SA Feed in Tariffs<< Back
I have written about Feed in tariffs before but as that was probably 5 years ago, we might need a refresher.
Feed in Tariffs are what is paid or credited to you by your electricity retailer when you are selling excess solar generation into the grid. Different electricity providers have different rates when you’re buying power and selling power.
This article was prompted as I just got a letter from my electricity provider to inform me that my feed in tariff rate was going to be dropped from 12 cents per kWh (kilowatt hour, is a unit of electricity) to 8 cents per kWh. So, this has prompted me to look around to see if something better is available
Firstly, let’s just go over the basics in relation to the values of electricity whether it’s bought from the grid or created by your solar system.
Ok, so your solar system will generate electricity during the day time and one of two things will happen with that electricity, the house will take what it wants first (power is drawn to load) and excess generation will go in to the grid and you will get credited for that.
Let’s run an example, so you have a 6.6kW system (6600 watts of panels say 18 x 370-watt panels on a 5kW inverter) and its noon on a sunny day and the inverter is making 5000 watts of power (AC) if that stays constant for 1 hour you will have created 5kWh's, now if during that same time period your electrical load (all items that consume electricity) in the house was 3kW, the house would have taken the 3kWh's from the solar and you would have sold 2kWh's to your electricity provider, so you ran the house for an hour from solar power and you sold 2kWh's.
So, this means the kW/hr of electricity generated from the solar system has two values, we value the kWh consumed by the house at the same rate as you are paying per kWh, because if you don’t have solar that is what it will cost you to run the house during the day, REMEMBER you still have to buy electricity at night time when the solar system is sleeping unless you have a battery.
So, in the above example using my current electricity rates I pay 37 cents per kWh when I am buying and I am currently getting 12 cents per kWh when I am selling, so in this example I have saved $1.11 (3 x 37 cents) for that hour and sold 24 cents (2 x 12 cents).
It’s very important that we sell power during the day time as that’s the way we can tackle our night time electrical usage. Right now, if tackling your power bill is the primary motivator for getting solar then what we want to do is have a solar system that is big enough to run the house during daylight hours and during that same day we want to sell enough back to our electricity company to get enough credits up to cover what we have to buy from them at night time.
On your electricity bill it will generally tell you how many kWh you consume on average per day, what that doesn’t do is break it down to daylight hours usage versus night time usage, but you can make some guesstimates to run some numbers for yourselves.
So, lets run a couple of scenarios, we very often do solar for a household where everyone in the house is either at work or school Monday to Friday during most of the daylight hours and generally in the house much more during daylight hours on the weekends.
Let’s say you are averaging 20 kWh's per day and if the split is 7 kWh's during the day (you still have the fridge going and other things left on standby even when no one is home, and be doing breakfast etc) and 13kWh's at night (a very common scenario) the house will take the 7kWh's generated by the solar but in order to cover the 13 kWh's you’re using at night you will need to sell about 39 kWh's to cover the kWh's you need to buy at night. To do this would equate to having about a 10kW solar system
I think by now many will be thinking it’s time to get a battery then, and they would be kind of right in some circumstances, BUT that’s a whole different story I covered in my last news article.
During the last year or so with the whole Covid thing we have started to notice more people working from home and their scenario is very similar to retired people or people at home with young children or carers.
When you’re in the home during the day time you can run more electrical appliances to take advantage of the solar power, like, run your dishwasher and washing machine, ovens, vacuum, AC etc and try to keep night time usage to a minimum this will result in greater savings and most likely mean you can have a smaller solar system than those who are out of the house a lot during the daytime.
So let’s run the same 20 kWh's per day scenario if you’re in the home more during the day. The day time night time split will likely be more like 13kWh's in daytime and 7 kWh's at night time, so the house will take its 13kWh's (on average winter will likely be a bit less) and you will need to buy 7kWh's at night time so the equation is you will need to sell 21/kWh's to cover the 7kWh's plus give the house its 13kWh's so this will equate to about a 8 kW solar system. As a very rough rule of thumb on average you will generate about 4.2kWh's per day from each 1kW of solar installed.
So back to feed in tariffs I have been shopping around and it seems you can get between 8 cents per kWh and 15 cents per kWh, I know because I have just got 15 cents for another 12 months from my provider.
Luckily I found an email I got from them about 6 months ago offering 15 cents for 12 months and when I clicked on the link in the email it took me to a page on the website where I filled in the forms and low and behold I got an email from them the next day to confirm my rate change for the next 12 months, now I think I was lucky there but the moral of the story is it pays to shop around, don’t just accept that when they send you a letter to advise they are changing your feed in tariff you have to accept it, you may have to but it will pay to ring them and or go onto their website and look around to see if they are offering a 12 month deal with a better rate, you may end up changing electricity companies but you will most likely be better off if you do.
I think it’s a bit like the banks, there is no such thing as loyal customers being rewarded with these big entities, in fact it seems the opposite is true, you may need to move around a bit to find the best deals.