How solar energy feed-in tariffs work

Queensland homeowners with solar energy systems may be eligible to receive a tariff from their energy provider.

Free electricity generated by the sun combined with the added incentive of being paid a feed-in tariff make installing a solar power system for your home a financial investment worth considering.

This is despite concerns a drop in the State Government’s feed-in tariffs scheme over recent years hasmade installing a solar system less attractive.

While the tariff is not as high as it was, this has been offset by a significant reduction in the cost of installing a solar system over the same period.

Solar Choice’s Solar Price Index reveals the cost of solar power systems has dropped significantly over the past eight years.

The price index has been recorded monthly since 2012 when the cost of solar was about three times more than it is today.

Due to the high cost of solar panels in the early 2010s, high feed-in tariffs from governments were needed to encourage people to make the investment in solar.

A drop in manufacturing prices and installation efficiencies have seen solar panel costs drop from an average of $12,500 in 2012 (for a 5kw system) to about $5050 in 2020, according to the Australian Energy Foundation.

This means high feed-in tariffs are no longer needed to make installing solar financially viable with a typical solar system paying for itself in three to five years.  

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So, what are feed-in tariffs?

State Government scheme sees energy providers pay owner of solar energy systems for the excess renewable energy they produce at their home.

Power generated by a household solar system which is not used at the home gets fed back into the main electricity grid. This energy is then credited back to you on your next electricity.

In south-east Queensland, energy retailers offer different feed-in tariff rates for solar customers, so it is recommended users shop around for the best deal.

You can find out what feed-in tariffs retailers are offering by visiting the Australian Energy Regulator’s Energy Made Easy website and using the energy offer comparison.

Click here for more information on feed-in tariffs in south-east Queensland.

In regional Queensland, eligible Ergon Energy Retail and Origin Energy customers receive a flatt-rate tariff.

The rate is set by the Queensland Competition Authority and for 2020/21 is 7.861 cents per kilowatt hour.

To find out if you are eligible for the feed-in tariff, contact Ergon Energy Retail (if you are connected to the Ergon Energy network) or Origin Energy (if you are connected to the Essential Energy network).

Click here for more information on feed-in tariffs in regional Queensland.

How the feed-in tariff saves you money

The feed-in tariff is part of what makes installing solar for your home financially attractive.

If you generate renewable energy for personal use, you will save money on electricity.

If you produce more than you use, the energy that you generate can be exported into the grid for others to use and you may receive a credit on your already reduced energy bill.