Late December is when many Australian homeowners start second-guessing their solar timing. Quotes are on the table, installers are booking into the new year, and January feels close enough that waiting seems harmless. What often gets missed is that January is not just another month on the calendar. It is when Small-scale Technology Certificates, or STCs, step down again by design.
STCs are one of the main reasons solar systems cost less upfront than their sticker price suggests. They are also quietly shrinking each year as the country’s solar market matures. When January 2026 arrives, the same system on the same roof will attract fewer certificates than it does today. Nothing about the technology changes. The incentive does.
For homeowners, this matters less as a policy detail and more as a timing issue. The reduction does not show up as a line item. It shows up as a higher quote, a slightly longer payback period, or a sense that solar has become more expensive overnight.
Understanding what actually changes in January 2026 helps cut through that confusion and makes it easier to decide whether acting now or waiting makes financial sense for your situation.
Why STCs shrink every year
STCs are built into how Australia’s Small-scale Renewable Energy Scheme was designed and administered by the Clean Energy Regulator. When a solar system is installed, it is awarded STCs based on how much renewable electricity it is expected to generate over a set deeming period. That deeming period shortens every year, gradually stepping down until the scheme ends in 2030. As the deeming period gets shorter, fewer certificates are created for each new installation, even if the system itself is identical.
This gradual reaction is deliberate. The scheme was designed to provide stronger support in the early years of household solar adoption, then taper as technology costs fall and solar becomes more mainstream. In practice, it means incentives fade quietly rather than disappearing all at once.
For homeowners, the key takeaway is simple. January does not bring a new rule or surprise cut. It marks the next scheduled step in a long-planned phase-down, where each new year delivers slightly less support than the one before it.
What actually changes in January 2026
When January 2026 arrives, nothing about solar panels, inverters, or installation standards suddenly changes. The shift happens entirely on the incentive side. The number of STCs a new system is eligible for drops because the deeming period shortens by another year.
In practical terms, this means a new solar installation completed in January 2026 generates fewer certificates than the same system installed in December 2025. That reduction translates directly into a smaller upfront discount. The system has not become worse. The incentive supporting it has simply stepped down again.
This change is easy to miss because STCs are usually applied behind the scenes. Installers typically assign the certificates on the homeowner’s behalf and factor their value straight into the quote. When STCs reduce, quotes quietly rise. There is no announcement, no separate line item, and no clear explanation unless you know to look for it.
This is why January often creates the impression that solar prices have jumped overnight. In reality, it is the same market, the same equipment and the same labour costs. The difference is that the built-in discount from STCs is now smaller than it was just weeks earlier.
How the reduction shows in solar quotes
Most homeowners never handle STCs directly. By the time a solar quote lands in your inbox, the certificates have already been converted into a dollar figure and deducted from the upfront price. That convenience is helpful, but it also makes STCs’ changes easy to overlook.
After January 2026, quotes for the same size system can look noticeably higher than they did in late December. Installers have not changed their pricing model. Panels have not suddenly become more expensive. What has changed is the number of certificates available to offset the cost.
This is where confusion often sets in. Homeowners comparing quotes weeks apart may assume prices have gone up, or that one installer is less competitive than another. In reality, they may simply be looking at quotes calculated under different STC deeming years.
Since STCs are rarely itemised in detail, the reduction tends to feel abstract until it hits the bottom line. Understanding that connection makes it easier to compare quotes fairly and avoid misreading a January price increase as something more than it is.
How this affects solar and battery decisions going into 2026
The STC reduction next year will not just affect solar-only systems. It also feeds into how households think about batteries, especially as more people plan solar and storage together rather than as separate upgrades.
STCs now apply to eligible battery installations as well, which means the same timing logic applies. A system installed after January attracts fewer certificates than one installed before the new year. For households delaying solar while waiting for battery prices to fall or new incentives to arrive, there is a trade-off. Waiting can reduce future equipment costs, but it can also quietly erode the incentives available on the solar side in the meantime.
This is where planning matters. Some homeowners assume it makes sense to hold off entirely until batteries feel more affordable or more widely supported. Others install solar first, locking in the higher STC value, and add a battery later when the numbers stack up. Neither approach is universally right, but the STC reduction means timing decisions now have a clearer cost attached to them.
As the nation moves deeper into 2026. Incentives will continue to shift away from upfront solar discounts and toward grid participation, storage, and smarter energy use. Understanding how STCs fit into that transition helps homeowners avoid making decisions based on assumptions that no longer hold.
What the January Timing Means Right Now
With January only days away, the STC reduction is no longer theoretical. For many households, it will come down to whether an installation is completed before the end of December or pushed into the new year.
This distinction matters because STCs are assessed based on the installation date, not when a quote is signed. Systems installed in January 2026 will automatically attract fewer certificates, even if the decision was made weeks earlier. That can catch homeowners off guard when a final invoice does not match the number they had in mind.
In practical terms, the window to secure 2025 STC values has already narrowed. Installer schedules, network approvals, and site readiness now determine outcomes more than intent. For households still early in the decision process, January pricing is effectively the baseline they should be planning around.
Rather than creating panic, this timing clarifies expectations. The question is no longer whether STCs will reduce, but how that reduction will factor into a solar plan from here on.
STCs are designed to fade, not disappear. The January 2026 reduction is simply the next step in a long, predictable phase-down that reflects how far household solar has already come in Australia.
For homeowners, the value of understanding STCs now is not about racing a deadline. It is about recognising how incentives shape pricing, timing, and expectations as the market continues to mature. Going into 2026, informed decisions matter more than perfectly timed ones.
Energy Matters has been in the solar industry since 2005 and has helped over 40,000 Australian households in their journey to energy independence.
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