Renewable energy has become an increasingly popular option for Australian homeowners, with more and more Aussies looking to reduce their reliance on fossil fuels and protect themselves from rising power prices. In fact, over 3 million Australian homes currently have rooftop solar installed! Feed-in tariffs have played a crucial role in incentivising solar uptake, by offering payments to homeowners and businesses for the excess electricity they produce – feeding it back into the grid. In this blog post, we’ll explore the concept of feed-in tariffs, their impact on solar power, and how homeowners and businesses can maximise their savings through solar storage.
Understanding Feed-in Tariffs and their Impact on Solar Power
Feed-in tariffs are payments made by electricity companies to homeowners and businesses for the excess energy produced by their solar power systems, which is fed back into the grid. This serves as an incentive to encourage more properties to switch to renewable energy and reduce reliance on non-renewable sources.
In Australia, feed-in tariffs may be paid by each individual electricity retailer and vary wildly dependant on your location. Some areas, such as regional Queensland are offered a flat rate feed-in tariff which is set annually by the Queensland Competition Authority. Other areas (such as South East Queensland, for example) aren’t required to pay a feed-in tariff at a set rate – it is at the discretion of the retailer. However, with a shift in public opinion away from non-renewable sources of energy, as well as coal shortages, most retailers gladly utilise the electricity generated by home rooftop solar systems within their own network, paying you for the privilege.
The impact of feed-in tariffs on solar power is significant, as it helps make solar power more financially viable. With the feed-in tariff credits received from utility companies, combined with needing to purchase less electricity from the grid, the investment in solar can have a relatively short pay-back time, usually becoming profitable in under 5 years.
Feed-in tariffs can also help drive innovation in renewable energy technology, as more people and businesses invest in solar power systems. Increasing demand for solar energy means research and development into solar technology is further developed, creating more efficient solar power systems that can capture more energy from sunlight as well as innovations in battery storage, making renewable energy more accessible and dependable.
For anyone considering switching to solar power or investing in renewable energy, understanding feed-in tariffs is crucial. The financial viability and environmental impact these policies introduce are important factors to understand before transitioning to solar technology.
Does Investing in Solar Storage Mean Losing Your Feed-in Tariff Income?
Solar storage is a game-changer when it comes to reducing your reliance on fossil fuels. By storing the excess energy produced by your solar system, you can reduce the amount of energy you need to purchase from the grid, and maximise your use of your own, self-generated power. However, that doesn’t mean you need to give up your feed-in tariff income. Here’s how:
- Reduced reliance on the grid: With solar storage, you become less reliant on buying electricity from the grid, making you more self-sufficient and less vulnerable to power outages.
- Still export to the grid even with battery storage: The abundant Australian sun allows homes with energy storage to fully charge their batteries long before the sun sets, meaning you can still export to the grid even after filling your own battery.
- Renewable energy, even at night: With solar storage, you can power your home with renewable energy, even at night when the sun isn’t shining.
- Savings on energy bills: By reducing the amount of energy you need to purchase from the grid (which is normally set at a higher price than your feed in tariff), you can save even more money on your energy bills.
Investing in solar storage is a smart financial move for homeowners and businesses looking to maximise their use of renewable energy while maintaining their feed-in tariff income. Solar storage technology is becoming more accessible and affordable, making it an increasingly popular choice for those looking to switch to renewable energy.
The Pros and Cons of Switching to Renewable Energy with Feed-in Tariffs
Switching to renewable energy with feed-in tariffs offers numerous benefits, including:
- Reduced energy costs
- Greater energy independence
- Reduced reliance on non-renewable sources
However, there are also some challenges to consider:
- The upfront cost of installing solar panels and storage systems
- Fluctuating feed-in tariffs
It is important for homeowners and businesses to weigh the pros and cons before investing in rooftop solar. While the upfront cost may be a significant investment, the long-term benefits generally far outweigh these costs. Renewable energy combined with feed-in tariffs offers a sustainable and cost-effective solution that not only benefits the individual, but also the environment and the community.
At Redback, we recommend consulting with an accredited solar installer, who can help you to make an informed decision, as well as ensure that your solar power system is properly installed and maintained to maximise its efficiency and lifespan.
