A Feed in Tariff (FIT) is the amount you’re paid per unit (kilowatt hour – kWh) of your unused electricity that you can sell back to the grid.
Currently, most state governments mandate a minimum retailer feed in tariff rate, which your energy retailer will provide to you. In states where a retail feed in tariff is voluntary (WA, NSW & Qld), many retailers will offer you one anyway. This means that, regardless of where you live, you can still make a good return on the excess power your system produces.
|QLD||6-10c/kWh||Varies by retailer||more info|
|VIC||min of 8c/kWh||Reviewed annually, will be reduced to 6.2c/kWh by 2015||more info|
|SA||min of 6c/kWh||Effective from July 1st 2014||more info|
|TAS||5.5c/kWh||Reviewed annually||more info|
|NSW||up to 8c/kWh||Varies by retailer||more info|
|WA||7.135c/kWh or 10-50c/kWh||Varies by retailer and area in which you live||more info|
While the incredible feed in tariff rates of a few years ago are no longer available, the effect of these cuts on the attractiveness of installing solar has been neutralised by the massive reductions in the costs of system hardware (panels and inverters) over the same period.
For example, a 20 panel 5kW system would have set you back between $17,000 and $25,000 2 years ago after rebates. Now, you’ll pick up the same size system, with top quality components, for between $6,000 and $9,000. This is due mainly to the reduction in the prices for solar panels worldwide.
So, yes, you’re getting paid less for what you export to the grid but at the same time, you’re paying much less for the system which at the end of the day is making larger systems accessible to more people.
The amount you get paid as a Feed in Tariff matters mainly if you install a larger system that produces more power than you would expect to use between 9am and 3pm each day. If you’re simply offsetting your current usage or reducing the amount you draw from the grid, you wouldn’t have been paid for exporting much power anyway and the feed in tariff isn’t as important.
If on the other hand you install a large system (5kW – around 20 panels) and live in a small house on your own plus don’t consume power during the day, you’d like to be paid a high rate for that power you’re exporting. This is an extreme example of a system size not matching the occupant, but most people will need to do the numbers and figure out the system that offers the best return for the money invested. We recommend getting a few, no obligation quotes and having the installers go through the numbers with you.