Solar feed-in tariffs

This is part 5 of the FREE solar for beginners email course. If you’ve stumbled across this page and would like to sign up from the beginning, click here.

Do you remember what a feed-in tariff is?

You might recall Lucy talking about them in part 2 of our course.

If not, don’t worry, here’s a recap.

A feed-in tariff is the payment you get from your electricity retailer for any excess electricity you sell to the grid. It appears as a nice little credit on your electricity bill, like this one below from Leon who installed solar through one of our providers.

Leon’s electricity bill with a $201.60 credit from his retailer (thanks to the feed-in tariff)

Looks good, right?

But haven’t they dropped over the years, you might ask?

Well, you’re right. They have. They previously used to be around 60cents per kWh, but these days, you get around 12cents per kWh from your retailer.

Though it might seem like a big drop, this doesn’t actually affect the returns on your solar.

Why is that?

Do you remember in part 1, we talked about just how expensive solar used to be?

Well, because of this these feed-in tariffs were necessary to make solar more enticing.

But guess what? Since then,  the cost of solar has plummeted which means these large feed-in tariffs are no longer needed to make solar economically viable.

Do you remember the analysis by Choice? Even if you’re not at home during the day and export a whopping 75% of your electricity – solar still pays itself back in 6 years in Melbourne. Pretty good, right?

So, though it might seem disappointing the feed-in tariff has dropped, there’s no reason to worry.

However…

If you get solar, it’s still good practice to try and use the electricity from your solar as much as possible.

Remember, the more you use, the shorter the payback period will be.

But if you’re not at home during the day – how do you do this?

Here are three simple tricks:

  1. Do you have a dishwasher or washing machine? Most appliances such as these come with a time delay function. This means you can turn them on and get them ready in the morning, but then set them to run during the day when your solar is generating.
  2. Do you need to cool or heat your home? Well, if you use an aircon or another type of electric heating or cooling,  use a timer to set it to run a few hours before you get home from work (when the sun is shining). This means you’ll then come home to a lovely pre-cooled or pre-heated home – at a fraction of the cost.
  3. Do you use a gas hot water system or an electric storage system that runs at night? Consider upgrading to a hot water heat pump when your hot water system fails. Because they use such little power and run off electricity, you can set it run during the day when your solar is generating free electricity – allowing you to make the most of your solar and saving you money.

Make sense?

So what’s next in our course?

Well, tomorrow we discuss everything batteries… how much do they cost, do you need one, how do they work…? Stay tuned.

In the meantime, we’ve got a handy little activity you can use to make the most of your solar. Check it out.