Electricity prices in Australia have been spiralling out of control with prices in all major capital cities recording an average increase of well above 30% in recent years.
Worst yet, this is set to continue for the foreseeable future (with or without a price on carbon emissions).
To combat this relentless rise in electricity prices, many Australians have decided to take matters into their own hands and install solar panels on their roof in order to generate their own free power from the sun.
Federal and state governments offer rebates to offset some of the upfront costs of getting a solar power generation system installed.
However, even after those rebates (which have been on the decline for some time), the out-of-pocket expenses still amount to thousands of dollars for most people, therefore making those systems out of reach for many Aussie families.
Another way in which state governments are trying to assist owners of solar power generation systems to recoup the cost of their investment is by offering what is known as a solar feed-in tariff
With this scheme, people are given credit, through their electricity retailer, for the electricity their systems generates but they don’t end up using. This is also known as ‘exporting’ energy to the grid.
This credit is used as an offset against the cost of electricity they ‘import’ which is the power they get from the grid to supplement the generation capacity of their system or when their system is not operational at all (e.g. at night or on a cloudy day).
The pricing model for the solar feed-in tariff scheme is Cents per Kwh (Kilowatt Hour) which is the same pricing model electricity companies use to charge us all for our usage.
This means that the higher the solar feed-in tariff is, the quicker owners of Solar power generation systems can recoup their investment.
Alternatively, they can also increase the amount of Kwh they end up exporting to the grid by either increasing the generation capacity of their system (by getting a bigger system with more solar panels for example) or reducing their own consumption, or both.
Doing this will mean there will be more Kwh that can be ‘exported’ to the grid thus increasing the overall solar feed-in tariff credit amount.
This is the second way owners of solar power generation systems can reduce their ‘payback period‘ and recoup the cost of their systems (the first one being upfront government rebates as discussed above).
A new option has emerged relatively recently which is storing electricity your system generates instead of exporting it to the grid so that you can use it later (like in the evening after you come home from work) instead of drawing power from the grid, for which you get charged.
Storing power for later use is done using advanced battery systems like the Powerwall from Tesla but as this short news clip shows, these systems are currently still very expensive and there are also other potential issues associated with them (mainly due to inconsistent government regulations).
Feed-in tariffs are not what they used to be
Solar feed-in tariffs, which are state-based, have been falling across the board and owners of Solar Power systems are constantly paid less and less for the electricity they ‘export’ to the grid, thus making their ‘payback period’ longer.
A list of the current solar feed-in tariff rates for each state can be found here.
So what is one to do? Is there a way to squeeze some extra dough from each Kwh your system exports to the grid?
Well, actually there is!
Saying that however, the solution we present for you today is only relevant if you live in either NSW, Victoria, South Australia or Southeast Queensland.
If you are anywhere else, the rest of this post is not relevant for you and you can stop reading now. Sorry about that.
Get a higher feed-in tariff without relying on the government
Still here? Great! Let’s get down to business 🙂 .
First of all, despite the relatively bleak situation feed-in tariffs are currently at, rest assured that you can still make decent money from ‘exporting’ your excess generation capacity to the grid, as this video demonstrates:
Like pretty much with anything else in life, knowledge is power and if you get savvy, you win! 🙂
Getting savvy with your feed-in tariff
Click Energy, an online electricity retailer currently operating in Victoria, NSW, SA and Southeast Queensland, has three plans that aim to maximise the solar feed-in tariff for owners of solar power generation systems.
The plans vary based on the solar feed-in tariff and the percentage of discount you get on the electricity that you end up ‘importing’ from the grid.
The higher the solar feed-in tariff (i.e. what you get for ‘exporting’ power), the lower the discount on electricity the household draws from the grid (i.e. what you pay for ‘importing’ power).
The solar feed-in tariff Click Energy pays varies for each state but in all cases, they aim to deliver a feed-in tariff that is higher than either the one mandated by the local state government (if there is one) or the highest solar feed-in tariff currently paid by an electricity retailer in that state.
Saying that, however, in order to secure the maximum solar feed-in tariff, you will need to opt for the plan that offers the lowest discount on electricity imported from the grid.
This means that if you usually export a lot of power to the grid, you should go for the highest feed-in tariff.
If you end up using most of the power your system generates and only export a little bit on occasion, you should go for the highest discount.
If you have the means to combine your solar power generation system with a power storage system (such as the Powerwall), you can reduce your need to ‘import’ power from the grid or even eliminate it altogether.
Another thing worth knowing is that the feed-in tariffs in Victoria and Queensland are net feed-in tariffs. This means they only apply to the excess electricity that you export to the grid (i.e total Kwh exported – total Kwh imported).
In New South Wales on the other hand, you are paid a gross feed-in tariff which means you get paid for each Kwh you export regardless of how many Kwh you import (and for which you are obviously charged separately by your electricity retailer).
Another benefit is that all of Click Energy’s plans come without a lock-in contract.
You can try them out and if you’re not happy or a better deal comes along at a later date (for example some other retailer offering an even higher solar feed-in tariff), you can switch straight away with no costs and no hassle.
So now all that is left for you to do is go to the Click Energy website and check what is the solar feed-in tariff they offer for your state.
Got any questions or comments.?
Just put them in the comment box below.
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