The massive increase in the number of solar systems installed over the last 2 years has been due mainly to the introduction of the Federal Government’s Solar Credits Scheme. On top of this, Feed in Tariffs in each state pay you for the excess power your system produces.
Solar Credits Scheme (Federally funded)
- You receive a certain number of Small Technology Certificates (STC’s) depending on the size of the system you install and which region of Australia you live in.
- Ranges in value from $1,200 for a 1.5kW system up to $10,000 for a 30 kW system.
- STCs were formally known as Renewable Energy Certificates (RECs)
- The installer will claim these on your behalf and offer the value as a discount on the price of installation.
- All you need to worry when comparing system prices and working out financial returns is the out of pocket cost of the system – This is almost always the price advertised and quoted.
Feed in Tariff (Funded by State Governments and Electricity Suppliers)
- The payment for each Kilowatt Hour (kWh) or ‘unit’ of energy your systems produces which you don’t use and therefore sell back to the grid.
- Varies by state, 16c/kWh in SA and 8c/kWh in QLD – More info here – State Feed in Tariffs
- State’s impose a limit on the maximum size of system you can install to qualify, go over this size and you won’t be paid for anything you export. Generally 5kW (around 20 panels).
- You’ll receive a new bi-directional meter which records what you’re exporting as well as what you’re importing. You’ll be charged for this separately so be sure to ask your installer how much this is and whether or not they organise it.
Make sure that you understand these points as it will help you choose which size system to install and how best to get the maximum benefit. You’ll need to know whether or not it’s worth investing in the biggest system possible with a view to making an income from the system or a more modest system that simply reduces your bill.
The size of system you install depends on how much energy you use, when you use the bulk of your electricity and the Feed in Tariff you’ll receive.
- Low daily usage + Feed in Tariff rate lower than the rate you pay for electricity per kWh – Install a small system say between 1.5kW and 3kW as any excess will be sold back to the grid but you won’t be paid much for this.
- Low daily usage + Feed in Tariff rate higher than the rate you pay for power per kWh – If you can afford it, go for a bigger system and try to export as much as possible during the day by shifting your non essential usage outside the hours of 8am and 5pm.
- High daily usage + Feed in Tariff rate lower than the rate you pay for power per kWh – Go for a bigger system which will mean you will be importing less from the grid. You probably won’t export much electricity so the Feed in Tariff isn’t as important.
- High daily usage + Feed in Tariff rate higher than the rate you pay for power per kWh – Go for the biggest system possible and try to move non essential usage during the day to outside the hours of 8am and 5pm.
When should you use your power to make sure you get the greatest benefit from the system?
If the feed in tariff rate is more than the rate you pay for your electricity > Try to sell back as much to the grid as possible. This means using your big items such as your washer, dryer, oven or pool pump before 8am or after 5pm so that you can export as much power as possible and get paid the high Feed In Tariff rate for this power.
If the Feed in Tariff rate is less than what you pay (WA, NSW, QLD, Vic, SA) > It’s not worth exporting the power if you could be using it in the house. Shift your usage of large appliances to the middle of the day to use as much of your own power as possible.
If the Feed in Tariff in your state is the same as the rate you pay for your electricity (TAS, ACT, NT) – You can install a large system and you don’t have to worry about when you use your power.
We’ll go further into these and other issues in the coming pages.