Feed in tariffs or FiT’s are state based systems that require electricity providers to pay for, or credit, any electricity that a solar system puts into the grid (your local electricity network) based on kW/ hrs(kilowatt hours).
Please note that the FiT in each State varies, below is for South Australia.
The South Australian Feed in Tariff has recently changed. The Essential Services Commission of South Australia (ESCOSA) has released a price determination for the solar minimum retailer payment that applies from 1 January 2016. The minimum retailer payment is 6.8 c/kWh, excluding GST.
One of our customers recently bought in their AGL bill for deciphering and they were being credited 8 cents per kilowatt hour that their system put back into the grid.
Obviously feed in tariffs have been cut substantially in both South Australia and elsewhere but the question remains is solar still a good investment with the changes.
We think it is because although the feed in tariff is now much lower the price of solar power systems is now also much lower meaning the ROI (return on investment) is now roughly the same as what it was when solar power systems were more expensive and feed in tariffs were higher.
What people must remember is that the biggest single solar incentive is the STC’s that are given to new solar systems under the MRET ( Mandatory Renewable Energy Target). This gives you a discount of around $4,000 off the average size residential solar systems reducing the cost of an installed 6kw system from around $11,000 to around $7,000.