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Quick Summary
Or Are You Giving Power Away?
If you have solar panels or are thinking about getting them, you’ve probably come across the term “feed-in tariff.” While that sounds like confusing energy-industry jargon, it’s pretty straightforward. A solar feed-in tariff is the amount your electricity retailer credits you for excess solar electricity sent from your home to the grid.
These credits can reduce your electricity bill, but exporting solar is not always the most valuable use. For many Australian households, the greatest savings come from using solar power as it is generated. This lowers the amount of electricity you need to buy from the grid, which usually costs more than the credit you receive for exporting excess solar. By shifting more of your electricity use to daylight hours, you can get more value from your solar system and further reduce your energy bills.
What Is a Solar Feed-in Tariff?
When the sun shines, your solar panels generate electricity that powers your home first. This keeps your fridge humming, washing machine spinning, pool pump churning, and air conditioner, hot-water system, or home-office equipment running smoothly. If you produce more electricity than your household needs, the surplus flows to the electricity grid.
Your electricity retailer then credits your bill for each kilowatt-hour (kWh) exported. The amount paid per kWh is your feed-in tariff. If your retailer pays 5 cents per kWh and your home exports 10 kWh, you receive a 50-cent credit. If you exported that amount every day, it would provide approximately:
- $3.50 per week
- $15.20 per month
- $182.50 per year
While that credit is handy, it is only part of the story. The same electricity is more valuable if used in your home.
Where Do the Biggest Solar Savings Come From?
Solar creates financial value in two ways. First, you save money by using solar electricity directly instead of buying from the grid. Second, you receive feed-in tariff credits for surplus solar electricity exported to the grid. The first option is generally more valuable.
Imagine your retailer charges 35 cents per kWh for grid electricity but pays a feed-in tariff of only 5 cents per kWh. If you use one kWh of solar inside your home, you avoid buying that electricity for 35 cents. If you export that same kWh, you receive a credit of about 5 cents. In this example, using the electricity inside your home is worth seven times as much as exporting it. A solar system's success shouldn't be measured only by how much electricity it produces or exports. What matters is how much expensive grid electricity the system helps you avoid buying.
The 5-Cent Versus 35-Cent Problem
Here is an easy way to understand solar savings. Your panels generate electricity during the day. You export a spare kWh and receive 5 cents from your electricity retailer. Later that evening, when your panels stop producing, you buy 1 kWh from the grid at 35 cents.
You have sold electricity cheaply and bought it back at a higher price. It is not literally the same unit returning to your home, but financially the result is similar. The larger the difference between your feed-in tariff and grid rate, the more valuable solar self-consumption becomes.It doesn't mean exporting solar is pointless. Electricity you don’t need can still earn a credit. It means exporting should generally be the second-best outcome after using solar inside your home.
An Example of Daily Solar Savings
Consider a household whose solar system generates 25 kWh in a day. The home uses 10 kWh of that solar electricity directly and exports the remaining 15 kWh. Using an illustrative grid rate of 35 cents per kWh and a feed-in tariff of 5 cents per kWh:
- The 10 kWh used inside the home avoids $3.50 in grid electricity costs.
- The 15 kWh exported earns a feed-in tariff credit of 75 cents.
- The total estimated value of the solar electricity is $4.25 for the day.
If that pattern remained consistent throughout the year, the system would provide approximately $1,551 in annual value. Now imagine the household runs several appliances. Instead of using 10 kWh of solar directly, it uses 15 kWh and exports the remaining 10 kWh.
The solar system has not grown. The weather has not improved. The panels have not produced more electricity. Using 15 kWh inside the home avoids $5.25 in grid electricity costs. Exporting 10 kWh earns a feed-in tariff credit of 50 cents.
- The total estimated value rises to $5.75 for the day.
If that pattern remained consistent, the annual value would increase to approximately $2,099. That is around $548 more each year from the same solar system because the household used more of its solar electricity before it left the property.
