The Best Solar Feed-In Tariff in NSW & How It Can Eliminate Your Power Bill
In New South Wales, the Solar Feed-in Tariff (FiT) is the amount your energy retailer pays you for any excess electricity your solar system exports to the grid. While this payment can contribute to lowering your power bills, the main financial benefit of solar comes from using the electricity you generate directly in your home, reducing the amount you need to buy from your retailer.
In this guide, we’ll explain how the feed-in tariff works, how to maximise your savings, and how the right solar setup could eliminate your power bill altogether.
Key Takeaways:
Self-Consumption Offers the Highest Value – The greatest financial benefit from solar in NSW comes from using the electricity your system generates rather than exporting it to the grid. Every kWh used in the home saves you 22–30 cents, whereas exported electricity typically earns just 8–16 cents per kWh through the feed-in tariff.
Oversizing Your Solar System Can Eliminate Your Bill – Installing a larger solar system (e.g., 10kW) can significantly reduce, or even eliminate, your power bill. Even if only 50% of the energy is used at home, the combination of savings and feed-in tariff credits can bring your annual energy costs close to zero.
Battery Storage and Time-of-Use Tariffs Enhance Savings – Customers are increasingly pairing solar energy with battery storage or opting for time-of-use tariffs. These strategies help shift energy usage to when solar is most effective or electricity is cheapest, further lowering bills and improving return on investment.
Investing in Quality Solar Pays Off – A high-quality solar system with reputable components (like Enphase microinverters) offers better performance, safety, and longevity. This results in a fast payback period of 3–5 years and long-term savings of up to $100,000, making cheap systems with uncertain warranties a poor risk.
What is a Solar Feed-In Tariff?
A Feed-in Tariff is the price your electricity retailer pays you for each kilowatt-hour (kWh) of excess solar energy your system sends to the grid. In NSW, solar energy powers your home first; only unused energy is exported. For every kWh of solar you use in your home, you save the full cost of buying electricity from the grid, often far more valuable than what you earn by exporting it.
In other words: Self-consumption = bigger savings.
Solar Savings vs Feed-In Tariff: Which Matters More?
When calculating solar savings, it’s important to understand your electricity billing structure, as it affects how much money you’ll save:
Time of Use Billing
Many households in Ausgrid are now billed based on what time they use the electricity, known as time-of-use billing.
If you have time-of-use billing, take the average of your peak and shoulder rates to roughly estimate how much solar power will save you. The off-peak rates don’t matter when calculating what you’ll save, since solar power doesn’t work during these hours (10 pm to 7 am).
We estimate that on average solar will save you around 30 cents a kWh plus GST.
Flat Rate Billing
If you pay a flat rate for your power, this is the amount of money solar will save you for every kWh used in the home. Typically the rate in Sydney is around 22 to 25 cents a kWh plus GST.
Feed-In Tariff Rates in NSW
If the solar power you generate isn’t used in your home, it’s automatically fed out to the grid, and your energy retailer may pay you a feed-in tariff. Typically, this feed-in tariff is around 8 cents a kWh. However, there are some deals around where the feed-in tariff is even higher, for example, 10 cents a kWh on the Solar Promise plan with Energy Locals.
Some retailers won’t pay you anything, so it’s important to shop around and find the best deal.
It quickly becomes apparent that saving 22-30 cents a kWh off your energy bill is a better deal than earning around 8-12 cents from the Feed-In Tariff in NSW.
This is why we strive to accurately size a solar system, allowing you to utilise as much of the solar power as possible in your home. A solar system that is too large will inevitably send a significant amount of solar power back to the grid. However, this isn’t always a bad thing. We now have many customers oversizing their solar systems to minimise their power bills, and more information on this strategy is available here: No Power Bills With Solar Power.
Remember, for the excess energy you’ll be earning around 8-12c/kw instead of saving 25-30c/kw off your bill. This can significantly impact how long it takes you to earn or save enough to justify your solar system.
Why Bigger Solar Systems Are Now the Norm
The way people are approaching solar power is getting interesting. The average system we are installing these days is around 8kW to 10kW, both with and without battery storage.
Previously Australian homes were installing smaller systems, this increase in solar installed per home is an interesting trend that is continuing to develop.
Some of the main reasons why so many people are installing larger systems include:
Solar panel prices are at record lows (allowing homeowners to afford higher-quality panels).
Future-proofing for electric vehicles and home electrification.
Electricity prices remain among the highest in the world, and continue to rise.
Battery storage is becoming more affordable.
Retailers are offering higher FiTs than ever before.
16-Cent Solar Feed-In Tariff
The larger energy retailers in Sydney, such as Origin Energy and Energy Australia, are currently offering a 16-cent feed-in tariff for households with an existing solar system.
