When solar panels generate more energy than needed, the excess energy is sent back to the main grid for others to use. Feed-in tariffs are the rates solar panels owners receive for one unit of power (kWh) sent to the gird.
Feed-in Tariffs are paid by electricity retailers and aim to encourage to go solar. Both residential solar and commercial solar are eligible, depending on the system size. After installation, users simply register their solar power system to apply to the Feed-in Tariffs.
Nothing too difficult to understand so far but things become more difficult when it comes to the essential question: how much are those rates?
The answer is: it depends. On what? The location, the system size, the electricity provider and the date the application is lodged.
For the rest of the article, we will focus on feed-in tariff in Victoria only.
Previous feed-in tariff rates
In 2009 when the Premium FIT scheme was created, rates were quite generous to balance the expensive prices of the panels. As a result, Victorian who applied to install a solar system (under 100kW) between 2009 and 2011 are still under these generous tariffs and will receive 60 cents per kWh until 2024.
The transitional feed-in tariff replaces the Premium FIT. Applicants with a system under 5kW were eligible for a minimum of 25 cents paid per kWh fed back to the grid. This scheme opened in 2011 and closed to new applicants in 2012.
In addition, the standard feed-in tariff was accessible to businesses and households with a system size of 100kW or less and provided a one-to-one rate based on the electricity retail price paid by the customer. This FIT system was opened for applicants from 2011 until the end of 2012.
The table below summarizes these old tariffs:
Source energy vc.com.au
Current feed-in tariff
The current Victorian feed-in tariff started in 2013 and is available to all applicants with a solar system under 100kW. This scheme currently offers 11.3 cents per kWh sent to the grid. From January 2017, customers that came from the old feed-in tariffs (standard or traditional) can also apply to this scheme.
The 2018 rates
The Essential Service Commission, the organisation which regulate Victoria’s energy rates, has released the new tariffs effective from July 1st, 2018. This new feed-in tariff scheme offers two rates for energy retailers: a fixed rate and a time-varying tariff rates. Retailers will have to offer at least one of the options.
- The single tariff
The new rate will be 1.4 cents lower than the current one and decrease to 9.9 cents per kilowatt-hour.
- The time-varying rates
With this scheme, the rates will vary during the day to reflect the law of supply and demand.
Source: ESC 2018 final decision report
Considering the following block structures:
Source: ESC 2018 final decision report
Those varying tariffs mean two things:
- Customers with a western facing installation are favoured as peak hours for the FIT is between 3 pm and 9 pm, when the sun is in the West.
- Customers with battery storage can export their energy during peak hour and maximise their earning.
For more information about the FIT visit the official website or contact Energis on 1300 782 217 or at sales@energis.com.au.