What Is Solar Self-Consumption?
Solar self-consumption is the percentage of your solar generation used directly inside your home. If your panels generate 20 kWh during the day and your household uses 8 kWh, your self-consumption is 40%. The remaining 12 kWh is exported to the grid.
A higher self-consumption rate often improves the financial return from solar because every additional kWh used inside the home reduces the full-priced grid electricity you need to buy. However, higher self-consumption does not mean wasting electricity. Turning on appliances you don't need doesn't save money. The goal is to shift necessary electricity use to hours when your panels produce.
How Much Could Increasing Solar Self-Consumption Save?
The value of self-consumption depends largely on the gap between your electricity usage rate and your feed-in tariff.
Using the same example:
- Grid electricity costs 35 cents per kWh.
- The feed-in tariff pays 5 cents per kWh.
- Using one kWh of solar instead of exporting it creates an additional 30 cents in value.
If you move 5 kWh of daily electricity use into solar-producing hours, the additional value could be:
- $1.50 per day
- Approximately $45.60 per month
- Approximately $547.50 per year
Over ten years, that change could represent about $5,475 in additional value. This is an illustrative estimate. Actual results will vary with electricity prices, feed-in tariffs, seasonal solar production, household consumption, and system performance. It shows why small changes in household routines can have a meaningful long-term effect.
Your Roof Produces Power—Your Routine Determines Its Value
A large solar system does not automatically lower your electricity bill. Two neighbouring homes with identical solar systems can have different bills. One household uses most electricity during the day, while the other relies on the grid after sunset.
The first household may run its dishwasher, washing machine, pool pump and hot-water system while its panels produce power. The second household may export most daytime solar and run the same appliances at night. Both systems may produce the same electricity. The difference is how the electricity is used after generation. Solar hardware matters, but household habits, appliance schedules and electricity-plan settings also influence the final result.
Practical Ways to Increase Your Solar Savings
You do not need to use less electricity. Often, you just need to change when you use it. Appliances to run during solar hours include:
- Clothes dryers
- Dishwashers
- Pool pumps
- Electric hot-water systems
- Air conditioners
- Electric vehicle chargers
- Dehumidifiers
- Home-office equipment
- Heat-pump water heaters
- Robotic pool cleaners
- Rechargeable garden equipment
- Battery-powered tools and appliances
If you leave home early or don’t want to spend your day switching appliances on and off, timers and delayed-start functions can handle much of the work. Smart plugs, solar diverters and home energy-management systems offer more control. Some systems automatically direct surplus solar to hot water, battery storage or EV charging instead of exporting it.
Do Not Run Everything at Once
Moving appliance use into daylight hours can improve solar self-consumption, but it helps to stagger high-consumption appliances. Suppose your panels generate 4 kW. If your dishwasher uses 1 kW and your pool pump 1.2 kW, solar can cover both comfortably.
If you also turn on a large air conditioner, clothes dryer and EV charger, the combined demand may exceed the electricity generated. Your home will import grid electricity even when the sun is shining. A simple schedule can help:
- Run the dishwasher after breakfast.
- Start the washing machine later in the morning.
- Run the dryer around midday if required.
- Schedule the pool pump across the strongest solar hours.
- Charge the EV when other major appliances are not operating.
- Pre-cool or pre-heat the home before the evening peak period.
The best schedule depends on your system size, weather, appliance loads and household routine.
How Much Can Feed-in Tariffs Reduce an Electricity Bill?
The value of your feed-in tariff depends on how much electricity you export and what your retailer pays. At a feed-in tariff of 5 cents per kWh:
- Exporting an average of 5 kWh per day would earn approximately $91.25 per year.
- Exporting 10 kWh per day would earn approximately $182.50 per year.
- Exporting 15 kWh per day would earn approximately $273.75 per year.
- Exporting 20 kWh per day would earn approximately $365 per year.
