GST Solar Australia

This is how GST is calculated on residential solar installation in Australia.

There are two parts to any home solar sale calculation.

1. The sale of the equipment and installation.

2. The purchase from you of your STCs (the rebate).


Let's look at part 1 first.

The solar panels, inverter and installation might come to $8041 ex GST
Add on 10% GST ($804) and the total sale price is $8845. Normal stuff.


So, if there were no STCs (rebates) the ATO would be expecting $804 in GST.


Now we'll look at part 2.
You, a home owner, are not registered to charge GST on items you sell.

But we are buying your STCs as an up-front discount, so the transaction is exempt from GST.


If you look at this another way. Let us say there were no STCs.
You would be paying $804 in GST, ok?
Or you were hanging onto your STCs and holding out for a better price on the market, so you are happy to pay us the full $8845 inc $804 GST for your solar and sell your STCs privately, then you would still be paying us $8845 including $804 GST. OK?


So, if we DO buy your STCs, they are exempt from GST, so you simply get their ex GST value (e.g 118STCs x $33 = $3894) taken off the price you pay..e.g. $8845 - $3894 = $4,951 and WE still have to remit $804 of that $4,951 to the ATO.


Thousands of solar companies have got this entirely wrong. Perhaps because they don't have very good accountants or perhaps because they think they can cheat the system, but the ATO always catches up, and they have to pay what they owe, plus penalties and that sends almost all of them out of business...and your warranty along with it.


If we take a solar company that gets the above example wrong then this is what they do...

They take the ex GST sale price of $8041, deduct $3894 for the STCs making $4,147 and then add on 10% GST to that.

That now makes the sale price to you $4,562  instead of $4,951.


Fantastic, they can now sell you solar $389 cheaper than us simply by getting the GST wrong.


Now we accept that many people would say "So what? Not my problem"


However, it is so ridiculously easy for the ATO to spot and they specifically target solar companies for this very reason.


The ATO will take them to the cleaners and the directors are personally liable too, so everyone loses, including both YOU and US, because that lovely ten year warranty on your install is toilet paper, and we lost your sale because the other guy was cheating.