NSW pulled back its support for the fast-growing home solar power industry, by cutting by two-thirds its generous feed-in tariff for power supplied from household units.

Lastly, there are two different ways of being paid for this tariff, and which one you get depends on where you live. The first is only available to New South Wales and Australian Capitol Territory. This tariff pays you for the energy that you feed back into the grid as well as the energy you are using. The second tariff, also the most common one, is a tariff to pay you for the energy that you feed back to the grid to the power companies. This one does not pay for what you use.