- Exporting 25 kWh per day would earn approximately $456.25 per year.
Those credits help offset your bill, especially during high-production months. However, the figures show why exporting a large amount of electricity does not always deliver the best financial return. At 35 cents per kWh, using an extra 5 kWh of solar each day could avoid about $638.75 in grid electricity purchases each year. Exporting that same amount at 5 cents per kWh would earn only $91.25.
Why Are Feed-in Tariffs Lower Than Electricity Usage Rates?
It can feel unfair to get only a few cents for solar electricity while paying much more to buy electricity from the grid. However, the retail price covers more than the energy itself. It includes network infrastructure, poles and wires, billing, metering, wholesale costs, environmental obligations, and retailer operating costs.
Feed-in tariffs generally reflect the value assigned to exported electricity rather than the full cost of supplying electricity to a household. That explanation may not make a low tariff feel more generous, but it helps explain why the amount paid for exported solar is usually less than the amount charged for imported electricity.
Could a Higher Feed-in Tariff Save You More?
A higher feed-in tariff can increase your export credits, but it does not guarantee you have found the cheapest electricity plan. Electricity retailers know a high feed-in tariff attracts solar customers. However, the plan with the highest export rate may also include:
- Higher grid electricity usage rates
- Higher daily supply charges
- Premium rates that apply only to a limited amount of exported electricity
- Lower rates once the export limit has been reached
- More expensive evening or peak-period electricity
- Eligibility conditions based on system size
- Requirements to purchase the solar system through a particular provider
- Fixed benefit periods that later expire
Suppose you export 10 kWh per day. Increasing your feed-in tariff from 5 cents to 8 cents would earn an extra 30 cents daily, or about $109.50 per year. That sounds worthwhile, but if the new plan raises your daily supply charge by 35 cents, the higher charge would cost about $127.75 more per year.
In that situation, the plan with the more attractive feed-in tariff could leave you worse off overall. Always compare the full plan, including usage rates, supply charges, time-of-use periods, export limits, discounts, and conditions.
Fixed, Variable and Time-Varying Feed-in Tariffs
Not every feed-in tariff works in the same way. A flat feed-in tariff pays the same rate whenever you export solar electricity. A time-varying feed-in tariff changes depending on when electricity enters the grid. Exports may earn less during midday, when many solar homes produce excess electricity, and more during periods of higher grid demand.
Some plans offer a premium rate for the first few kWh exported each day, followed by a much lower rate for additional exports. These plans suit some households and perform poorly for others. A home exporting a small amount daily may benefit from a limited premium tariff. A home with a large system and substantial exports may find most of its electricity is paid at the lower rate. The headline rate should never be considered without reading the conditions attached to it.
Why Is My Feed-in Tariff Credit Lower Than Expected?
A lower-than-expected credit does not necessarily mean your solar panels are underperforming. Your system may generate a large amount of electricity while your home consumes most of it directly. Since that electricity never leaves the property, it will not appear as an export credit on your bill.
Other possible reasons include:
- Seasonal changes in solar production
- Cloudy or wet weather
- Shading from trees or nearby buildings
- Higher daytime electricity consumption
- Export limits applied to the system
- A lower feed-in tariff than expected
- An expired introductory tariff
- Incorrect billing or metering information
- Inverter faults or system-performance issues
Y
our electricity bill shows exported electricity, but it may not show your system’s total generation. For that, you will need to check your solar inverter or monitoring app.
What Is a Solar Export Limit?
Some electricity networks restrict how much solar electricity a property can export at one time. Your solar system may produce 10 kW, but the network may allow only 5 kW to be exported. Your home can still use the electricity generated. However, exports above the approved limit may be restricted.
Export limits make self-consumption more important. If surplus electricity cannot be exported, it may be curtailed unless redirected to an appliance, hot-water system, EV charger, or battery. The solar system must be designed with local network requirements in mind. A larger system is not always more valuable if the household cannot use, store, or export the extra production.
