Not so long ago, installing a rooftop solar system was largely motivated by the feed-in tariffs (or buy-back rate) you’d get in return.
A feed-in tariff (FiT) is the amount you’re paid per kilowatt hour (kWh) for solar electricity exported from your rooftop solar system back into the grid.
Why have solar feed-in tariffs reduced over time?
The purpose of high FiTs was to encourage the take-up of solar energy in its early days and help make the costs of installing solar panels more palatable, as the new technology was quite expensive back then.
As the cost of purchasing and installing solar PV systems has decreased over the past decade, and the amount of excess energy going back into the grid has increased, wholesale and consumption prices have gone down. As a result, the excess energy produced during the day is not worth as much as it has been in the past. The reality is we won’t see such high standard retailer FiTs again.
So, does solar still stack up as a good choice?
Just because solar feed-in tariffs aren’t as high as they used to be doesn’t make solar power a poor investment. In fact, it’s quite the reverse.
With the decreasing cost of installing solar power, and electricity costs remaining steady, installing solar gives you the opportunity to take control of your energy bills by using as much as you can of the electricity you generate. This means you’re reducing the amount of electricity you’re drawing from the grid and therefore reducing your electricity usage costs.
Plus, you could save further on your electricity usage by installing a battery and storing the electricity you don’t use during the day for usage in the evenings.
Here’s an example of the financial benefits of using the energy you generate.* Bear in mind, when the sun is out, your electricity use won’t be enough to absorb all the solar output – so there’ll always be excess energy to export.
*Based on 6.6 kW solar PV system, with assumed generation of 9,395 kWh/year in NSW, 8,672 kWh/year in VIC, 10,359 kWh/year in ACT, 10,118 kWh/year in QLD and 10,118 kWh/year in SA. 30% of PV generation assumed to be self-consumed, 70% exported back to grid. Total of site usage assumed 7,500 kWh/year. Usage and supply charge based on EnergyAustralia’s undiscounted Total Plan rates (February 2022) (incl. GST). FiT export based on EnergyAustralia’s standard FiT rate (February 2022).
1 Based on 1st year calculation, no degradation in solar system
With a rooftop solar system, you’re also helping the environment by generating your own energy using the sun’s rays - renewable energy such as solar is a very cool (or hot) investment that involves no burning of fuel and no emissions from energy production.
- Make sure you install a rooftop solar system that suits your home’s size and your energy needs
- Install a battery to get even more out of your rooftop solar system
- Look for an electricity plan offering a balance of low usage tariffs and low daily charges rather than trying to source the highest feed-in tariff
Clearly, the sun hasn’t set on the benefits of solar energy
By looking at your solar system as a way to reduce your electricity costs for your home or business by using your own generated energy, it’s still a very worthwhile long-term investment.
EnergyAustralia has a team of solar and battery experts who can recommend the right solution to best suit your home or business needs. Just call 133 466.
Note that the benefits outlined here are general in nature and you should make your own assessment if solar is right for you based on your individual circumstances.