How Does Solar Power Work In Sydney? (Video)

How Does Solar Power Work In Sydney?

How Does Solar Power Work In Sydney?

I was told the feed-in tariff doesn’t matter, but I don’t understand. I thought that was the whole point of going solar.

It’s been quite a while now since we had those really big rebates on the feed-in tariff. They were 60 cents a kWh, but that’s long gone now. Back then solar was seriously expensive, and they did a great job of making solar more affordable.

The way solar power works in Sydney these days is all of the solar energy is directed into your home to be used immediately.

By using solar power, you’re not buying electricity from the grid, and that directly reduces your power bill. And importantly with that, you’re not actually going to see the saving on your bill as a line item, it’s just gonna be a smaller bill.

Say for example you have an $800 quarterly bill, and then you go and install a good-sized solar system, it may reduce your bill by $400 a quarter. In that case, your bill will just be $400.

But then there is also a feed-in tariff. So if you don’t use the solar power in the home as it’s being generated (and you don’t have battery storage), then the solar power will go straight out to the grid and you’ll get paid a feed-in tariff by your energy retailer.

This is not a rebate, but a part of the agreement you have with your energy retailer. The FITs bounce around a bit, they’ve been up over 20 cents per kWh before, but these days they’re somewhere between 5 and 10 cents. I think a lot of retailers at the moment are around about 7 cents, a kWh.

And so obviously with the price of power at the moment being a lot more than 7 cents a kWh (and it’s on the way up), in fact in the peak billing period if you’ve got time-of-use billing, it is often well over 50 cents a kWh. So it’s much, much better to save 50 cents in that example, compared to getting a 7 cent credit on your bill.

And so what we say is we want the feed-in tariff on your bill to be as small as possible, because that means you’re using most of the solar power in the home as it’s being generated.

In this example, if you’re $800 bills now $400, we’d only want to see a $20 or $30 credit on your bill from your feed tariff, because that means that you’re really making the most of the power that you’re generating.

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