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How Do Solar Feed In Tariffs Work?

How Do Solar Feed In Tariffs Work?

Feed-in tariffs are a fantastic way that solar panel users can save even more money on their electric bills, and are an alternative to capturing and storing additional energy with a battery. They are an initiative that has been adopted by many countries around the world as a way to encourage the uptake of solar panels.

What are feed-in tariffs?

A feed-in Tariff is a financial incentive that comes from utility companies, paid to solar panel users when those panels produce more energy than the household is using. The excess energy produced is then fed back into the grid, essentially being “bought” by your utility company.

Feed-in Tariffs are most common for household solar panel systems, but they can also be applied to wind, hydro, or biomass energy. In every case, the function and purpose are essentially the same.

How Do Solar Feed In Tariffs Work

The specific rates that you will be paid per kWh depend greatly on your utility provider and the state you live in. All of this information is available through research, so it’s a good idea to research which energy provider can give you the best deal in your area before installation.

The purpose of feed-in Tariffs is to encourage the use of solar, and other renewable energy sources in a bid to reduce climate change and emissions. As a user of solar panels, it has created a fantastic opportunity to reduce your energy bill, while also reducing your footprint on the earth.

In Australia, feed-in Tariffs only apply to residential users of solar panels and does not apply to commercial users. You might also hear feed-in Tariffs referred to as solar bonus schemes or solar buyback rates. It all refers to the same thing.

How do solar feed-in tariffs work?

When you install solar panels, your home becomes a little power station. It generally will produce large amounts of energy during the day, and then cease production at nighttime. Most homes, however, are using very little energy during the daytime, with lights, appliances, and heating getting the most use when everyone is home in the evening. Your solar panel system, without a powerful battery, cannot store the excess energy being produced during the day.

So how do solar feed-in tariffs work? The additional energy that your solar panel system produces can, under a feed-in Tariff, be sold back into the grid. This means that your neighbours and your community get to benefit from the clean energy your home produces, and you get to benefit from a reduction in your energy bill.

What is the best electricity company for feed-in tariff?

The rates for feed-in Tariffs vary by state and company, so this information will be broad and general. It may give you a starting point for doing your research and figuring out the highest solar feed-in tariff in your area.

When considering your options for electricity providers solar feed-in tariff, rates are likely to be a big consideration for more than 20% of Australian homes with solar panel systems. There are some big players nationwide for great feed-in rates, including Energy Australia, AGL, and Origin Energy, but that is certainly not where your search should end.

Jacana energy, for example, provides the most competitive feed-in Tariff rates in the NT. Jacana is a much smaller energy company but offers competitive rates nationwide, as do many other smaller energy providers.

As an aggregate, the highest rates nationwide are offered by Origin Energy, under their Solar Boost Plus plan. It’s most competitive for those living in New South Wales and Victoria and pays up to 25 cents per kWh.

The other thing to consider when considering rates is the difference between your earning potential during peak vs. non-peak hours. Not every provider makes this distinction, but it’s an important thing to look out for because a drop in rates during non-peak hours can significantly cut your saving potential.

What Are Feed In Tariffs

Can I claim feed-in tariffs forever?

Unfortunately, feed-in Tariffs are a somewhat limited time offer. They are currently scheduled to end on December 31st, 2030. Feed-in Tariffs are not a government initiative, but instead something that is offered by energy companies directly. Because of the enormous success of feed-in Tariffs, this date will likely be extended.

Feed-in Tariffs are also beneficial for energy companies, which is another reason they are likely to not want to get rid of them. The company is buying electricity from you at a wholesale price and then selling it back at retail price. This means they are making a profit, even if it is a smaller one.

Energy companies also don’t need to burn coal or spend the outlay to create new power sources when they are getting power directly from people’s homes. It helps them keep costs down, as well as helping you do the same, which is another reason they may be extended past the currently set end date.

Who pays your feed-in tariff?

How do solar feed-in tariffs work in terms of payment? Your feed-in tariff is paid for by your energy provider directly. The government has no involvement in feed-in tariffs, other than paying the rebate. Different energy providers have different terms and conditions, but in general, feed-in tariffs are direct trades between you and your utility company.

Companies will generally pay higher rates during peak hours, and lower rates during off-peak hours. This is because the energy that you’re producing will be more valuable during the hours when people are using power the most. This may cause fluctuations in the amount you can get paid.

The amount that feed-in Tariffs will pay can also fluctuate depending on the cost of electricity on the main grid. If and when energy companies adjust their feed-in Tariff rates, they are required to communicate that to their customers, so changes will never happen without your knowledge.

What is the eligibility criteria for feed-in Tariffs?

There are a few criteria that you need to meet to qualify for feed-in Tariffs, the first and most significant of which is that only private homes are eligible. Business locations currently do not qualify.

The second important criterion is that your system needs to be connected to the power grid. If your power system operates entirely off-the-grid, then there is no way for the power to be fed back into the system and be redirected.

The final significant criterion is that your solar panel system needs to meet Australian safety standards. So long as you have gone through an accredited solar installer, you will meet this criterion without a problem.

Depending on which energy company you are with, you may also face restrictions around using single-phase or three-phase connectors, depending on the capacity of your system. The rules are not consistent across providers, however.

Are feed-in Tariffs the same as solar rebates?

Solar rebates are another initiative designed to encourage the uptake of residential and small business solar panel users. A solar rebate is a discount that is paid upfront to help reduce the cost of installing a solar panel system.

The solar rebate initiative is a government initiative, meaning that your rebate comes directly from the government. The amount you can get varies from state to state, but it is another fantastic initiative to look into to help reduce the initial cost of installing a solar panel system.

Solar Power Feed In Tariff Contract

What is the application process for feed-in Tariffs?

Before applying for feed-in Tariffs, you will need to have your solar panel system installed and operational. You will then apply to your utility company. Have a look at your chosen energy company’s website or get in touch with them for an application form that you can easily fill out and submit.

If your solar panel system is deemed to meet all of the criteria that we discussed above, then you will enter into a contract with your energy company. The contract generally will remain valid as long as you stay with the same energy supplier, and in the same house.

Once your contract has begun, you will be unable to make any changes to your solar panel system without these changes potentially impacting your contract.

How will battery storage affect my feed-in tariff rates?

Battery storage is another way to make the most of the excess power your solar panels produce. Instead of feeding that power back into the grid, you can store the power yourself for use when the sun isn’t shining, or when you have particularly high electricity needs.

In summary

Once again, rules vary significantly from state to state. In Victoria, Tasmania, the Northern Territory and Western Australia, most types of batteries won’t impact your ability to take advantage of feed-in Tariffs. In the ACT and SA, you cannot use them in conjunction. The one state where this rule is not specified and varies from provider to provider.