If you have a solar system or are thinking about getting one, a feed-in tariff can give you money back on the solar power you generate. Like a small power station, any surplus power your solar system produces can be sold back into the grid at a feed-in tariff. A feed-in tariff (FiT) may also be known as a ‘buy back rate’ or ‘solar tariff’. If you’re eligible to receive a FiT it will appear on your electricity bill as a per kilowatt hour (kWh) rate.
Initially introduced as an incentive to adopt renewable energy sources, FiTs have fallen in recent years. In 2010, a FiT may have been quoted at 60 cents per kWh (depending on your location and retailer). Now in Victoria, for 2020-2021, the ‘single rate’ minimum feed-in tariff is 10.2 cents per kWh. And the ‘time-varying’ minimum feed-in tariff is between 9.1 cents and 12.5 cents per kWh. While in New South Wales, the government has set no minimum FiT – retailers set the FiT.
The FiT credit you’ll receive will depend on:
- Solar system type
- Eligibility for any government solar payments
- The amount set by your state or territory government
- Whether your retailer provides extra on top of the government payments
Feed-in tariffs and your solar system
To eligible for a feed-in tariff, you’ll need to have an ‘on-grid’ solar system. An ‘on-grid’ solar system is connected to the electricity grid. It will draw electricity from the grid when the household needs more power than their solar system generates. Plus, it will feed in electricity to the grid when the solar system generates more than the household needs. (In contrast, an ‘off-grid’ solar system is not connected to the electricity grid. All of the electricity generated by the solar system is used by the household or stored in batteries for the household’s own use.)
Signing up for a feed-in tariff
First, you’ll need to have solar panels or some other renewable generator (such as a wind turbine or air source heat pump). The size requirement for your solar system will vary from state to state.
Once your solar system is installed and signed off, contact your retailer. Retailers will require you to fill out a solar connection form and submit documents that show the system was installed by a licensed professional. Your meter may also need to be upgraded or reconfigured to measure solar exports. Finally, you’ll need to find and sign up to an electricity plan that offers feed-in tariffs.
Will I receive a feed-in tariff (FiT) if I am renting?
If you’re renting a house that has solar panels, you’ll receive the FiT for any electricity that the house exports to the grid. If you live in an apartment or townhouse, you’ll need an electricity meter separate to the rest of the complex in order to receive a FiT. As a renter, you’ll also need to discuss any FiT agreement with the property owner.
Types of feed-in tariffs (FiT)
There are two overarching types of FiT: net and gross.
Net feed-in tariff
The net feed-in tariff is the most common type of FiT in Australia. It only gives a credit on the surplus energy fed back into the electricity grid.
Gross feed-in tariff
Gross feed-in tariffs were an earlier form of FiT and are generally no longer offered by electricity retailers. These used to pay a credit for every kilowatt hour of electricity the solar system produced, regardless of how much was consumed.
Other types of feed-in tariffs:
Single rate feed-in tariffs
With a single-rate FiT, you’ll receive the same price for your solar energy regardless of when you export the electricity to the grid. These are the most traditional form of FiTs offered by retailers.
Time-varying feed-in tariffs
Time-varying FiTs pay different rates depending on the time of day the electricity is exported to the grid. These are usually broken into three time periods: peak, off-peak and shoulder.
Variable-rate solar customers in Victoria receive the highest FiT for exporting during peak demand periods (3pm-9pm weekdays) and the lowest FiT during off-peak times (10pm-7am). During the shoulder period, customers receive a higher FiT compared to off-peak, but a lower FiT than the peak. In regional Queensland there is no shoulder period, only peak and off-peak. Peak time (3pm-7pm) pays the highest FiT, while off-peak times (7pm-3pm) pay the lowest FiT.
How to maximise feed-in tariff (FiT) credits
To maximise your FiT credits, look at exporting the majority of your surplus solar power during peak times. One of the ways to do this is by using a solar battery. With a solar battery, you’ll be able store surplus solar power during the day. You can then export this surplus power during the peak period at night to receive the higher FiT. However, solar batteries can be a significant financial investment, so make sure you compare the benefits with the costs before purchasing one.
