Familiar with ‘feed-in tariff’(FIT), ‘buy-back rate’ and solar tariff’? Maybe yes, especially if you have solar panels. But do you exactly know what these terms mean? Understanding these terms is important to get the best value from your solar.
What Is Feed-In Tariff?
Households and businesses installed with solar panels can be “off-grid” and “on-grid”. “Off-grid” when they generate the electricity they use and store power in batteries for night use or “on -grid” and still connected to the same network that non-solar households rely upon. “On-grid” draw electricity from the grid when they need more than what they generate and export electricity to the grid when they generate more than they need.
The customer receives a small rebate on their bill for every kilowatt-hour(kWh) they export. The rate paid for electricity fed back into the grid is the feed-in tariff (FIT). Most FIT in Australia are net tariffs: credited for surplus electricity fed into the grid after domestic use is subtracted. Gross FIT credit households for all the electricity generated by their panels, and charge all usage separately.
What Are Feed-In Tariff Rates?
The majority of (FIT) is funded by retailers between 6 cents/kWh and 30 cents/kWh. However, solar panels installed in some areas from 2007-2011 may be entitled to higher feed-in tariffs in excess of 40 cents/kWh.
FIT vary every retailer, state and distribution network. Energy providers offer special deals for solar customers that include a higher FIT in exchange for increased electricity rates and lower discounts. Keep in mind, a higher FIT won’t necessarily mean a better deal.
Will I Receive A Feed-In Tariff If I Am Renting?
If renting a house with solar panels, you will receive the FIT for the electricity the house exports to the grid. If you live in an apartment or townhouse, you need an electricity meter separate to the rest of the complex in order to have a FIT. Also, don’t forget to discuss the FIT agreement with the landlord.
How To Sign Up For A Feed-In Tariff?
First, you must have solar panels or some other renewable generator. Size requirement varies every state. Once installed and signed off, contact your retailer. Retailers will require you to fill out solar connection form, submit supporting documents that show that installation was done by a licensed professional. Your meter may also need to be upgraded or reconfigured to measure solar exports. Finally, sign up to a new energy contract suitable for your needs.
Know more about Feed-in tariff
Time-Varying Feed-In Tariffs
Traditional FIT are single-rate meaning you will receive the same price for solar regardless when you export to the grid. However, energy retailers in VIC and rural QLD are now required to offer what’s called a ‘time-varying feed-in tariff’ or ‘variable rate feed-in tariff’.
Variable-rate solar customers in VIC receive the highest FIT for exporting in peak demand periods (3 PM-9 PM weekdays) and the lowest FIT in off-peak times (10 PM-7 AM). During the shoulder period, customers receive a higher FIT compared to off-peak, but a lower FIT than the peak. In regional QLD there is no shoulder period only peak and off-peak. Peak time (3 PM-7 PM) pays the highest FIT, while off-peak times (7 PM-3 PM) pay the lowest FIT.
The type of FIT suitable for you depends on your usage habit. If you have a solar battery, a time-varying tariff could be the best since you can store electricity generated through the day and export it during peak times when the FIT is highest.
For solar customers who want to maximize the return of their investment, Feed-in tariffs are important. But not all the time higher FIT won’t always lower power bills. Keep in mind relevant factors your usage, electricity usage rates, supply rates, discounts, contract periods, feed-in tariffs. We can help you find the best energy plan for your needs, click here.