As Australia continues to embrace renewable energy, solar feed-in tariffs (FiTs) have started to reduce in the amount energy retailers pay for solar energy fed back into the electricity grid. Therefore, understanding how FiTs work, the rates offered, and the factors that influence them can significantly impact the financial returns on your solar investment. In this post, we’ll explore what a solar feed-in tariff is and how it affects you.
What Are Solar Feed-in Tariffs?
A solar feed-in tariff is the price an energy retailer pays for solar electricity fed back into the grid from a home solar system. Consequently, this arrangement allows solar panel owners to receive payment for the surplus electricity their systems produce. As a result, it can help offset the costs of installation and maintenance.
How Do Feed-in Tariffs Work Around Australia?
Feed-in tariffs function as a way to pay solar panel owners for the excess energy they contribute to the grid. Here’s a simplified breakdown of how they work:
- Generation: Solar panels generate electricity when exposed to sunlight.
- Consumption: The generated electricity is first used to power whatever appliances may be running the owner’s home or business.
- Export: Surplus electricity flows back into the electricity grid.
- Payment: The solar panel owner receives a payment for the surplus energy supplied to the grid, based on the feed-in tariff rate.
History of Feed-in Tariffs in Australia
South Australia introduced the solar feed-in tariff in 2008 to encourage homeowners to install solar panels. While the initial rate was relatively high, the price of solar panels in 2008 was also much higher than today’s prices. As a result, the solar feed-in rates paid across Australia have decreased in line with the falling cost of solar panel installations.
System Size Limits for Feed-in Tariffs
Each state in Australia has different limits on the size of solar systems eligible for feed-in tariffs. These limits ensure that the feed-in tariff system remains manageable and equitable. For instance, some states cap the maximum system size at 10kW for residential installations, while others allow larger systems but with different rates.
NSW Feed-in Tariffs
NSW once offered a generous feed-in tariff, legislated by the state government, which paid out 60c/kWh for all solar energy generated. This scheme ran for seven years and concluded on 31 December 2016. Since then, energy retailers in New South Wales have set the feed-in tariff rates, leading to varying payout amounts. Currently, the average payout is around 6c/kWh. For more details, you can refer to IPART’s all-day feed-in tariff factsheet.
VIC Feed-in Tariffs
Victoria provides a solar feed-in tariff with a minimum flat rate and a time-of-use rate, which reflects the different values of electricity during peak and off-peak times. In the 2025 financial year, the minimum flat rate is 3.3c/kWh, however, we’ve observed higher pricing in the marketplace. For more information, you can go to the Victorian Government’s Premium Feed-in Tariff page.
QLD Feed-in Tariffs
Queensland’s feed-in tariff is split into two areas: southeast Queensland and regional Queensland. In southeast Queensland, energy retailers do not have to pay a mandated solar feed-in tariff. The marketplace has priced solar feed-in tariffs at around six cents per hour. In regional Queensland areas, customers received a fixed feed-in tariff rate. In the 2024 financial year, the feed-in rate was 13.4 c/kWh.
SA Feed-in Tariffs
South Australia used to have a generous feed-in tariff which locked in the price at 44 c/kWh up until 2028. This scheme stopped taking new participants back in 2011. Currently, SA energy retailers do not have to pay a set price for solar energy fed back into the grid. We have noticed prices of around 7c/kWh in the marketplace.
WA Feed-in Tariffs
In Perth and the south-west region of Western Australia, there is a regulated price that Energy retailers need to pay for exported solar energy. In the financial year 2024, 10c/kWh was paid for electricity exported between 3 pm to 9 pm. At other times, 2.25c/kWh was paid.
TAS Feed in Tariffs
Tasmania has a regulated solar tariff. In the 2024 financial year, it will set to 10.869c/kWh. Solar feed-in tariff information from the Economic Regulator can be found here.
NT Feed-in Tariffs
At the time of writing, as of March 2024, NT has a regulated solar feed-in rate. The government set solar feed-in rate is 9.13c/kWh for homeowners.
ACT Feed-in Tariffs
At the time of writing, ACT energy retailer ActewAGL has a feeding tariff which is split into two rates. Homeowners are paid 12c/kWh for the first 15 kWh exported to the great each day and additional solar energy exported into the grid receives eight cents per hour. There are other retailers in ACT however they generally offer lower solar feed-in rates.
Summary
In summary, feed-in tariffs have played a crucial role in the growth of solar energy in Australia. They have evolved over time, reflecting changes in technology, market conditions, and policy goals. Understanding the specifics of these tariffs and how they vary by state can help individuals and businesses make informed decisions about solar energy investments.