The unexpected method of calculating GST on solar system sales!

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In Australia, solar energy plays a significant role as a sustainable power source.

Understanding the application of the Goods and Services Tax (GST) to solar systems is vital for consumers. For residential users, the 10% GST is typically included in the solar system's upfront cost, simplifying pricing transparency.

Commercial customers, on the other hand, often receive quotes that exclude GST, requiring them to calculate and add the 10% GST when making a purchase.

The distinction between these practices is essential to avoid deceptive pricing by unscrupulous solar companies. Consumers should exercise caution and seek transparent pricing. In conclusion, understanding GST's application in the solar industry empowers Australian consumers to make informed decisions and leverage solar power without unexpected costs.

Australia’s Approach to Solar Energy

Solar energy is now widely used in Australia as a sustainable and clean energy source. It is crucial to comprehend how the Goods and Services Tax (GST) affects solar systems in this undertaking. The majority of products and services, including solar systems, are subject to the 10% products and Services Tax. However, whether you are a household or commercial user will determine how GST is computed. In order to make sure you understand all of the costs involved with purchasing a solar system, this distinction is essential.

GST for Residential Customers (Price including upfront costs should have GST Included)

The GST on a solar system is usually simple for Australian residential consumers. The system’s initial cost covers it. This implies that the price you see when you obtain an estimate for a solar system already includes the 10% GST. For example, if a $5,000 solar system is quoted to you, the GST is already included in this price.

GST for Commercial Customers (GST Added to the Final Cost)

Commercial clients find themselves in a more complicated scenario. For them, the solar system’s price usually includes the GST. The 10% GST is not included in the solar system quote that a commercial customer receives. Rather, when the purchase is made, the GST will be included in the system’s total cost. For instance, if a commercial customer receives an estimated $5,000, this is the pre-GST price; 10% GST must be added.

Deceptive Practices to Be Aware Of (Transparency Matters)

Avoiding dishonest practices requires an understanding of the distinctions between residential and commercial GST applications. Some less ethical solar firms might price commercial clients without including GST, then add it once contracts are signed, and the buyer has given their approval. The difference between the initial estimate and the final price may cause customers to incur unforeseen costs.

Close-up of hand knocking on the door, trying to sell a solar system
Avoid door-knocking salesmen before purchasing solar and ensure to clarify pricing (including or excluding GST)

Protecting Consumers

Customers must be cautious when comparing estimates from solar businesses and understand how GST is calculated in order to safeguard themselves from deceptive practices. To avoid any unpleasant surprises later on, a trustworthy and open solar provider would include the GST in the quote it gives to business clients. For more articles related to unethical solar pressures read our article here:

How to calculate GST on your Solar Panels

In Australia, the process of figuring out the Goods and Services Tax (GST) on solar panels is quite simple and differs based on whether the consumer is residential or commercial. The procedures to compute GST on solar panels for both categories of clients are as follows:

For Residential Customers:

Check Your Quote: When you receive a quote from a solar panel provider, the price they provide you already includes the 10% GST. The price you see is the final cost that you will pay, and there’s no additional GST to calculate.

Example: If you receive a quote for a residential solar panel system priced at $6,000, the GST is already included in this cost, so you will pay the quoted amount.

For Commercial Customers:

Check the Quote. Similar to residential customers, the initial quote you receive for the solar panel system typically does not include the GST. The GST will be added to the final cost when you make the purchase.

Calculate the GST. To calculate the GST for commercial customers, you must add 10% to the pre-GST cost provided in the quote. This means taking the original quote amount and multiplying it by 0.10 (10% expressed as a decimal) to determine the GST amount.

Example: If you receive a quote for a commercial solar panel system priced at $9,000 (pre-GST), you will calculate the GST as follows:

GST = $9,000 x 0.10 = $900

So, the GST amount to be added to the final cost is $900.


In conclusion, it is critical for Australian home and commercial consumers to understand how GST is applied to solar systems. It guarantees that you won’t be overcharged and supports you in making wise choices about solar system purchases. Furthermore, it’s critical to exercise caution when interacting with businesses that can mislead clients by using the GST computation. A reputable and trustworthy solar provider will always provide clear pricing that accounts for GST, enabling clients to make educated decisions and take advantage of solar power’s advantages without incurring additional expenses.

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