Another factor to consider is the positioning of your solar panels. By positioning your panels towards the west you’ll be able to generate the most power in the late afternoon. This might be something you could consider if you haven’t installed your solar panels yet.
What type of FiT is best?
The most suitable FiT will depend on a number of factors. For example, if you have a solar battery, a time-varying FiT might work best for you. However, if you’re not actively managing your solar usage, you might be better off with traditional single rate FiT.
Factors to consider when comparing FiTs
FiTs vary with every retailer, state and distribution network. Energy retailers may also offer a higher FiT in exchange for increased electricity rates and lower discounts. However, a higher FiT won’t always mean a better deal. It will depend on a number of factors such as electricity usage, usage rates, supply rates, discounts and contract periods.
Things to check before selecting a high feed-in tariff (FiT)
Terms and conditions
Make sure you double-check the fine print, as some retailers may require you to buy your solar panels through them
Compare the usage rate and daily supply charge, as some retailers may compensate for a high FiT with higher usage rates and supply charges
Limited time offers
If a retailer offers a high FiT, it may only last for a limited time (e.g. 6-12 months), then reduce once the promotional period ends
Consider whether the retailer provides support to help you get the most from your solar system
- Feed-in tariffs (FiTs) are also known as a ‘buy back rates’ or ‘solar tariffs’
- FiTs offer credits on solar power sold back into the electricity grid
- Homes with an ‘on grid’ solar system, or other ‘on grid’ renewable energy generator, may be eligible to receive FiT credits
- A solar battery can be used to store surplus solar power and export it during peak times at a higher FiT
- A higher FiT won’t always mean a better deal
- It’s important to consider your electricity usage, the usage rates, the supply rates, any discount and the contract period when comparing feed-in tariffs
Finding a solar feed-in tariff
As feed-in tariffs are voluntary in many states, it’s important to shop around to find a retailer that offers the best rate for your needs.
(Note: these retailer-provided solar feed-in tariffs don’t include any bonus feed-in tariff that may be provided by state or territory governments.)
NSW solar feed-in tariff comparison by retailer (cents per kWh exported)
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QLD solar feed-in tariff comparison by retailer (cents per kWh exported)
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SA solar feed-in tariff comparison by retailer (cents per kWh exported)
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ACT solar feed-in tariff comparison by retailer (cents per kWh exported)
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VIC solar feed-in tariff comparison by retailer (cents per kWh exported)
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Note: We show minimum and maximum feed-in tariffs (FiTs) as some providers offer different FiTs on different plans. Residential FiTs shown exclude GST. GST on FiTs is only paid to ABN holders.
- If you don’t have a solar system, but generate electricity using a wind turbine or other small-scale generator you may also be eligible to receive a feed-in tariff (FiT) credits.
- If you’re not eligible to receive FiT credits or have decided it’s not right for your circumstances, consider increasing your solar ‘self-consumption’.
Since FiTs have fallen there has been a shift towards ‘self-consumption’. This means, households focus on consuming the power generated by their solar system over purchasing electricity from the grid.
In most states and territories, FiTs are now in the range of 6-8 cents per kilowatt hour. This is in comparison to electricity purchased from the grid at up 30 cents per kilowatt hour. So, for every kilowatt hour of household energy used, you could be saving 20-30 cents when you consume your solar power. And given the average daily energy usage for a household can be 20 kWh, over time the savings could really add up.
Ways to maximise ‘self-consumption’
Daytime energy consumption
Aim to use electrical appliances during the day when the sun is out, e.g. washing machine, dishwasher, pool filter
If you’re not at home during the day, try using the timers on your appliances to increase your daytime energy consumption
Use cordless appliances
Cordless appliances give you the option to recharge the battery during the day when your solar system is producing energy
A solar diverter will redirect excess solar energy into your hot water tank, reducing the need to power your hot water from the grid
With a battery, you can store any excess solar energy for use later in the day
Smart home technology
By using an app or monitoring system (such as Google Home or Alexa) you can control the devices in your home to turn on during the day
Apart from feed-in tariffs and increasing self-consumption, you could also save money on any electricity or gas you use from the grid by comparing energy plans.