Understanding feed-in tariffs in Australia
Feed-in tariffs (FiTs) are rates that electricity retailers pay to Australian homeowners and businesses for their excess solar energy, which is then fed back into the grid. If your solar system produces surplus energy, this can be sold back, generating financial returns.
Why Feed-in Tariffs Matter
- Financial Gains: Earn from your solar setup! By feeding excess energy into the grid, you can substantially decrease your electricity expenses, or even gain credits.
- Promotion of Green Energy: Feed-in tariffs serve as an incentive for Australians to adopt solar, fuelling the growth of renewable energy.
- Stabilising the Grid: As more entities produce solar power and contribute excess to the grid, our electricity sources diversify, promoting a resilient and sustainable grid.
Types of Feed-in Tariffs in Australia:
Australia has primarily two types of feed-in tariffs:
- Net Feed-in Tariff: This is the most common type. It pays you for the surplus energy that your solar system generates and feeds back into the grid after your own usage has been accounted for.
- Gross Feed-in Tariff: This pays for all the energy that your solar panels produce, irrespective of how much you use. However, this type is less common and is not available in all states.
How are Feed-In Tariff Rates Determined?
Feed-in tariff rates can vary based on several factors including:
- The state or territory you’re in. Each state has its own regulations and rates.
- Your electricity retailer and the agreement you have with them.
- The size and capacity of your solar system.
With most feed-in tariff rates set by the energy retailer and states which set the tariff by law constantly changing it’s important you don’t rely solely on a feed-in tariff when deciding to get solar.
What are the feed-in tariffs in each state of Australia and how do they work?
Feed-in tariffs in Australia vary by state, both in terms of how they operate and how much they pay.
Let’s take a closer look at the specifics for each state:
- Queensland (QLD): Primarily net Feed-in tariffs, with rates, often set by retailers, hovering between 6 to 16 cents per kWh.
- New South Wales (NSW): Uses a net Feed-in tariff, with rates (5 to 20 cents per kWh) set by individual electricity retailers within a government-recommended benchmark.
- Victoria (VIC): Adopts a net Feed-in tariff, with a unique time-varying tariff. Rates are set by the Essential Services Commission, with the minimum at about 10 cents per kWh.
- South Australia (SA): Like NSW, SA has a retailer-driven Feed-in tariff system with rates typically ranging from 5 to 16 cents per kWh.
- Western Australia (WA): WA has different systems for the South West Interconnected System (main grid) and off-grid areas. Rates and systems can vary widely.
- Tasmania (TAS): Tasmania’s regulator determines the Feed-in tariff rate, which is then offered by the state-owned retailer.
- Australian Capital Territory (ACT): ACT has transitioned from a gross Feed-in tariff to a net Feed-in tariff system, with rates determined by individual retailers.
- Northern Territory (NT): The NT government sets a uniform Feed-in tariff rate for all grid-connected solar systems.
It’s essential for homeowners and businesses in Australia to be aware of the specific Feed-in tariff structure in their state or territory. Always consult with your retailer or local regulations for the most current rates and structures.
Tips to maximise solar returns using the feed-in tariff
Maximising the benefits of your solar installation using feed-in tariffs is a smart move for Australian homeowners and businesses. Here are some tips tailored to help you get the most out of your solar system:
- Understand Your Consumption Patterns: Monitor your energy consumption habits. Understand when you’re using the most electricity and try to shift non-essential usage to non-peak sunlight hours. This ensures that during peak sunlight, most of the generated energy is sent back to the grid, capitalising on feed-in tariffs.
- Invest in a Quality Solar System: Opt for high-quality panels and inverters that have a proven track record. Brands like Sungrow, Fronius, TESLA, and CanadianSolar, which Arkana Energy provides, are renowned for their efficiency and durability.
- Optimise Solar Panel Placement: Ensure your panels are positioned to capture the maximum amount of sunlight throughout the day. Arkana Energy tailors solutions considering the position of the roof, which plays a pivotal role in energy generation.
- Regular Maintenance: Clean your solar panels regularly to remove dust, debris, or bird droppings, which can reduce their efficiency. Additionally, have your system checked annually by professionals to ensure everything is in optimal working condition.
- Stay Informed About Feed-in tariff Rates: Be aware of the feed-in tariff rates offered by your electricity retailer and see if they are competitive. Rates can vary between retailers, so periodically shop around to ensure you’re getting the best deal.
- Consider Battery Storage: With a battery storage system, you can store excess energy generated during the day and use it during the evening or cloudy days. This means that during peak Feed-in tariff rates, you can feed more energy back to the grid, maximising returns.
- Use Smart Appliances and Systems: Smart devices can be scheduled to operate during times when you’re generating the most solar energy. This can help reduce the amount of electricity you consume from the grid.
- Stay Updated with Export Limits: Be aware of any export limits set by your network service provider. This ensures you’re not generating more electricity than you can export, which might otherwise go to waste.
- Engage with Your Community: Connect with local solar communities or online forums. They can be a goldmine of practical tips and real-life experiences of leveraging feed-in tariffs.
- Plan for Future Energy Needs: If you’re considering purchasing an electric vehicle or other high-energy appliances in the future, plan your solar system accordingly. It might be worth expanding your system now to cater to future needs, especially if feed-in tariff rates are attractive.
Feed-in tariffs amplify the benefits of solar by providing financial rewards for excess energy produced, making the switch to solar even more worthwhile for Australian homeowners and businesses.
Be sure to monitor all available feed-in tariffs from energy retailers in your state – and don’t be afraid to switch retailers to get a better deal which suits your energy consumption and solar system better.