If you were one of the many South Australians that got solar early, your system might be on a premium feed-in tariff.
And while the tariff may have served you well before, things change. So just like any investment, its a good idea to take a fresh look at your solar and see if you could be doing better. Read on for all the details, but in simple terms if you have a premium tariff but your bills are still too high, then it’s time to look at upgrading*.
What is the Premium Feed-In Tariff?
A feed-in tariff is the amount of money, or ‘tariff’, that you get paid for every unit of solar energy that you send back to the energy grid. That is, the solar energy that you generate but don’t use.
If you were one of the early adopters of solar in South Australia, your feed-in tariff may be as high as 44 cents or more. This tariff is often referred to as the “premium” feed-in tariff, and was available for solar systems that were approved on or before 30 September 2011. If you’re unsure about the feed-in tariff that you get it’s generally easy to find, just by looking for the words ‘solar’ or ‘feed-in’ on a recent electricity bill.
If you have the premium feed-in tariff of 44 cents or more and don’t make any additions or upgrades to your system, its locked in for your system until June 2028. So if you have the premium tariff, are still seeing good solar feed-in credits on your bills, and your bills aren’t too high, then you’re in a good place and we suggest you keep it that way until things change. But if you’re not, we suggest you keep reading.
Could Losing My Tariff Be Better For Me?
How can you work out if more solar or a battery might actually be better than your feed-in tariff? Well it comes down to your particular circumstances, what you want to achieve, and what your motivations are.
If your motivations are purely about having the latest tech, being environmentally conscious, or having power in the next blackout, then the answer is easy. More solar and a battery could be right for you. Cost-effective options like ZEN Hybrid are available to add a battery and blackout power to your home right now, and ZEN is seeing a large increase in the uptake of these systems compared to previous years. With Government subsidies of up to $6,000 for battery storage available for SA homeowners right now, there has also never been a better time to look at what a battery could do for you.
If your motivations are more financial and about reducing your bills as much as possible, then the answer needs a little more work. And a comparison of your credits against the typical savings of more solar or a battery. Let’s take a closer look.
Low Credits? More Solar!
If your electricity bills are too high and your feed-in tariff credits right now are less than the savings that can be achieved by more solar or a battery at your home, then it’s time to look at upgrading*. To work it out, just follow this three step process.
Gather up your last 12 months of electricity bills, and add up the dollar value of all the feed-in tariff credits you see. Once you’ve done this, you will have your total feed-in tariff credit, in dollars, over the last 12 months. Write this number down somewhere.
Know what a typical solar or battery system in South Australia could be delivering in savings. To get you started, the following table gives an idea of the sort of savings more solar could deliver over the first 12 months of operation, and the savings with a battery as well are just even higher.
|Average Grid Energy Use||First year savings from 3kW solar||First year savings from 5kW solar|
|10kWh per day||$800 to $1200||$1300 to $1600|
|15 kWh per day||$1000 to $1500||$1400 to $1900|
|20 kWh per day||$1100 to $1600||$1500 to $2200|
You can also calculate the potential savings for yourself using our online solar calculator.
Note that the above table assumes a consistent household electricity consumption as listed, that you pay a standard 40c for every kilowatt hour of grid energy you use, and that your new solar panels would be on an east or west orientation with no shading. All figures are approximate only and may not reflect your individual circumstances.
Compare your answer from step one with the solar savings you see in step two.
If your electricity bills are too high, and your total feed-in credits over the last 12 months are lower than the potential savings of more solar, you might be surprised to hear that you could be better off to get more solar or a battery and actually lose your premium feed-in tariff*.
How is this the case when the premium tariff seemed so good? Well, its simple economics and a comparison of two items that deliver savings. If on one hand you have your feed-in tariff delivering you say $500 of savings every year, and on the other hand you have the potential for more solar to deliver you a larger $800 or more of savings every year, which one would you choose? And if you add a battery at the same time, you could get all the added benefits of using solar energy at night, or even having some power in a blackout! Pretty easy, isn’t it?!
If this sounds like you, it might be time to talk to our expert team today. Just click here to request a quote and our team will be in touch to talk through your specific needs. If you are still not sure or a little confused, keep reading as we take you through a worked example with David and Heather.
David and Heather - A Worked Example
David and Heather have a small solar panel system on their roof that they bought from ZEN Energy about 10 years ago. The system receives the premium feed-in tariff, so they get 44 cents of credit on their electricity bills for every kilowatt hour unit of solar energy they send to the grid.
But a lot has changed for David and Heather in the 10 years between when they bought the system and now. And from some simple discussions, they find they could actually be more than $500 better off every year by installing more solar.
When they first bought their solar panels, they were both still working and weren’t home much during the day. Nowadays, they are both semi-retired with Heather running a small consultancy from their spare room. In the last year they also had a new larger air-conditioning system installed across the house to replace the smaller one that just wasn’t keeping up. While they’ve noticed their energy bills creeping up over time, they haven’t taken the time to look into why.
One afternoon Heather decides to look into the bills a bit more, and finds that while the 44 cent feed-in tariff is still there on paper from their retailer, the tariff is now only delivering a few hundred dollars of credits every year. But how has this happened? Well, with all that has changed in the last 10 years, their energy needs and usage patterns have too:
- By being home more during the day, they are now using most of their own solar energy rather than sending it to the grid.
- The larger air-conditioning unit keeps the house more comfortable than the old one did, but it also chews up more electricity.
- With Heather’s consultancy business running from home, the house is also air-conditioned for more hours of the day than it used to be.
- With less solar to send to the grid, and more energy needs to keep comfortable, David and Heather could be better off with more solar or a battery.
Heather decides to go back to the team at ZEN to talk through what she’s found and see what they can do. With a simple review of some recent bills and a look at their home over the phone, ZEN and Heather figure out that they could add another 12 solar panels to their roof through a second solar energy system, and be saving just under $1000 every year from the new system alone.
In other words, David and Heather find that more solar will deliver them more savings than their feed-in tariff. Unsurprisingly they find the decision pretty easy from there – they let go of their premium feed-in tariff, have the new solar installed, and end up more than $500 better off every year.
A premium feed-in tariff of 44 cents or more can seem like the best option. But if you haven’t actually looked at what it’s giving you nowadays, maybe you should.
Just like everything in life, your energy needs and how you use energy will always change, so it’s always a good idea to review where your investment is at and how you could be getting more from it. If you have a system with a premium feed-in tariff, the likelihood is that it is a small system that might still be working well, but just not be matching your current needs.
If your electricity bills are too high, and your last 12 months of feed-in credits are less than the savings you could be making from more solar, then it’s time to talk to ZEN*. With a few simple clicks or a phone call, we’ll talk through your circumstances and see what it best for you.
Request a quote to find out if more solar or a battery could be better than your feed-in tariff
* Adding more solar panels or battery storage to your home is likely to result in you losing your premium feed-in tariff. Whilst your ZEN Energy consultant will make every effort to analyse your situation and talk you through your options, if your consideration of an upgrade is financially motivated, we strongly recommend that you seek independent financial advice when considering your upgrade.