Australia, a sun-drenched nation, is a prime location for harnessing solar energy. With increasing awareness of climate change and rising electricity costs, many Australians are turning to solar power as a sustainable and cost-effective solution. One of the most significant incentives for going solar is the feed-in tariff (FiT).
What are feed-in tariffs?
Feed-in tariffs are financial incentives governments or electricity retailers offer to encourage the uptake of renewable energy sources, such as solar power. When a homeowner generates more solar energy than they consume, the excess electricity is fed back into the grid. In return, the homeowner receives payment through a feed-in tariff, typically measured in cents per kilowatt-hour (c/kWh). Are you looking to save money on your electricity bills and reduce your carbon footprint? Solar energy is the perfect solution! Energy Matters is Australia’s best solar power provider via its extensive partnership network of leading installers.
How do feed-in tariffs work in Australia?
The specific terms and conditions of feed-in tariffs can vary across different states and territories in Australia. However, the general process involves the following steps:
- Solar panel installation: Homeowners install solar panels on rooftops to harness solar energy.
- Excess energy generation: When the solar panels generate more electricity than the household consumes, the excess power is exported to the grid.
- Metering: Your electricity meter is upgraded to a smart meter that can accurately measure the amount of electricity you generate and consume.
- Feed-in tariff payment: The electricity retailer calculates the electricity exported to the grid and pays the homeowner based on the prevailing feed-in tariff rate.
Tired of overpaying for energy? Discover your best energy deal with Energy Matters. You can quickly compare top offers in your area and find the best deal for your energy needs. Our advanced tool draws data from a trusted network of retailers, so you can easily evaluate options and choose a plan that gives you more power and better savings on electricity and gas bills. Don’t settle for less—switch to a plan that suits your budget and goals with Energy Matters today!
Types of feed-in tariffs in Australia
Feed-in tariffs in Australia come in two main forms: flat-rate and time-varying. Understanding these two types can help you select the right energy plan for your solar energy system.
1. Flat-rate feed-in tariffs
A flat-rate feed-in tariff offers a consistent rate per kWh of exported solar energy, regardless of the time of day. This straightforward option suits households with stable solar production and limited ability to shift energy use based on time-of-day pricing.
2. Time-varying feed-in tariffs
With time-varying feed-in tariffs, the rate you earn for exporting solar energy fluctuates depending on the time of day, often reflecting peak demand hours. Rates may be higher in the afternoon and early evening when demand is high, allowing those with larger solar systems or battery storage to maximise earnings by exporting during these hours.
How much can you earn from feed-in tariffs?
The earnings from feed-in tariffs depend on several factors, including:
- The size of your solar system: Larger systems can generate more surplus energy, increasing export potential.
- Your energy consumption habits: Households that consume less energy during the day (e.g., if nobody is home) can export more power to the grid.
- Feed-in tariff rates: Rates vary significantly across Australia, with average rates ranging from 5 to 20 cents per kWh, depending on your location and energy retailer.
To calculate potential earnings, multiply your expected surplus energy by the FIT rate. For instance, if you export 500 kWh per month at 10 cents per kWh, you could earn around $50. Check our page for Solar Feed-in Tariff Comparison: Best Tariffs by State and Territory.
Factors affecting feed-in tariffs in Australia
Several elements influence the feed-in tariffs you can access, including:
State policies: Feed-in tariff rates and policies differ among Australian states. For instance, states like Victoria have a minimum feed-in tariff set annually by the Essential Services Commission, which provides a baseline rate that retailers must meet or exceed. Check our page for Solar Feed In Tariff Victoria.
Energy retailers: Energy retailers set feed-in tariff rates within each state’s guidelines. Comparing different energy plans is essential, as some providers offer higher tariffs, particularly if you have a high-capacity solar system.
Solar system size: The size of your solar panel system impacts your potential earnings. Larger systems can export more energy, but some states or retailers may offer lower rates for systems above a certain capacity, often above 10 kW.
Government policies: Changes in government policies and regulations can affect feed-in tariff rates.
