Solar Feed-In Tariff Explained
If you have solar panels, your electricity bill includes a credit for the energy your system exports to the grid.
This credit is known as the solar feed-in tariff. Understanding how it works — and what affects it — can help you make better decisions about both your solar setup and your electricity plan.
What Is a Solar Feed-In Tariff?
A solar feed-in tariff (FiT) is the rate your electricity retailer pays you for electricity your solar panels generate and export to the grid — electricity you don't use yourself.
It's measured in cents per kilowatt hour (c/kWh) and appears as a credit on your electricity bill, reducing what you owe.
For example, if your feed-in tariff is 5 cents per kWh and you exported 300 kWh during the quarter, your bill would be reduced by $15.
How Feed-In Rates Vary
Feed-in tariffs vary significantly between electricity retailers and states. Unlike the earlier government-funded premium feed-in tariffs (some of which reached 44–60 c/kWh), today's market feed-in rates are much lower.
Current voluntary market rates in most Australian states typically range from:
- •3 to 12 cents per kWh depending on the retailer and state
- •some time-varying or 'premium export' rates may differ by time of day
- •rates can change when you switch plans or providers
It's worth checking your current feed-in rate and comparing it against what other retailers offer.
Why the Feed-In Tariff Is Only Part of the Picture
A common mistake solar households make is focusing only on the feed-in tariff rate when choosing an electricity plan. A higher feed-in rate doesn't automatically mean a better deal overall.
Plans with higher feed-in rates sometimes offset this by having:
- •higher usage rates per kilowatt hour
- •higher daily supply charges
- •fewer competitive benefits in other areas
The right plan for a solar household depends on the combination of usage rate, supply charge, and feed-in tariff — calculated against your actual export and import volumes.
Self-Consumption vs Exporting
In most cases, using solar power yourself (self-consumption) is more financially beneficial than exporting it to the grid. When you use your own solar power directly, you avoid paying the retail electricity rate. When you export it, you receive the (generally lower) feed-in rate.
For example, if your electricity rate is 28 c/kWh and your feed-in tariff is 6 c/kWh:
- •using 1 kWh yourself saves you 28 cents
- •exporting 1 kWh to the grid earns you 6 cents
Shifting household tasks — such as running the dishwasher or washing machine — to daylight hours can improve the financial return from your solar system.
What Solar Households Should Check
If you have solar, reviewing your electricity plan periodically is worthwhile. Things to look at include:
- •your current feed-in tariff rate
- •how much electricity you're exporting versus using yourself
- •whether your usage rate and supply charge are still competitive
- •whether a time-of-use plan might suit your export and import patterns better
Frequently Asked Questions
Can I change my feed-in tariff rate?
You can switch electricity retailers to access a different feed-in rate. Different retailers offer different rates, so comparing options is worthwhile. Just make sure to also compare usage rates and supply charges before switching.
Why has my solar credit shrunk over time?
Feed-in tariff rates have declined significantly over the past decade as solar has become more common and wholesale electricity prices have changed. If you haven't reviewed your plan recently, your feed-in rate may no longer be competitive — but the usage rate may also have changed.
Should I prioritise a high feed-in tariff or a low usage rate?
It depends on your specific usage and export volumes. A household that exports a large proportion of their solar generation will benefit more from a higher feed-in rate. One that self-consumes most of it will benefit more from a lower usage rate. Bill Scout accounts for both when calculating your comparison.