Take advantage of the economic benefits of solar panel installation today.
Solar panels may cost a lot of money upfront, but homeowners can recoup these expenses in the long run – turning them into investments with the potential to generate money. With traditional electricity from the grid, power will always be an expenditure.
Australian homeowners can usually pay off their solar system in about four to five years, thanks to the money they save on their electricity bills. Once the solar system is paid off, you are free to keep or invest all of the savings you get from your panels.
On average, a solar system saves you 20% or more on electricity costs per year. When was the last time you actually made 20% ROI on your stocks, bonds or super?
And here’s more good news: if your panels make more electricity than you need, you can sell any excess solar power back to your energy provider. This means that you not only get to enjoy free electricity for your household but you also start earning money from your solar panels.
How do you get paid for generating solar electricity?
If you have installed solar panels for producing solar electricity in your house, and you are not consuming all of the solar power available, you can export any surplus solar electricity to the grid.
The payment you receive from your electricity retailer is called a feed-in tariff (FiT). Feed-in tariffs can help you recover the cost of your solar system faster. The FiT is usually a set rate per kilowatt hour which will be credited on your next power bill.
Electricity retailers in different states offer different FiT rates. Major electricity retailers tend to offer lower feed-in rates in the range of 5 cents per kilowatt-hour. Still, but you might be able to take advantage of feed-in tariffs up to 8 cents or 10 cents per kilowatt-hour from smaller retailers.
If your solar system is producing more energy than you can consume, you might want to ask your solar installer which company pays the highest feed-in tariff in your state.
How much do electricity retailers pay for feed-in tariffs?
In Australia, retailers pay a wide range of prices that for feed-in tariffs. Since retailers have no obligation to pay for feed-in power, some do not offer anything, while others introduce competitive rates to attract solar customers.
In comparing FiTs from different providers, data shows that minimum rates range from 0 to 20 cents per kilowatt-hour in New South Wales, while retailers in South Australia paid around 0 to 16 cents.
Victoria is the only state in Australia with a mandatory minimum feed-in tariff which the Essential Services Commission sets. As of this writing, the flat rate for solar FiT in Victoria is 8 cents per kilowatt-hour.
Some parts of Queensland have also set a minimum rate for solar FiT. In most regional households, the FiT is 7.842 cents per kilowatt-hour, as determined by the Queensland Competition Authority. However, in South East Queensland, retailers are allowed to operate in a free market.
One of the reasons that feed-in tariffs were set so high years ago was to offset the high cost of installing solar systems. During the early years of solar power in Australia, the industry wanted to encourage residents to switch to solar by offering them sweet incentives. However, solar installation prices have fallen nearly 60% in the past six years. So even though FiT rates have plunged to just a few cents per kWh, solar systems can still pay for themselves.
Is it still worth pursuing FiTs?
As more and more households and businesses install solar panels on their rooftops, there is now an oversupply of solar electricity. Solar generation is often at its peak when market demand is lowest – usually between 9 am and 3 pm. This solar power surplus drives the wholesale cost of electricity and helps regulators recommend the minimum benchmark price for FiTs.
In New South Wales, the Independent Pricing and Regulatory Tribunal (IPART) recommends a solar FiT benchmark rate of 5.5 cents per kilowatt-hour. However, since electricity retailers are not required to set a feed-in tariff within the IPART benchmark range, some are able to offer customers a feed-in tariff up to 38% higher than the IPART benchmark rate.
If you are unable to use all of the solar electricity that your panels produce, then FiTs can be a great way to make extra money that could go into paying off your solar installation expenses. Getting the best rates on your FiTs means quicker payback time, so it’s worth shopping around before choosing a plan for selling excess solar power.
Why choose Aztech?
Here at Aztech Solar, we have been helping customers choose the best energy retailer so they can enjoy good deals for their FiTs. We design smart bespoke solar solutions for residential and commercial installations in Sydney, Hunter Area, Newcastle, Central Coast and North Coast. If you are interested in a new solar system or would like to have your existing one serviced by an experienced crew, give us a call today on 02 4067 2634 or email firstname.lastname@example.org.