Trystan Casey
Feed-in tariffs (FITs) are a policy mechanism designed to accelerate investment in renewable energy technologies by offering long-term contracts to renewable energy producers. They are common in the U.S. and around the world, with over 50 countries having enacted FIT policies as of 2019. In the U.S., the Smart Export Guarantee replaced the Feed-in Tariff scheme on 1 January 2020, although the process remains largely the same. In Australia, most electricity retailers offer competitive feed-in tariffs as part of their standard product range, with some even offering products specifically designed for customers with solar panels.
| Characteristics | Values |
|---|---|
| Purpose | To encourage the development of renewable energy sources |
| Mechanism | Offering long-term contracts to renewable energy producers |
| Incentive | Above-market price for electricity supplied to the grid |
| Eligibility | Anyone who produces renewable energy |
| Examples | Gainesville, Florida; Hawaii; Germany; Japan; Switzerland; California; Indiana |
| Considerations | Technology, location, size, and region |
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What You'll Learn
Voluntary vs. mandatory feed-in tariff suppliers
A feed-in tariff (FIT) is a policy designed to encourage the development of renewable energy sources. It offers energy producers a guaranteed, above-market price for the electricity they supply to the grid. FITs are common in the U.S. and around the world, most notably in Germany, Japan, and China.
In the context of voluntary vs. mandatory feed-in tariff suppliers, it is important to understand the role of electricity retailers and the varying approaches taken by different regions. In some areas, such as southeastern Queensland (Energex network), there is no mandatory minimum feed-in tariff rate. Instead, individual electricity retailers voluntarily assign a value to exported solar power, with some offering more competitive rates than others. This situation is similar in South Australia, where electricity retailers set their own feed-in rates, prompting solar homes to shop around for the best deals.
On the other hand, certain regions have implemented mandatory minimum feed-in tariff rates set by government-owned network companies or through legislation. For example, in the southwestern region of Western Australia, the mandatory minimum feed-in tariff rate is determined by Synergy, a government-owned network company. Similarly, official state-sanctioned solar feed-in tariffs were once guaranteed by legislation in Victoria, Australia, although these rates are now voluntary.
It is worth noting that the feed-in tariff landscape is constantly evolving, with some countries that previously relied heavily on FITs, such as Germany and China, now seeking more market-driven sources of support and control over the supply of renewable energy produced. As of 2019, over 50 countries had enacted FIT policies, and FITs continue to play a vital role in driving the development of renewable energy resources globally.
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How to find the best solar feed-in tariff
A feed-in tariff (FIT) is a policy mechanism designed to accelerate investment in renewable energy technologies by offering long-term contracts to renewable energy producers. It offers energy producers a guaranteed, above-market price for the electricity they supply to the grid.
When it comes to finding the best solar feed-in tariff, there are a few things to keep in mind. Firstly, it's important to understand that feed-in tariffs are not mandatory and may not be available in all regions. In some areas, such as New South Wales, there is no minimum feed-in tariff, and rates can vary depending on your electricity provider. On the other hand, certain regions, such as regional Queensland, may have a mandatory minimum feed-in tariff for exported solar power. Therefore, it is essential to check the regulations and offerings in your specific location.
Secondly, feed-in tariffs can vary significantly between different electricity retailers. Some retailers may offer more competitive rates than others, so it is worth shopping around and comparing the normal feed-in tariff rates offered by different companies. Additionally, pay attention to the fine print and be aware of any promotional rates that may only apply for a limited time, such as a maximum or bonus feed-in tariff for the first 12 months of a contract.
Thirdly, consider the impact of self-consumption on the overall value you get from your solar system. While feed-in tariffs provide an incentive for exporting excess solar energy to the grid, maximizing your self-consumption can help you get the most value from your solar panels. This involves using the solar energy you generate to directly power your electrical appliances, reducing your reliance on electricity from the grid. Proper solar system sizing and shifting your electricity consumption patterns can help optimize self-consumption.
Lastly, keep in mind that feed-in tariffs are just one of the many financial incentives available for those investing in solar. Other incentives to consider include rebates, tax credits, and net metering policies, which can also help reduce the cost of installing and operating solar panels. By combining these incentives with a favourable feed-in tariff, you can maximize the financial benefits of your solar system.
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Feed-in tariff licensees
Feed-in tariffs (FITs) are a policy mechanism designed to accelerate investment in renewable energy technologies. They do this by offering long-term contracts to renewable energy producers, guaranteeing them an above-market price for the electricity they supply to the grid. This helps to reduce the risks associated with these investments and makes renewable energy projects more financially attractive.
Anyone who produces renewable energy is eligible for a feed-in tariff, but those who take advantage of it are often not commercial energy producers. They can include homeowners, business owners, farmers, and private investors.
Feed-in tariffs are common in the US and around the world, with over 50 countries having enacted FIT policies as of 2019. In the US, the Carter administration first implemented FITs in 1978 in response to the energy crisis of the 1970s. More recently, in 2009, 11 state legislatures were considering adopting a FIT as a complement to their renewable electricity mandates. The California Public Utilities Commission (CPUC) approved a feed-in tariff in 2008, and in 2010, the Marin Energy Authority launched the first Community Choice Aggregate Feed-in Tariff program. Additionally, municipal utility companies enacted feed-in tariff pilot programs in Palo Alto and Los Angeles. In 2009, the Hawaii Public Utilities Commission required Hawaiian Electric Company to pay above-market prices for renewable energy fed into the electric grid, offering projects a set price and a standard 20-year contract.
