Many homes in NSW, VIC and SA that have solar power systems installed and are part of the solar feed-in tariff scheme will soon be having to deal with the extra power costs resulting from the roll back of solar feed-in tariffs. The extra costs could add between $1,500 to $4,000 to some household electricity bills.
What is a feed-in tariff?
There are two basic types of solar power systems, off-grid systems that are stand alone power supplies and on-grid or grid connect systems that have solar panels and a connection to the main power grid.
Grid connect solar power systems are able to use solar electricity from the solar panels during the day, when the sun goes down power can then be drawn form the mains power grid.
During the day however if not all the electricity from the solar panels is being consumed the excess power can be sold back to the grid for use by other non solar grid connected customers, The price paid to the household for electricity fed back into the grid is the feed-in tariff.
Feed-in tariffs, alongside other government schemes such as solar rebates were originally offered to provide an incentive for home owners to install solar power systems. The gains from a feed-in tariff can help shorten the payback time of installing solar. All feed-in tariff schemes are state-based.
How much did the tariffs pay?
Initially when tariffs began they were set at two or three times the retail cost of power with each state setting their own rules regarding the system kW size and the actual tariff rate per kWh fed back into the grid.
Queensland began with 44c per kWh with NSW starting on 60c per kWh, since the beginning rates have dropped considerably and are now down to as low as 5.5c per kWh with a high of 12c in some parts of QLD, the national average is around 6-7c per kWh.
Most of the households that originally signed up for the high starting rates have been able to keep their rate until now.
Regardless of any rebates or tariffs the horse has bolted on the Australian solar market with the market now unstoppable, the introduction of more efficient and lower cost home energy storage systems has given solar power a further boost to sales which in the future will only continue to grow. Some of the extra cash former feed-in tariff beneficiaries are now going to have to spend buying power will most definitely be spent on the installation of hybrid solar and home energy storage systems.