Origin Solar Boost
Our higher than standard feed-in tariff
Available to eligible Origin customers (new or existing) who already have a solar system
All Other Plans
Our standard retailer feed-in tariff
Can be paired with any electricity plan you choose
It appears that you need to sign up for a 2-year contract to receive the favourable feed-in tariff. Additionally, there are some small fees to consider, such as a late payment fee of $12.
But let’s not get too deep into the numbers, as they will probably be a little different based on your postcode and individual circumstances.
What’s more important is to see how you can take advantage of an offer like this to eliminate your power bills and get a really good return on the money you invest in solar.
Example: How a 10kW Solar System Could Eliminate Your Power Bill
Let’s get into the numbers:
A 10kW solar system in Sydney will output around 40kWh a day, on average, doing more in summer and less in winter:
You could plug your own numbers into this equation, but for now, let’s assume you use around 20 kWh a day during the daytime, which will mean, on average, you are only able to use 50% of the solar power as it is generated. Typically, this would mean installing a smaller system, such as a 5 kw array or similar.
Usually, a 10kW solar system outputting so much more power than you need would be considered overkill, because you should be using or storing as much solar power as possible as it is generated. But that was when feed-in tariffs were around 5-8 cents per kWh.
With such high feed-in tariffs now available, it makes good sense, both financially and in terms of dollars and cents.
Assuming 50% of your power is used in the home and your cost of power is 30 cents per kWh, you will save 30 cents x 20 kWh a day. Over a year, that’s 7,300 kWh, resulting in a $ 2,190 reduction on your power bill. Importantly, you won’t see this on your bill. It will be $ 2,190 less than what it would have been without solar.
The other 50% of the 40kWh produced by your solar system gets sent out to the grid because you didn’t use it, where you get an $1168 credit on your power bill per year based on that juicy feed-in tariff of 16 cents.
The total yearly benefit of a 10kW solar system using only half of the power = $3,358
Throw in rising power costs and 3% inflation, and you are set to save up to and over $100,000 over the 25-year life of the system. Not bad!
This provides a return on your investment in just over 3-5 years, based on a high-quality $12,000-$16,000 solar system. This is why many of our customers are upgrading to top-of-the-range 1KOMMA5° panels and Enphase micro-inverters.
In the long run, it makes good sense to pay a bit more for a 25-year warranty on the panels, as this provides increased safety, performance, and reliability. This is especially true if you are planning to live in your house.
The Risks of Cheap Solar
A 3-5 year return on your money with a top-quality system is also why wading into the murky waters of the cheaper end of the solar industry is no longer worth even considering. Why risk it with a cheap system when you can achieve a significant return on your investment with well-established brand names?
It doesn’t make sense to try and shorten your R.O.I. from 3.2 years to 2.5 years, knowing that around 1 in 5 solar systems are deemed defective by the CEC every year, and an incredible 1 in 3 systems across Australia are estimated to no longer have warranty support because the installer and/or the manufacturer have disappeared.
How to Actually Eliminate Your Power Bill
Right, back to the numbers.
Because we love round numbers, let’s assume you use 10kWh of power at night for a total of 30kWh a day.
This is a fairly typical day-night distribution because when you have solar power installed, you tend to run your appliances as much as possible during the daytime, such as the dishwasher, washing machine, and air conditioner. It’s free after all!
So, based on the price you are charged for power (in this example, 30 cents a kWh), the 10 kWh at night costs you = $1095.
The daily supply charge adds up to $315 a year, which, so that you know, can be covered by 1.5kW of solar (86 cents a day can be paid for by sending 5.4kWh of power to the grid and getting paid 16 cents a kWh for it. 1.5kW of solar will output around 5.5kWh of power a day in Sydney).
This gives you a total yearly electricity cost of $1410 (night-time electricity usage of 10 kWh + your daily supply charge).
From your $ 1,410 bill, you then receive the feed-in tariff reduction of $ 1,168, leaving you with a quarterly power bill of only $ 242. Happy days.
And you’ve only used half the solar power your system produces. You can do even better if you use more solar power as it is generated, say around 70-80%. This isn’t all that hard, thanks to the advanced monitoring that comes with an Enphase system. You get both system monitoring and consumption monitoring so you can see how much of your energy usage is covered by your system at any one time.
It's no wonder that so many of our customers are emailing us to express their happiness with their solar system.
Other Alternative Strategies
This is only one strategy our customers are using to make the most of their solar system.
Just to give you more context, many of our customers prefer to go onto time-of-use tariffs where power during the afternoon is more expensive, but it is much cheaper overnight. They install panels both north and west to cover their power consumption right up to sunset, then use power during the off-peak billing period which might be from 10 pm to 7 am, as an example.
There’s more than one way to skin a power bill!
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