Outside of the US, Switzerland introduced the "Cost-covering remuneration for feed-in to the electricity grid (CRF)" in 2008, which applies to hydropower, photovoltaics, wind energy, geothermal energy, biomass, and waste material from biomass. This policy is implemented through the national grid operator, SWISSGRID.
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Feed-in tariff rates in Australia
Feed-in tariffs (FiT) are a credit you can receive for any unused electricity generated from your solar system that is sent back to the grid. In Australia, feed-in tariffs differ from state to state and what you can earn back will depend on your rate, the plan you’re on, and how much energy you’re feeding back.
New South Wales (NSW)
On 8 May 2008, the NSW government announced that it intended to introduce feed-in tariffs. There is currently no mandatory minimum feed-in tariff rate for southeastern Queensland (Energex network). Individual electricity retailers assign a value to exported solar power as they see fit.
Australian Capital Territory (ACT)
The ACT government’s Electricity Feed-in Tariff Schemes are closed to new applicants (since 13 July 2011). New ACT solar customers must have a net meter.
Queensland (QLD)
The QLD government’s Solar Bonus Scheme is closed to new applicants (since 30 June 2013). Southern regional customers are supplied by Essential Energy and are on a different tariff to the rest of Queensland. There is a mandatory minimum feed-in tariff rate for regional Queensland (Ergon network).
South Australia (SA)
The South Australian government does not offer any additional rebates or incentives to domestic customers. There is currently no minimum solar feed-in rate in South Australia. Instead, electricity retailers set their own feed-in rates voluntarily. However, South Australia has had a surge in feed-in tariff rates recently, with some retailers now offering FiTs upward of 10c/kWh.
Victoria
The Victorian Government Premium Feed-in Tariff scheme ends on 1 November 2024. The scheme was introduced in 2009 to help Victorians with the costs of installing solar systems by offering 60c/kWh for electricity exported by your solar system to the grid. From 2 November 2024, customers will receive the standard retailer feed-in tariff of 3.3c/kWh.
Western Australia (WA)
The mandatory minimum feed-in tariff rate for the southwestern region of Western Australia is set by the government-owned network company Synergy. The Western Australian Government had committed to a limited gross feed-in tariff for household-scale PV, but later deferred the introduction of the scheme.
Tasmania
The Tasmanian Government will consider a mid-year report on the introduction of minimum feed-in tariffs to support householders and small energy consumers using solar panels and other forms of domestic renewable energy that provide surplus energy into the electricity grid. The newly competitive Tasmanian energy market now gives households a few retailers to consider, some of which have come to the table with a compelling offer for solar customers.
Northern Territory (NT)
The Northern Territory is yet to make an announcement on feed-in tariffs as a means of subsidising and encouraging solar PV, other than in relation to Alice Springs. In 2006 there was a bid to make Alice Springs a Solar City.
Origin Energy
Origin Energy offers a standard retailer FIT and a boosted one. The company's website states that its best plan is for high-exporting solar customers with an existing solar system.
Energy Australia
Energy Australia offers a 20 cent FiT guaranteed for 2 years. Their ToU tariff consumption rates are better overall than other companies. Energy Australia's rates are typically reviewed annually and they will notify customers before any changes are made.
Click Energy
Click Energy offers a 10c/kWh FiT on some of their plans, but customers may end up paying more in total on their energy bill.
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The Smart Export Guarantee
The SEG is designed to encourage the uptake of renewable generation systems. Under the SEG, eligible renewable electricity generators are paid a cost-based price for the electricity they supply to the grid, similar to the FiT scheme. The main difference between the two schemes is that the SEG does not include a generation rate. However, you don't have to give up your FiT generation payments to sign up for an SEG tariff. The eligible technologies under the SEG are the same as they were for the FiT: solar, wind, hydroelectric, anaerobic digestion, and micro combined heat and power.
Solar is the stand-out star of the SEG, with 99.98% of SEG registrations between April 2023 and March 2024 being for solar installations. The number of sign-ups is skyrocketing, with 283,666 solar homes joining an SEG tariff between April 2023 and March 2024, which was three times more than the previous year.
To sign up for an SEG tariff, you will need a smart meter, which is compulsory. All energy suppliers are legally obliged to install smart meters for their customers, for free. You will also need to fill in an application form for your chosen SEG tariff, which can be found on the supplier's website. Some providers insist that you post completed forms, while others allow you to submit them online. You may also need your system's MCS or Flexi-Orb certificate, a photo of your smart meter, proof of your address, proof that you own your system, and a schematic of your system.
It is important to note that the best SEG rate may not always mean the best energy package. It is recommended that you shop around for the best deal.
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Frequently asked questions
A feed-in tariff (FIT) is a policy mechanism designed to accelerate investment in renewable energy technologies by offering long-term contracts to renewable energy producers.
Many electricity retailers offer competitive feed-in tariffs as part of their standard product range. Some companies that offer feed-in tariffs include NIPSCO, Click Energy, and Synergy.
The best feed-in tariff for you will depend on your specific needs and location. You can compare feed-in tariffs using the Energy Made Easy website or by checking out Canstar Blue’s solar provider customer satisfaction ratings.
Feed-in tariffs offer renewable energy producers a guaranteed, above-market price for the electricity they supply to the grid. This helps to reduce the risks associated with investments in renewable energy projects.
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