Subsidies - STCs, LGCs, VEECs, ESCs, PRCs, etc

• STCs
  • Updating default STC price and related options
  • Quoting on jobs that will be installed in the following year
  • Adjusting the STC value of individual quotes
  • Set custom kW value for STCs
  • GST on STCs for Commercial quotes
  • Hot water heat pump STCs
• LGCs
• STCs and LGCs combined
• Remove the STCs line on quotes that don’t have solar
• VEECs offered as a payment in year 2
• VEECs, ESCs, PRCs and other rebates / subsidies offered as a point of sale discount
  • Method 1 (Quote total GST not affected)
  • Method 2 (Quote total GST is affected) - not usually recommended

STCs

STCs are automatically calculated for quotes <100kW in Australia. The STC zone is determined by the site postcode, and the STC default value can be set in your Business Settings, and adjusted for individual quotes in the ‘Tax & Rebates’ tab.

Updating default STC price and related options

You can update your default STC price in Admin > My Business > Quote Preferences > Incentives

Quoting on jobs that will be installed in the following year

You can change the deeming years to adjust the number of STC certificates issued if the installation is planned for the next year. Towards the end of the year, when you begin quoting for jobs that won’t be installed until the following year, you can reduce the STC deeming years automatically by selecting this option in your Business Settings. This will automatically be cancelled on Jan 1.

Adjusting the STC value of individual quotes

You can adjust the STC deeming years and value for an individual quote by going to Pricing > Tax and Rebates

Set custom kW value for STCs

By default, the PV kW value used for calculating the number of RECs is based on the kW total of the new panels in the system design. However, you do have the option to check this box if you want to override the solar PV kW size on the design page to set a fixed value for calculation of the number of STC certificates.

GST on STCs for Commercial quotes

For Commercial quotes (sold to customers who are registered for GST), the GST on STCs is normally listed as a point-of-sale discount on the quote, but it’s not part of the GST for that quote - it’s subject to a separate invoice. There is an option in Admin > My Business > Quote Preferences > Incentives, to “Apply GST on credit for commercial quotes from Australia by default”, and you can turn it off if you wish.

Hot water heat pump STCs

You can create a Custom inventory item for STCs on heat pumps. Set the Category as Subsidy, and this will give you control over how the GST is applied. Set the price at the value of 1 x STC, and then when creating a quote, adjust the quantity from the edit quote tab of the Pricing page.

Refer https://solarplus.atlassian.net/wiki/spaces/SPHC/pages/1354661901/Managing+Inventory+Pricing#Create-custom-items for help with creating custom inventory items

LGCs

Systems above 100kW may be eligible for Large-scale Generation Certificates, which are paid after the year in which generation was produced. They are not a point of sale discount. To apply to a quote:

1. Make sure you have selected the quote type as “Commercial” on the contact page. This is necessary for the LGC info to populate in the proposal.

2. From the Pricing page, go to the Tax and Rebates tab

3. De-select ‘Eligible for STCs’ and select ‘Eligible for LGCs’

4. The LGC Regression Rate is the rate at which you expect the LGC price to decrease annually. Enter your chosen LGC Regression Rate as a percentage. Eg if you expect the price to decrease by 10% each year, enter 10.

5. Enter the LGC (REC) Value in dollars.

6. Save

This information informs the cash-flow table in the commercial proposal. The LGC rebate is displayed in the Year to Year cashflow chart of the “commercial detail” proposal PDF templates:

The forecast financial return from LGCs is based on: estimated solar MWh/year (derated for module degradation) multiplied by the LGC certificate price and the price regression rate, and sales tax applied.

So, the LGC value for year X = (LGC price per certificate) * (energy produced in year X) * ((1 - regression rate)^(X-1))

STCs and LGCs combined

While STCs only apply on systems <100kW, it is common to combine a 99kW system with another system and present them in the same proposal so that the client can take into consideration both the STC point of sale discount on the first 99kW, and the LGC income on the additional system. This is done in SolarPlus on the Pricing > Tax and Rebates page as follows:

1. Select 'Eligible for STCs'
2. Select 'Eligible for LGCs'
3. Select 'Apply GST on STCs'

• The STCs will be shown on the quote as a point of sale discount

• The LGCs will be shown as income on the cash flow table.

• Both are taken into consideration when calculating the return on investment.

You can explain this to the customer in the Quote Intro, perhaps using this text:

This proposal includes the following subsidies:

 - a point of sale discount for the STCs that is reflected on the quote price

 - annual LGC payments that are reflected on the cashflow table and factored into the  Return on Investment calculations

Remove the STCs line on quotes that don’t have solar

For quotes that don’t include solar panels, you can remove the line on the quote that relates to STCs/LGCs. Go to Pricing > Tax and Rebates and de-select ‘Eligible for STCs’

VEECs offered as a payment in year 2

You can apply VEECs to the cashflow analysis and RoI calculations by

• go to the Financials tab

• enter reinvestment for Year 2 and enter the VEEC value as a negative

• on the Edit Quote page, you can include a line referring to the VEECs payment in the quote intro, or grouped items description

You can refer to this in the Quote intro by adding text along the lines of:

This proposal includes a VEECs payment in year 2 that is reflected in the cashflow table and factored into the Return on Investment calculations

VEECs, ESCs, PRCs and other rebates / subsidies offered as a point of sale discount

You can include virtually any rebate or subsidy as a point of sale discount on a quote, including VEECs, ESC, PRCs (Peak Reduction Certificates) (BESS1 and BESS2). You can even apply multiple subsidies to the same quote.

Method 1 (Quote total GST not affected)

1. Create a custom inventory item. Go to More Settings > Inventory and click + Create Custom Item

2. Select Category = Subsidy and tick Subtract from Total Payable then click Save

3. Add Pricing option and enter the unit price. Leave markup at 0 and Unit of Measure as per item. Click Save.

4. To add to a quote, open the quote and go to the Pricing page. In the Add inventory item to quote section, search for VEECs. Then adjust the quantity required for that quote.

Method 2 (Quote total GST is affected) - not usually recommended

The GST on a rebate is usually subject to a separate invoice between the installer and the government or the agency handling the rebate. Check with your accountant whether this is the case.

1. Create a custom inventory item. Go to More Settings > Inventory and click + Create Custom Item

2. Select the relevant Category and Create/Save

3. Add a Pricing option with a negative price. Leave markup at 0 and Unit of Measure as per item. Click Save.

4. To add to a quote, open the quote and go to the Pricing page. In the Add inventory item to quote section, search for the item. Then adjust the quantity required for that quote.