How Can a Battery Change Your Solar Savings?
A battery stores surplus solar electricity for later use. Instead of exporting all your excess solar during the day, you can use some after the sun goes down. For example, suppose 10 kWh of excess solar would otherwise be exported for 5 cents per kWh.
Exporting that electricity would earn 50 cents. If the stored electricity later replaced 10 kWh of grid power costing 35 cents per kWh, its potential value would be $3.50. This creates a gross difference of up to $3 per day or $1,095 per year. This is not a guaranteed battery saving. A proper assessment must also consider energy charging and discharging losses.
- Usable battery capacity
- The amount of surplus solar available
- Evening and overnight electricity consumption
- Seasonal changes in solar production
- Grid and feed-in tariffs
- Battery purchase and installation costs
- Expected lifespan and warranty coverage
- Available rebates, loans or incentives
- Backup-power requirements
- Whether the battery can charge from the grid
- Virtual power plant conditions, if applicable
A battery may provide benefits beyond bill savings, including backup power, increased energy independence, and protection from future electricity-price increases. These benefits matter but should not replace a realistic calculation using your actual household data.
Does a Low Feed-in Tariff Make a Battery Automatically Worthwhile?
Not necessarily. A low feed-in tariff increases the value of storing solar rather than exporting it, but a battery still needs enough surplus solar to charge and enough evening consumption to discharge regularly. A household that uses little electricity after sunset may not fully use a large battery. A household with heavy evening air-conditioning, cooking, hot-water, or EV-charging demand may use stored energy more consistently.
Battery size also matters. Installing more storage than your household can regularly fill and empty may extend the financial payback period. The best battery is not always the largest. It is the one matched to your solar production, consumption patterns, electricity tariffs, and goals.
Can an Electric Vehicle Increase the Value of Your Solar?
An electric vehicle can become one of the largest flexible loads in a solar-powered home. If the vehicle is at home during the day, charging it with surplus solar may be considerably more valuable than exporting that electricity for a low feed-in tariff. Smart EV chargers adjust charging speed based on available solar production, helping reduce grid imports.
For households where the vehicle is away during the day, scheduled weekend charging, workplace arrangements or battery storage may influence the calculation. The principle remains the same: the more necessary electricity use you can align with solar production, the more value you may retain inside the household.
How to Estimate Your Feed-in Tariff Credits
You can estimate your annual feed-in tariff credit using this formula:
Average daily solar exports × feed-in tariff × 365
For example:
12 kWh × $0.05 × 365 = $219 per year
To estimate the value of the solar electricity used directly inside your home, use:
Average daily solar self-consumption × grid electricity rate × 365
For example:
10 kWh × $0.35 × 365 = $1,277.50 per year
In this scenario, the combined estimated annual value would be:
$219 in export credits + $1,277.50 in avoided grid purchases = $1,496.50
This is a much more useful way to assess solar than looking at feed-in tariff credits alone.
Where Can You Find Your Solar Export Figures?
Your electricity bill should show how much solar electricity was exported during the billing period. It may appear under terms such as:
- Solar exports
- Feed-in tariff
- Solar credit
- Exported energy
- Renewable energy credit
- Energy sent to grid
Your solar-monitoring app shows total solar generation. Some monitoring systems also separate household consumption, grid imports, grid exports and battery activity. These figures answer different questions:
- Solar generation tells you how much electricity the system produced.
- Solar self-consumption tells you how much of that electricity the home used.
- Solar exports tell you how much was sent to the grid.
- Grid imports tell you how much electricity the home still purchased.
Looking at all four provides a far clearer picture than judging the system by the credit appearing on your bill.
Can Solar Eliminate Your Electricity Bill?
