Solar feed-in tariffs explained

When a rooftop solar system generates more electricity than the house is using, the surplus flows back into the grid. The feed-in tariff is the rate your retailer credits you for that exported energy, quoted in cents per kilowatt hour, and it appears on your bill as a credit against what you have bought.

Feed-in tariffs today are mostly set by retailers competing for customers. New South Wales publishes a non-binding benchmark, regional Queensland and Tasmania set regulated rates, Western Australia's buyback rates are set by government, and Victoria scrapped its minimum from July 2025, so in most of the country the number is a commercial offer that varies between retailers and changes with the market. The generous legacy schemes that paid well above the retail rate closed to new customers years ago.

The direction has been consistently downward, and the reason is straightforward. So much rooftop solar now exports at the same time that the wholesale value of electricity in the middle of the day has collapsed, and is regularly negative in the strongest solar states. A retailer cannot pay much for energy it can barely give away at the moment it arrives.

A feed-in tariff is not free money for the retailer to hand out. It is a cost, and retailers offering an eye-catching rate generally recover it through a higher usage rate, a higher daily supply charge, or by capping how much you can export at the advertised price.

That trade only favours you if the extra credits on your exports outweigh the extra cost of your imports, which for most households they do not. A typical solar home still buys the bulk of its evening and overnight power from the grid, so a few cents on the usage rate outweighs several cents on the feed-in tariff.

The lesson is not that low feed-in tariffs are good. It is that the feed-in tariff cannot be assessed on its own. The comparison that holds up uses the household’s own consumption and export figures, both of which appear on your existing bill, against the full set of rates on the plan you are considering.

Every kilowatt hour your household uses at the moment the panels are producing is a kilowatt hour you do not buy. It is therefore worth the usage rate, commonly 25 to 40 cents depending on where you live and which plan you are on. Exported, that same kilowatt hour might earn anywhere from nothing to around 10 cents. Using it rather than selling it is worth several times as much, and on many plans ten times or more.

That ratio is the single most useful fact about owning solar in Australia today, and it depends on when the household uses power.

Shifting load into daylight hours, in rough order of value:

• Hot water. Often the largest single load in the house. An electric storage system on a timer or a controlled load can frequently be moved to the middle of the day.
• Pool pumps, which run for hours and can simply be scheduled between 10am and 3pm.
• Electric vehicle charging, where daytime charging at home converts exports into kilometres at the usage rate rather than the feed-in rate.
• Dishwashers, washing machines and dryers, using the delay timers most already have.
• Heating and cooling, pre-conditioning the house in the afternoon so less is needed after sunset.

Households considering a battery are doing a version of the same calculation, storing cheap or self-generated energy to avoid buying at the evening peak. Whether that stacks up depends on the system cost, your usage shape, and any federal or state rebate available, so the numbers on a household’s own bill say more than a general example.

Four numbers decide the bill, and they have to be read together:

1. The usage rate, in cents per kWh for the power you buy, including how it changes across time-of-use periods if the plan is not a flat rate.
2. The daily supply charge, which you pay every day regardless of how little you import. On a low-consumption solar home this is a larger share of the bill than most people realise.
3. The feed-in tariff, with any conditions attached to it.
4. The benefit period, since a discount or an introductory rate that expires after 12 months turns a competitive plan into an ordinary one without any action from you.

Two structures deserve particular attention. A tiered tariff pays the advertised rate only up to a set number of kilowatt hours a day and much less beyond it, which suits a small system and penalises a large one. A time-varying tariff pays different rates at different hours, sometimes very little at midday and considerably more in the evening peak, which is designed for households with a battery.

The government comparison sites, Energy Made Easy for most of the country and Victorian Energy Compare in Victoria, will accept your usage and export figures and rank offers on the total. They are free, they are not funded by retailers, and they are an independent cross-check on any comparison, including ours.

• Registering the system with the retailer. Feed-in credits do not start until the solar installation is registered and, where required, the meter is reconfigured. Exports made before that point are generally not paid for.
• The meter. A system exporting through an old accumulation meter can be measuring nothing, or worse. A smart or bi-directional meter is required to record exports properly.
• Credits offset the bill, they do not usually arrive as cash. Most retailers apply the credit against what you owe and carry a surplus forward, though some will pay out a balance on request.
• Feed-in rates can change with notice in most of the market, as can usage rates. A retailer is required to give notice of the change.
• Switching retailers does not touch your system. No electrician is involved, nothing is disconnected, and the panels keep working throughout, exactly as with any other switch.

Solar households are among the least likely to switch retailers and among the most likely to benefit from doing so, because the interaction of usage rates, supply charges and feed-in tariffs means the ranking of plans is materially different for them than for a home without panels. The household’s own export and import figures are what decide the ranking.