SolarPay News Feed
Feed In Tariff – How Do You Benefit?
Each Australian state is taking its own path on feed-in tariffs.
Feed In Tariff Queensland
Queensland implemented a Net Feed In Tariff in July 2008. Anyone producing electricity above what they are using get a credit of 44 cents per kWh produced. It is handled by the energy retailer (some pay more than 44c) and offset against the electricity bill. If there is a credit at the end of the year, you actually get paid by the energy companies.
Here is a sample calculation. It assumes an average quarterly power bill of $345. One third of that is off peak power (costing 9c/kWh), two thirds is for the continuous tariff (at 16c/kWh). With rising electricity prices in Queensland, the savings will be even better.
| Continuous | Off Peak | Feed In Tariff | Total Invoice | Savings | |
| No solar | $ 1,020 | $ 360 | $ - | $ 1,380 | $ - |
| 0% feed in | $ 680 | $ 360 | $ - | $ 1,040 | $ 340 |
| 50% feed in | $ 850 | $ 360 | -$ 440 | $ 770 | $ 610 |
| 100% feed in | $ 1,020 | $ 360 | -$ 880 | $ 500 | $ 880 |
A 1kW solar system produces about 2,000 kWh of electricity in South East Queensland in 1 year. So at the very least, you will reduce your electricity costs by $340 (if you have a northern roof at the right angle, etc). That is if you do not feed anything back into the grid at all.
Note: These figures do not take losses into account. Please check the updated Solar Bonus Cost Savings post that shows the corrected figures and a real life example.
If you are able to reduce or eliminate your energy consumption during the day (while the solar panels produce electricity), you might feed 1,000 kWh (50%) back into the grid. For that you would get a credit of $440 per year. The other 1,000 kWh would reduce the electricity you need to purchase. So your total savings a year would be $610.
Or if you can push that even further (100% will not really be possible, because usually the fridge is running during the day), you do even better.
So even though the electricity produced from a 1 kW system is only about 20% of your needs, you can reduce your invoice by up to 50%. A 2 kW system might bring it down to zero.
How to Benefit the Most
It is pretty obvious: If you can minimise your electricity consumption during the day, you have the biggest savings.
Here are some tips of how to achieve that the easiest (or of who is most suited for it):
- Smaller households will lower electricity bills to start off with, will benefit much more dramatically.
- If you are away during the day (e.g. work, school) you are more likely to achieve big savings.
- See whether you can use natural breezes and fans instead of air-conditioning.
- If you have a pool, can you set the timer of the pool pump so that it does not run between 10am and 3pm?
- Can you do the washing early in the mornings or evenings after the sun is down?
- If you need to use light during the day, do you use energy efficient lighting?
- Are you used to turning appliances off at the wall to avoid using stand-by power?
Feed in Tariff in Other States
South Australia – Net feed in tariff, paying 44 cents per kWh (electricity costs 22 cents, so the savings are different to the Queensland example above).
Northern Territory – Only available for residents of Alice Springs through the Solar City Program. They offer an elevated buy back rate (which is in essence an gross feed in tariff) of 45.76c/kWh (which is CPI indexed), but capped at $1,825 per year.
ACT – gross feed in tariff, began March 2009). It pays 50.05c/kWh up to 10kw capacity and 40.04c/kWh up to 30kW capacity. That is an excellent scheme that should see most 1 kW system cover the whole electricity bill (even with the lower solar gain in Canberra).
Victoria – A net feed in tariff of 60 cents/kWh commenced on 1 November 2009, but it is credit only.
NSW – A gross feed in tariff of 60 cents/kWh to commence in January 2010 and run for seven years. Available for systems up to 10kW.
Tasmania – 20c kWh commenced.
Western Australia – Announced a net feed in tariff commencing 1 July 2010.
National Gross Feed in Tariff
Germany has run a successful model of gross feed in tariffs and is one of the countries with the most solar panels installed (even though they have a lot less sun than Australia). They have a gross feed in tariff so it is often cited as a reason for doing that.
I am not so certain. The benefits of a net feed in tariff are that consumers become more conscious of their electricity consumption habits. So it has additional environmental benefits.
Financially, the two systems can be used to achieve the same savings. It is just a matter of choosing the right level to pay.
If the federal government decided to implement a national gross feed in tariff, a lot of rewiring would have to be done. Every household that has a solar system now with a net feed in meter would need a new meter. And seeing that the electricity prices in the states vary anyway and that some states have taken action already, I think we should continue along those lines and support it.
What About Solar Hot Water?
We sometimes get questions about solar hot water and a feed in tariff. Solar hot water system do not produce any electricity. They use the sun’s heat directly to produce hot water.
They are able to use 80% of the sun’s energy where solar panels that produce electricity are only about 20% efficient. So if there was no off peak tariff, and we paid continuous tariff rates for electric hot water heating, solar hot water would have a much bigger impact on an electricity bill.
As it stands, large families (or people on continuous tariff) usually get a better financial return from solar hot water. Single and double households with small electricity bills benefit more from solar photovoltaic, especially in the states with generous feed in tariffs.
