How Does The Solar Feed-In Tariff Work?
Updated: Apr 24, 2019
If you consider to go solar you have probably come across the term "feed-in tariff". In order to understand the feed-in tariff, it is important to understand the way solar works. There are a few different ways you can use solar power.
Off Grid Versus Grid Connect - What's The Difference?
There is off grid, which means that you are not connected to the main power grid and you are 100% reliant on your solar system for electricity. There is also grid connect, which means that you are still able to use electricity from the grid and also electricity created by your solar system.
The benefit of this is that you don't have to completely rely on your solar system to create enough electricity for your home, you can comfortably use your solar power until the sun goes down and your solar system turns off. Then you will just switch back to using electricity from the grid.
The other benefit of grid connect is that you can sell the excess electricity created by your solar system back to your energy provider for a negotiated price. This is called a feed-in tariff.
Feeding Power Back Into The Grid
Let's say it is a beautiful day and the sun is beaming straight on your solar panels. Your solar system is creating so much power that the appliances in your house are completely covered by solar. The solar system may be creating more electricity than your house needs and there may be some electricity left over. This power will then be sent back through your electricity meter into the power grid for someone else to use.
Your meter will calculate how much you send back through it. It will then multiply that by the price that you agreed on with your retailer and credit that amount towards your power bill.
The Feed-In Tariff - Back Then And Now
About ten years ago, the feed-in tariff rate paid was extremely high with up to 66c/kWh. These tariffs were created to kick-start the solar energy industry when solar systems were much more expensive.
Since 2008, the price for solar systems has dropped significantly and the feed-in tariffs are now as low as 7c – 18c, depending on the retailer.
This is why many people assume that solar isn’t worth it anymore because the feed-in tariffs are so low. But this is way too short-sided. A lower feed-in tariff only gives you the incentive to use more of your solar energy for yourself than feeding it back into the grid.
How To Get The Best Feed-In Tariff
Every energy provider has different prices and there are over 30 different energy providers. So instead of going through the hassle of calling all of them you can just ask one of our solar specialists who has the best current energy prices and they will point you in the right direction.
If you want to get an accurate quote on how much solar will save you and receive updated information on the best current feed-in tariff, leave us your details and one of our experienced solar consultants will get in touch with you.
You might already have heard about the solar rebate. Don’t confuse the rebate with the feed-in tariff because they are two totally different things. If you want to learn more about the solar rebate, click here.