The Future of Feed-in Tariffs
With the growing demand for renewable energy and increasing concerns about the environmental impact of non-renewable sources, it’s no surprise that the future of feed-in tariffs is uncertain. In the early stages of solar adoption, some retailers offered high feed-in tariffs to help incentivise this uptake of rooftop solar power by actively rewarding solar owners. The rise of solar power in recent years has been significant, and experts predict that it will continue to grow in popularity and efficiency. This ever-increasing adoption of solar power means an increase of homes and small businesses looking to capitalise on feed-in tariffs, causing a high volume of energy to be available to the market during the daylight hours, potentially exceeding demand and driving down the prices of feed-in tariffs on offer.
Feed-in tariffs may be lower than in previous years, but that doesn’t mean you should discount their effect on your power bill. There are still many ways to get the most out of the feed-in tariffs currently on offer. The solar deal sweet spot is a plan that combines a low usage and supply charge with a reasonable solar feed-in tariff.
Another thing to keep in mind is that the money you receive from a solar feed-in tariffs is likely to be less than the cost of buying electricity. Therefore, shifting some of your loads such as hot water heaters, pool pumps, washing machines and dishwashers to the middle of the day can help soak up your excess solar, helping make you more efficient and decreasing your electricity purchase from the grid. Once those larger loads are taken care of, you can sell your further excess solar and receive the additional benefit of your feed-in tariff.
As previously mentioned, the addition of battery storage to your rooftop solar doesn’t mean you’re giving up the benefits of your solar feed-in tariff. By reducing the amount of electricity you purchase when the sun isn’t shining, you can save money while continuing to collect your feed-in tariff during the day by exporting your excess solar. While the upfront cost may be higher than a solar system on its own, some state governments offer rebates and loans to help reduce the upfront cost of batteries.
Feed-in Tariffs and Battery Storage: It’s about Time
For those homes (and small businesses) with solar and battery storage, you can make even more of the energy that your system is storing, while still benefiting from feed-in tariff credits. Some independent Australian energy providers allow you to purchase electricity at wholesale energy prices, which vary every half hour based on the supply and demand of energy across the grid. This contrasts with more traditional providers that offer fixed energy pricing.
This fluctuating pricing model also impacts feed-in tariff rates, which increase when network demand is high. By configuring your battery to discharge back to the grid during these peak periods, you can maximise your earnings from excess solar energy and make the most of the varying feed-in tariff rates. It’s a smart and technologically savvy way to optimise your energy usage and maximise savings.
Government Support for Renewable Energy
In addition to the benefits of feed-in tariff credits, the Australian government has many schemes in place that show its support for renewable energy:
- The Small-scale Renewable Energy Scheme supports the installation of small-scale renewable energy systems, including rooftop solar panels and solar water heaters. It provided financial incentives in the form of small-scale technology certificates (STCs) to individuals and businesses adopting these technologies. You can find more information here.
- The Australian Renewable Energy Agency is an independent agency that provides funding and support for renewable energy projects in Australia. It focuses on advancing technologies, improving energy storage, and increasing the competitiveness of renewable energy sources. This can include using data from smart meters to see how the government can help support renewables in the future.
- Several Australians states and territories have been extremely proactive when it comes to renewable energy. For example, Victoria, South Australia and the Northern Territory have provided thousands of homes with subsidies for renewable energy devices including rooftop solar and solar battery installations.
Predictions for Feed-in Tariffs
It’s hard to predict the future of feed-in tariffs. Australia’s looming 2030 Net Zero deadline, coal shortages, plus the war in Ukraine affecting fossil fuel prices are putting a large amount of pressure on Australian electricity retailers. When coupled with an ageing energy grid that was primarily designed to only flow in a single direction, feed-in tariffs are a small cog in a much larger machine. Retailers will always depend on rooftop solar to help, but for homeowners and small businesses investing in battery storage may help protect against rising energy prices if feed-in tariffs continue to wildly fluctuate.
The future’s bright – the future’s Solar
It’s clear that feed-in tariffs are a great incentive for people looking to switch to renewable energy sources, particularly solar power. They offer financial benefits to both homeowners and businesses by allowing them to earn credit from the excess energy their solar power systems produce. Additionally, by investing in solar storage technology, homeowners and businesses reduce their reliance on non-renewable sources and become more energy self-sufficient all while maintaining a feed-in tariff income. While there are costs to consider when switching to renewable energy, the long-term benefits far outweigh these.
With the future of renewable energy looking bright, now is the perfect time to start transitioning to solar power and taking advantage of feed-in tariffs. Consulting with an accredited solar installer can help both homeowners and businesses make informed decisions about rooftop solar and the ways to maximise feed-in tariff benefits. By embracing renewable energy technologies such as solar batteries in tandem with feed-in tariffs, we can all contribute to a more sustainable and environmentally friendly Australia.