Solar and Battery Installation GST for Melbourne Electricians

Solar Work Adds a Layer of Complexity Standard Electrical Jobs Don't Have

A straightforward electrical callout has straightforward GST: 10% on the taxable supply, full stop. Solar and battery installation work is different because of Small-scale Technology Certificates (STCs), a rebate mechanism under the Renewable Energy (Electricity) Act 2000 that most customers experience as an upfront discount, but which involves a real financial transaction behind the scenes that needs to be accounted for correctly.

How the STC Discount Actually Works

When a customer gets a solar or battery system installed, they're typically entitled to create STCs based on the system's size and generation capacity. Most installers arrange for the customer to assign the right to create these certificates to the installer (or a third-party aggregator) in exchange for an upfront point-of-sale discount, so the customer never has to deal with the certificate registry directly. That discount reduces what the customer actually pays.

GST applies to the amount the customer actually pays, after the STC discount, not the full pre-discount system price. An invoice that charges GST on the gross price and then applies the STC discount as a separate line item risks overstating the GST liability. The invoice should clearly show the discounted price as the consideration for GST purposes.

If You Trade the STCs Yourself

Some electricians, particularly those doing higher volumes of solar work, register with the Clean Energy Regulator's REC Registry and create and sell STCs themselves rather than passing the transaction through a third-party aggregator. In that case, the proceeds from selling the certificates are assessable income, and if you're GST registered, GST generally applies to that sale as a separate taxable supply from the installation itself. This needs its own income account in Xero, blending STC trading income with installation revenue makes it impossible to see the true margin on either activity.

CEC Accreditation Is Not Optional If You Want to Offer the Rebate

Only installations carried out by a Clean Energy Council (CEC) accredited installer, using CEC-approved panels, inverters and batteries, are eligible to generate STCs. An electrician who lets their CEC accreditation lapse can still do solar work, but can no longer offer customers the STC discount, which typically makes their quotes substantially less competitive, since the discount is a significant portion of the customer-facing price on residential systems. Renewal deadlines and CPD requirements for CEC accreditation should be tracked with the same seriousness as your ESV licence.

State Rebates and Interest-Free Loans

On top of STCs, Victorian solar and battery jobs sometimes involve state government rebate or interest-free loan schemes. These generally don't change the GST treatment of the underlying installation, but they do change cash flow timing, sometimes the rebate is paid to the installer directly rather than reducing the customer's payment, and the loan components need to be tracked so they don't get mistaken for revenue when they're actually a pass-through financing arrangement.

KPIs for Electrical Businesses Running a Solar Division

• Solar/battery margin vs standard electrical margin, tracked separately, since blended reporting hides which service line is actually more profitable
• STC income as a percentage of solar job revenue, helps forecast the impact of STC price fluctuations on margin
• CEC accreditation and CPD renewal status, a compliance KPI as much as a financial one
• Rebate/loan pass-through reconciliation, confirming government scheme funds received match what was passed to the customer or retained as revenue