Benefits of feed-in tariffs in Australia
Feed-in tariffs offer several advantages, making them valuable to your solar power investment strategy. Here are the main benefits:
Reduced electricity bills: Homeowners can substantially reduce their monthly electricity bills by utilising solar energy to meet a significant portion of their energy needs.
Passive income stream: Feed-in tariffs provide an opportunity to earn passive income by selling solar energy to the grid. This can offset electricity bills, helping to reduce household expenses over time.
Faster Return on Investment (ROI): By generating revenue from surplus energy, you can shorten the payback period for your solar panel system. FiT payments contribute quicker ROI, making solar a more attractive long-term investment.
Contribution to renewable energy goals: Exporting solar energy benefits you financially and contributes to Australia’s renewable energy goals. By sending clean energy to the grid, you’re helping reduce the country’s carbon footprint.
Increased property value: Installing solar panels can enhance a property’s value, as potential buyers may be attracted to the energy savings and environmental benefits.
Maximising your earnings from feed-in tariffs
To make the most of feed-in tariffs, consider these strategies:
Efficient energy consumption: Implement energy-efficient practices, such as using energy-saving appliances and adjusting thermostat settings, to reduce energy consumption and increase the amount of electricity available for export.
Understand your retailer’s policies: Familiarize yourself with your retailer’s feed-in tariff policies and any additional fees or charges that may apply.
Optimise energy usage: Using energy-efficient appliances or scheduling high-demand activities (e.g., laundry, dishwasher) during the day can help maximise the power sent back to the grid, increasing your FiT earnings.
Time-of-Use Tariffs: Some electricity retailers offer time-of-use tariffs, where electricity prices vary depending on the time of day. By understanding these pricing structures, homeowners can optimise their energy consumption and maximise their earnings from feed-in tariffs.
Regular system maintenance: Regular maintenance of solar panels can ensure optimal performance and maximise energy output.
Choose a reputable solar installer: A qualified installer can design and install a solar system optimised for your specific needs and local conditions.
Consider solar battery storage: Solar battery storage systems allow you to store surplus energy during peak or low solar production. This allows you to use time-varying tariffs and sell solar energy at higher rates. While batteries represent an additional upfront cost, they can boost the profitability of your solar investment over time.
Use Energy Matters’ Solar and Battery Calculator to estimate your potential savings and find trusted local installers in your area to receive obligation-free solar quotes.
Solar energy rebates and incentives in Australia
In addition to feed-in tariffs, Australia offers various solar energy rebates and incentives that can further enhance the financial benefits of solar power. Rebates help reduce the cost of installing solar panels, while some incentives target specific regions or types of systems.
1. Small-scale Technology Certificates (STCs)
The federal government’s Small-scale Renewable Energy Scheme (SRES) provides Small-scale Technology Certificates (STCs) to solar system owners. These certificates reduce installation costs, acting as a rebate that encourages solar adoption.
2. State-based rebates and incentives
Some Australian states, like Victoria, offer additional solar rebates or loans for residential and business solar installations. These incentives can reduce initial expenses, making it easier to invest in larger or higher-quality systems.
3. Solar battery rebates
A few states, including South Australia, provide specific rebates for solar battery storage, which can further enhance the benefits of your feed-in tariff plan. By storing and strategically exporting power, batteries can enable you to take full advantage of time-varying FIT rates. Embrace the energy efficiency revolution by upgrading your solar systems and adding a battery, solar inverters + more with Energy Matters.
Is a feed-in tariff right for you?
Whether a feed-in tariff is worth pursuing depends on your household’s energy needs, solar system size, and available state-based incentives. Homeowners who generate surplus energy and live in states with favourable FiT rates may find these tariffs highly beneficial. However, those with minimal excess energy may benefit more from solar energy rebates and self-consumption strategies.
Ready to take the next step?
Selling solar energy back to the grid offsets your costs and contributes to a sustainable national energy mix. Now is the time to explore how these incentives can benefit you.
Contact Energy Matters today to maximise your solar potential and start earning from your solar investment. Our team of solar experts can help you get up to 3 FREE solar quotes from pre-qualified and vetted solar firms in your area.