Solar can substantially reduce household electricity costs, but you should never assume a zero-dollar bill. Even a home that exports large amounts of solar may still pay for:
- Electricity imported at night
- Grid electricity used during cloudy weather
- Daily network supply charges
- Peak or time-of-use electricity
- Metering charges
- Other retailer or plan fees
A household can export more electricity than it imports in total and still receive a bill. This can happen because exported electricity is credited at a much lower rate than imported electricity is charged. For example, exporting seven kWh at 5 cents earns 35 cents. Importing just one kWh later at 35 cents can cancel out the value of all seven exported kWh. That is why the number of exported units alone does not determine whether your bill reaches zero.
What Should You Look at Before Installing Solar?
A good solar recommendation should consider more than roof space and panel count. Before choosing a system, look at:
- Your annual electricity consumption
- When your household uses the most electricity
- Your daytime and evening usage
- Whether you have electric hot water
- Pool-pump operating hours
- Air-conditioning use
- Future EV charging
- Plans to replace gas appliances with electric alternatives
- Available roof space and orientation
- Shading throughout the day
- Local export limits
- Current electricity rates and feed-in tariffs
- Whether battery storage may be added later
A system designed around your actual consumption is more useful than one selected only because it fits a package size or produces an impressive generation estimate. A solar feed-in tariff is the credit your electricity retailer provides for surplus solar electricity exported to the grid. It can help reduce your electricity bill, but it is rarely the largest source of solar savings. If you receive 5 cents for exporting one kWh but pay 35 cents to purchase one kWh later, using your solar electricity inside the home can be seven times more valuable than exporting it.
That is why effective solar is not just about putting panels on a roof and producing as much electricity as possible. It is about matching solar production with the way your household uses energy. Running suitable appliances during the day, staggering high-consumption loads, monitoring system performance, comparing electricity plans carefully and assessing battery storage against real usage data can all help you retain more of the value generated on your roof.
The goal is not to export the most electricity. It is to purchase less expensive grid power—and make every unit of solar work harder for your household.
Frequently Asked Questions
What is a solar feed-in tariff?
A solar feed-in tariff is the amount your electricity retailer pays for each kilowatt-hour of excess solar power your system sends back to the grid. The credit appears on your bill and helps offset the power you buy from the grid.
How much is the average solar feed-in tariff in Australia?
Feed-in tariffs vary by electricity retailer, plan, and state. Some plans offer a higher rate but charge more for grid electricity or daily supply. Compare the entire electricity plan rather than choosing one based only on its feed-in tariff.
How much can I save with a solar feed-in tariff?
Your savings depend on your feed-in tariff rate and how much solar electricity you export. Feed-in tariff credits are usually only part of your total solar savings. Most households save more by using their solar power at home and buying less electricity from the grid.
Is it better to use solar power or export it to the grid?
In most cases, using your solar power at home provides better value. Grid electricity usually costs much more per kilowatt-hour than retailers pay for exported solar. Running appliances during daylight hours can save more than exporting the same electricity.
Why are solar feed-in tariffs getting lower?
Australia produces a large amount of rooftop solar electricity during the middle of the day. When supply is high and demand is low, exported solar is less valuable to the grid. This is one reason feed-in tariff rates have fallen in many areas.
Can a solar battery increase my savings?
A battery can store excess solar electricity generated during the day for use at night or peak periods. This may reduce the electricity you buy from the grid, but whether a battery delivers worthwhile savings depends on your energy use, electricity rates, system size, and battery cost.
Should I choose the electricity plan with the highest feed-in tariff?
Not necessarily. A high feed-in tariff may come with higher usage charges, daily supply fees, or export limits. Compare the full plan and consider when you use electricity, how much solar you export, and how much grid power you still buy.
How can I get more value from my solar system?
Use energy-intensive appliances during daylight hours where practical. This may include running the dishwasher, washing machine, pool pump, hot-water system, or air conditioner while your panels generate electricity. A reputable solar company such as Stag Electrical can also review your usage and recommend whether system optimisation, additional panels, or battery storage could improve your savings.