Related Topics
- NSW announces gross feed-in tariff
Great news for the residents of New South Wales. Anyone with a solar power system (up to 10kW in size) will be able to sell ALL the electricity they generate... - National Gross Feed-in Tariff on the Agenda
Queensland Premier Anna Bligh has signalled a national gross feed-in tariff will be high on the agenda at the next Council of Australian Governments (COAG) meeting.... - New higher feed-in tariff in Queensland
It’s good to see Queensland electricity retailers are stepping up the rate they pay customers on the net feed-in tariff for solar energy. AGL recently announced a “Premium Solar Rebate”...
January 2nd, 2009 at 11:14 am
I would like to know more about Solarpower. We already have solar hotwater.
January 2nd, 2009 at 2:16 pm
Dear Rudi,
what would you like to know?
Alexander
February 18th, 2009 at 10:09 pm
The power we use in the day is sourced from solar, but in the evenings it needs to come from existing power stations..particularly peak load generators. I see solar as running down the need for base load generation. How do we cost in the need for extra peak capacity as the population increases?
February 22nd, 2009 at 9:38 am
Katrina, do you know when peak electricity is needed? And what appliances generate that need?
It is a good point to look at the peak capacity needs. I don’t have a good answer. However, I am hoping that we keep developing appliances that are more energy efficient and ways of decentralised power production that reduce the need for large centralised investments.
Smaller decentralised investments are always quicker to adapt to changing needs and developments.
March 17th, 2009 at 10:50 am
[...] Premier Anna Bligh has signalled a national gross feed-in tariff will be high on the agenda at the next Council of Australian Governments (COAG) meeting. Speaking [...]
April 6th, 2009 at 8:00 pm
[...] In Queensland, a 1kW system saves between $340 and $800, depending on your electricity usage. To understand how that works, have a look at How to Benefit from Feed-In Tariff. [...]
May 1st, 2009 at 11:03 am
[...] the post about Feed-in Tariff and How You Benefit, I stated that you can expect a 1kW system to produce 2,000 kWh per year (on the Sunshine Coast). [...]
June 5th, 2009 at 9:36 am
[...] in time), you receive 44 cents (compared with the 16 cents it costs to purchase electricity). See Net Feed In Tariff for [...]
October 6th, 2009 at 10:06 am
[...] their annual energy bills to a negligible amount. If they live in a state that benefits from a feed-in tariff they are being paid for the electricity they produce and their electricity bills can show credit [...]
October 28th, 2009 at 2:25 pm
I haven’t seen it stated anywhere, but at least in QLD the Feed-in-Tariff only looks at Tariff-11 and not the off peak tariffs such as Tariff-33 (hot water, etc). I believe that this would be the case in other states
I have had the following confirmed by Ergon in QLD – T33 has no effect on your T11, and your ability to export is determined by your T11 load only.
For example, this means if you are generating 1000W and using 400W in the house on Tariff-11 then you will have a net-feed-in of 600W to the grid (and getting 44c/kWh) no matter what you have connected on Tariff-33.
If you haven’t already, this is another reason to have your pool pump and air-conditioning connected to Tariff-33 along with your hot water electric boost.
If you have had your hot water replaced with a gas boost, then you can still use your T33 connection for other uses like pool pumps and a/c. It will need to be swapped over to the T33 circuit by an electrician and all equipment need to be hardwired to T33 (no plug connection) so you can’t swap it over to T11 in the off-peak period.
Many people complain that if they switch their a/c over to T33 then it will be off for hours at the time when they need/want it the most. Did you know that hot water on T33 goes off for long periods but there is a second relay in the T33 controller that is used non-hot-water equipment such as pool-pumps and a/c? This second circuit is only off for shorter periods.
Yes the power company can signal both T33 switches to be off but this would only be for extremely high demand periods. For our house our a/c is on T33 but is only ever off for 30minutes in the morning and another 30minutes in the afternoon, which is not an issue.
So as well as maximising the feed-in-tariff benefits you will also pay less than 12c/kWh for what you do use on T33, which is much less that the 18.9c/kWh on T11.
November 4th, 2009 at 10:59 am
[...] feed-in tariff in NSW is a net feed-in tariff. That means that you are being paid for any energy produced above what you use – at any [...]
November 22nd, 2009 at 8:44 pm
[...] is that we can feed 100% of the produced power back into the grid. For Queensland with its net feed-in tariff that will not happen. When we have out new meter from Energex, I’ll update you on what is [...]
December 13th, 2009 at 11:46 pm
There’s an important issue here which just doesn’t get enough airplay.
Many pool pumps are as noisy as hell – due to numerous factors:
1. No or little sound proofing in pump shed;
2. Pool pump too powerful – too many installers and customers think erroneously that bigger is always better;
3. Cheap, old pump with noisy bearings;
4. Pump too far from pool, hence outlet and return pipes too long, plus pipes too narrow (cheaper at installation) so more drag in pipes (and more noise) at any given volumetric flow rate (so more powerful, noisier pump needed at installation, see 2.)
5. No domestic pumps available in Australia are DSP controlled, brushless, with variable power output (instead use cheap crappy, old technology, brushed motors because most Australian consumers will only buy cheap pool pumps and most have never even heard of DSP controlled motors in any case).
The upshot is that many Queensland pool pumps are damned noisy, and therefore the Queensland EPA has this to say:
Swimming pool and spa pumps
7am–7pm — noise no louder than 50 decibels
7pm–10pm — no more than five decibels above background noise level
10pm–7am — no audible noise permitted
So think about your neighbours before you blithely switch to Tariff 33 and think you’ll run your pool pump all night. They may not be too happy about it.