Which Electricity Retailer Offers the Best Solar Feed-in Tariff?

Solar Feed-in Tariffs in Australia: Changes Over Time

Solar feed-in tariffs are agreements that compensate solar system owners for the electricity they export to the grid. Initially, these tariffs were mandatory in every Australian state and offered generous rates. However, since our first publication in 2009, significant changes have occurred. State-mandated feed-in tariff incentives are now largely unavailable to new solar customers in most states and territories. Presently, the rates for feed-in tariffs are mostly voluntary for electricity retailers and typically range from 6 to 15 cents per kilowatt-hour (kWh), which is generally lower than the retail electricity rates charged for power purchased from the grid. Customers who registered for these tariffs before the cut-off dates may continue to receive the original rates for the duration of their agreements.

With feed-in tariffs being voluntary in many regions, solar system owners must explore their options to find a retailer that offers favorable rates.

Why Feed-in Tariffs Are Not the Sole Consideration

While everyone aims to maximize the value of their solar installation, feed-in tariff rates are just one aspect to consider. Until a few years ago, these tariffs were the primary factor influencing the economic viability of solar energy in Australia. However, the price of solar photovoltaic (PV) systems has decreased significantly, making investment in solar still worthwhile, albeit with different considerations.

In the past, when feed-in tariffs were higher than grid electricity costs, it made sense for homeowners and businesses to export as much power as possible to maximize savings. Today, the situation has reversed: to maximize the return on investment in a solar system, owners should focus on consuming as much of the electricity generated as they can, a strategy known as “solar self-consumption.” This approach reduces the amount of electricity needed from the grid (with prices ranging from 20 to 30 cents per kWh), while exporting power typically earns only about 6 to 10 cents per kWh. It is clear that the current emphasis on self-consumption is central to the business case for solar energy in Australia.

This article aims to keep solar shoppers informed about the value of their excess solar power so they can ensure they are maximizing their investment.

Beware of High Solar Feed-in Tariff “Bait”

A higher solar feed-in tariff from your electricity retailer does not necessarily equate to a better overall deal. It is crucial to evaluate each retail electricity plan in its entirety. You can use our Solar-friendly Retail Plan Comparison Tool to gain a more comprehensive understanding.

Solar Feed-in Tariff Rates by State

1. New South Wales: No mandatory minimum feed-in tariff exists; individual retailers set their rates. Some offer more than others, while some provide nothing.
2. Victoria: A new minimum feed-in tariff was established on July 1, 2017, with annual reviews affecting rates.
3. Queensland: There is currently no mandatory minimum feed-in tariff for southeastern Queensland; however, regional residents are subject to a mandatory minimum.
4. South Australia: No minimum solar feed-in rate exists; retailers voluntarily set their rates.
5. Western Australia: The minimum feed-in tariff is set by government-owned Synergy, with varying rates based on the time of day.
6. Australian Capital Territory: Individual retailers determine the value of exported solar power.
7. Northern Territory: Rates depend on your electricity retailer.
8. Tasmania: The market is open, but competition remains limited.

Frequently Asked Questions About Solar Feed-in Tariffs

• Types of Feed-in Tariffs: There are net and gross feed-in tariffs. Net tariffs pay for surplus energy fed back into the grid, while gross tariffs pay for all energy produced.
• Payment for Feed-in Tariffs: Tariffs are typically credited on your electricity bill, settled quarterly. If you export more energy than you consume, you may request cash payments from your retailer.
• Tax Implications: Generally, income from feed-in tariffs is not taxable for households; however, commercial installations may be taxable. Consult a tax professional for advice.
• GST on Feed-in Tariff Income: Households typically do not pay GST on their feed-in tariff income, while businesses usually do.

This overview provides essential information on solar feed-in tariffs across Australia, helping you make informed decisions about your solar energy investments.