Electricity plans for solar panel owners

Solar systems aren't cheap, so it's important to get as much value out of them as possible. This means pairing up your panels with a power plan that will give you the most bang for your buck, and let you pay back your system sooner rather than later.

In the past, this would have meant securing high solar feed-in tariffs, but times have changed. We explore how feed-in tariffs work and why you might be better off using up that excess energy yourself, rather than selling it on.

What is a feed-in tariff?

A feed-in tariff (FiT) is a rebate offered to people who produce their own renewable energy at home and feed it back into the power grid.

You could be eligible for this rebate if your house or business has any small renewable energy generators like wind turbines or solar panels.

When do you get paid?

The rebates apply when you feed excess power into the grid, measured in kilowatt-hours (kWh) – not the total power you produce. For example, if you produce 20kWh and use 15, you will only receive the FiT for the 5kWh left over.

Why feed-in tariffs are important for solar owners

Solar tariffs matter to customers with excess solar power, since they dictate how much you'll actually get back for each kWh exported. That said, they're much less important than they used to be 10 years ago when FiTs were up around 60c/kWh. These days, most states have no set minimum, and you're looking at around 10-20c/kWh at best.

The exact value of a FiT is most important for people with oversized solar systems that export much more power than they use, since they could see a considerable return

Beware higher usage rates

Feed-in tariffs can be tricky. Many providers will use high FiT to attract solar customers, but pair them with a plan that has much higher usage rates for grid electricity.

With one of these plans, a solar customer could easily end up paying more on usage than they save with solar exports. It's better to get a competitive plan with low usage rates than to zero in on high FiTs in most cases.

Are feed-in tariffs the be all, end all?

Not anymore, no. Instead, the real benefits from a solar system come from self-consumption or using as much of the power you generate yourself as possible.

Here's why:

• Initially, FiTs way higher than usage costs incentivised solar owners to export as much of their power as possible.
• Feed-in tariffs have tumbled with the declining cost of installing solar systems, even as usage rates continue to climb.
• Exporting your power at 12c/kWh no longer makes sense when you could instead use it yourself, saving you the 20-30c/kWh you'd pay to buy that energy from the grid.

To benefit the most from self-consumption, try to adjust your power usage habits to line up with the time your solar panels are generating (daytime). Alternatively, you could invest in solar batteries to save the power for use later, but these will extend the time it takes for your solar system to pay for itself.

Solar offers from major providers

Here are the feed-in tariffs available from major energy retailers, grouped by state. FiT schemes are limited, since all states have an upper limit on the size of the system they can accommodate on their distribution network. This is typically around 10kW for single-phase or 30kW for three-phase power.

• VIC
• NSW
• QLD
• SA
• WA
• TAS
• ACT
• NT

Source: Solar Calculator. Solar Feed-in Tariffs may vary based on your location and are subject to change over time. Make sure you check with your retailer.

State by state tariff rules

The following table outlines the FiT schemes in place in Australia, which are mostly comparable between states. The only exception to the "net" power schemes available everywhere else is the city of Darwin in the NT, which uses a "gross" power tariff scheme instead.

What are wholesale electricity rates?

Wholesale electricity prices or "spot" prices are how much it costs to buy energy directly from the distribution network. They are updated every 30 minutes to reflect supply and demand.

Normally, energy retailers buy power from the network at this fluctuating price and then sell it on to you at a flat usage rate defined by your plan.

Some providers, like Amber Electric, give customers direct access to wholesale prices, paired with an app so you can stay on top of where it's at. They also give you wholesale feed-in tariffs, updated just as often.

Can renters benefit from feed-in tariffs?

The answer to this is yes — unless their lease states otherwise. When you are renting a property with its own solar panels, your power bills will benefit from the FiT in the same way as if you owned the property.

If you're living in a townhouse or other property that's part of a complex, you'll need to have your own power meter installed so that your usage and power fed back into the grid can be separated from the other residents. Some landlords will offer leases that specify tenants can't benefit from feed-in tariffs, so read your rental agreement carefully to see if this is the case.

What is a premium solar feed-in tariff?

Premium feed-in tariffs were offered to some people installing solar energy between the years of 2007 and 2011. Premium rates are much higher than current FiT rates, often up around 40c/kWh, but they can no longer be obtained.

The only people with access to these higher rates are those who signed up with these rates when they were offered, still use the house they installed the panels in as their primary residence and have not upgraded their solar array since. You may also be able to access premium rates if you move into a residence where premium rates have been preserved.

Time varying feed-in tariffs

Some states allow for time-varying FiT, which will change depending on whether you're feeding power in at peak or off-peak periods. Check if you have access to one of these and can benefit from feeding power into the grid at times of peak usage (usually weekdays between 7am and 7pm).