An increasing number of people across the world are using solar energy at home. Not only are they saving money by doing this, but they are also ensuring that the environment suffers little to no harm.
Australia’s New South Wales (or NSW) is no exception, witnessing the most number of solar PV installations in 2020.
But before you go looking for electricity companies offering the best solar feed in tariff NSW, you should learn a little more about what it actually is, how it works and why it is crucial.
What is a solar feed-in tariff?
Several electricity retailers, although not all, have introduced a tariff system. Here, consumers get paid for any extra electricity generated by their solar PV systems. They receive this fee when the electricity they do not use is sent back to the grid.
There are two basic types of tariffs:
- Net feed-in tariff – Customers get paid a fee for every kW/h electric energy they send back to the electricity grid after consuming enough for their personal use. If you use up all the power and nothing is sent back, it will be offset against your regular electricity bill.
- Gross feed-in tariff – Here, customers get paid a fee for every unit of electricity their solar PV systems generate. However, this type of tariff is no longer offered to new connections.
A brief history about feed-in tariffs in NSW
Australia has more than two million home solar PV systems installed, over a hundred and eight thousand of which are in New South Wales. In 2010, the NSW Solar Bonus Scheme offered an incredibly generous 60c per kWh feed-in tariff.
But back then, the idea behind the tariff was to convince more people to switch to solar power. This rate was brought down to 20c per kWh by the end of the same year after a bill was passed in the NSW parliament. By 2011, the government closed doors to new applications.
Currently, there is an open market where solar retailers vie for customers by relying partly on the feed-in tariffs they offer. Subsequently, several folks in NSW are now buying batteries along with a solar system or refitting one to an already existing solar panel.
How solar feed-in tariff helps customers
The following are incredible ways in which solar feed-in tariffs are making a difference in NSW:
- Switching to solar power generation can help save a lot of money, as it helps reduce electricity consumption. Adding a feed-in tariff will only add to this.
- Such tariffs encourage decentralisation, enabling a secure electric connection that is not hampered by malfunctions in the centralised power grid.
- It enables diversification that ensures the electricity supply remains in line with the market demands.
Does New South Wales have a minimum feed-in tariff?
At present, NSW does not have a mandatory minimum solar feed-in tariff. And since it is a highly competitive market, retailers assign values to any exported solar power as they seem reasonable. As per statistics, the current tariff rate is 4.6 to 5.5 cents per kWh for the period 2021-2022.
You can compare the feed-in tariffs offered by various energy retailers in your region to identify the best solar feed-in tariff in NSW. And signing up is easy; you simply need a solar panel or another equivalent renewable energy generator.