Solar Feed-in Tariffs Compared: State by State Analysis
State Solar Feed-In Tariffs in Australia: A Comprehensive Overview
In Australia, each State and Territory has its unique approach to the concept of solar feed-in tariffs. These tariffs, often referred to as the “solar bonus scheme” or “solar buy-back scheme,” are incentives for homeowners and businesses to produce clean energy.
Essentially, solar feed-in tariffs are payments received for the surplus clean energy that solar panels generate and subsequently feed back into the electricity grid. With evolving energy policies, there have been significant changes to the feed-in tariff legislation across all Australian states and territories in recent years. For an in-depth look at the current incentives and rates offered, please refer to our detailed summary table below.
While premium tariffs may no longer be in place, the reduced prices of solar PV systems have made them less critical than before for making solar financially viable. Instead, the escalating electricity costs have become the primary driver for investing in a solar PV system, offering homeowners an effective means of taking control of their energy bills. For further insights on the concept of ‘solar self-consumption,’ please explore more details on our platform.
Current solar feed-in schemes by Australian state
- New South Wales: There is no mandatory minimum feed-in tariff rate in NSW. Instead, individual electricity retailers assign a value to exported solar energy. The highest feed-in tariff in NSW is currently 17 cents per kilowatt hour (c/kWh) offered by GloBird Energy.
- Victoria: The Victorian government offers a solar bonus scheme that pays an additional 3.5 cents per kilowatt hour (c/kWh) for solar electricity that is exported to the grid. The maximum feed-in tariff in Victoria is 16.5 c/kWh.
- Queensland: The Queensland government offers a solar bonus scheme that pays an additional 2 cents per kilowatt hour (c/kWh) for solar electricity that is exported to the grid. The maximum feed-in tariff in Queensland is 15 c/kWh.
- South Australia: The South Australian government offers a solar bonus scheme that pays an additional 4 cents per kilowatt hour (c/kWh) for solar electricity that is exported to the grid. The maximum feed-in tariff in South Australia is 18.5 c/kWh.
- Western Australia: There is no mandatory minimum feed-in tariff rate in WA. Instead, individual electricity retailers assign a value to exported solar energy. The highest feed-in tariff in WA is currently 15 cents per kilowatt hour (c/kWh) offered by Synergy.
- Australian Capital Territory: The ACT government offers a solar bonus scheme that pays an additional 3 cents per kilowatt hour (c/kWh) for solar electricity that is exported to the grid. The maximum feed-in tariff in the ACT is 16 c/kWh.
- Northern Territory: There is no mandatory minimum feed-in tariff rate in the NT. Instead, individual electricity retailers assign a value to exported solar energy. The highest feed-in tariff in the NT is currently 13 cents per kilowatt hour (c/kWh) offered by Power and Water.
- Tasmania: The Tasmanian government offers a solar bonus scheme that pays an additional 2 cents per kilowatt hour (c/kWh) for solar electricity that is exported to the grid. The maximum feed-in tariff in Tasmania is 15 c/kWh.
It is important to note that these feed-in tariffs are subject to change, so it is always best to check with your local electricity retailer for the latest rates.
FAQs
What is the Function of the Solar Feed-In Tariff?
The current solar feed-in tariff system operates by providing payments to solar system owners for the surplus energy they sell back to the grid. For instance, if a solar system owner produces 10 kWh from their solar panels but only consumes 5 kWh in their home, the excess 5 kWh can be sold back to the grid for a solar feed-in tariff.
What Factors Are Considered in Calculating the Solar Feed-In Tariff?
The calculation methods for solar feed-in tariffs vary from state to state. In some regions, such as New South Wales (NSW), the Independent Pricing and Regulatory Tribunal issues guidelines, but the exact calculations and payments are determined by individual retailers. Other areas, like Victoria (VIC), have minimum solar feed-in tariffs set by the government, subject to regular updates.
Is the Solar Feed-In Tariff Subject to Taxation?
The taxation of solar feed-in tariffs depends on the circumstances of the solar PV system adoption. While there is no specific legislation regarding the taxation of feed-in tariffs, if you can demonstrate that your solar system is not intended to generate profit, you may avoid having your tariff receipts classified as taxable income. Most households with solar systems aim to reduce power bills rather than generate income, but it is advisable to consult an accountant or contact the Australian Taxation Office (ATO) for personalized guidance.
What Makes a Solar Feed-In Tariff a Good Choice?
A good feed-in tariff varies depending on the state or territory in which you reside. It’s essential to compare different tariffs and consider factors beyond just the tariff rate. Some retailers may offer high feed-in tariffs but charge higher electricity purchase rates, which can offset the benefits. Location plays a significant role in determining the best feed-in tariff, and browsing through updated lists on our blog can help you find the most favorable options in your state.
Why Solar Feed-In Tariffs Have Experienced a Downward Trend
Initially, the government provided generous subsidies to promote the solar industry, resulting in high feed-in tariffs. As solar adoption increased and the market matured, these premium offers were phased out. Currently, feed-in tariff rates are primarily set by electricity retailers, and they have decreased as the cost of power on the wholesale market during the daytime has reduced due to the widespread installation of solar systems.
Are solar feed-in tariffs ending?
No, solar feed-in tariffs are still available from most retailers, even though they have decreased over time. The premium feed-in tariff system that once accounted for the high cost of solar PV systems has been phased out, but retailers continue to offer feed-in tariffs based on wholesale power costs and individual pricing structures. Solar panel adoption remains a worthwhile investment, especially given the competitive prices available through our platform. Feel free to contact us for more information.