How to find the best electricity plan for your solar system
Here are some tips that can help you find a suitable energy provider for a home with solar panels.
Solar panels can meet your daytime electricity needs, especially during the sunniest hours around noon. However, unless you have a home battery system, you will still need electricity from the grid on nights and cloudy days. Ideally, you should look for an electricity plan that charges reasonable tariffs when your solar panels are not productive.
The feed-in tariff is another important factor when comparing electricity plans. Homes tend to have their highest power consumption after sunset, while solar panels reach their peak productivity around noon. As a result, your home only uses a fraction of the power generated by solar panels:
- According to Sustainability Victoria, most home solar systems export 50-70% of their electricity to the grid.
- If you pick an electricity provider with a low feed-in tariff for solar systems, your power bill credits will also be small.
Here are some tips that can help you find a suitable energy provider for a home with solar panels. Electricity plans can be confusing in Australia, and a bad choice will diminish your solar savings. Comparing several options is recommended before making a decision, or you could miss an excellent deal.
1) Look for a high feed-in tariff, but read the small print
Unless you’re at home during the day, most of the electricity produced by solar panels will be sent to the grid. For this reason, getting a favorable feed-in tariff is very important. For example, assume you have a 6.6-kW solar system that produces 10,000 kWh/year, and 50% of that energy is exported to the grid (5,000 kWh):
- With an FIT of 12 cents/kWh, you get a total credit of $600 per year.
- However, with a lower FIT of 5 cents/kWh, the credit drops to only $250.
In this example, a homeowner with the 5 cents/kWh FIT can save an extra $350, simply by switching to the other tariff. The right electricity plan can increase the ROI of solar panels, while shortening their payback period.
However, the feed-in tariff is only one aspect of an electricity plan. You should also check the kWh prices charged when consuming power from the grid, and all terms and conditions included. The following are some examples of electricity plan conditions that can limit your savings, even with a high feed-in tariff:
- Some electricity plans offer a very high FIT, but it only applies for a limited amount of kilowatt-hours. Any electricity exports above that value are credited at a much lower rate.
- There are also electricity plans with a favorable FIT during the day, but a high kilowatt-hour price at night. In these cases, the extra credit earned during the day is being paid back after sunset!
- Some electricity plans also have different pricing for solar owners, which can include a higher fixed charge per day.
These are just two examples of how feed-in tariffs can be negated by other terms and conditions. You should always check electricity plans carefully before signing up – Instyle Solar can help you compare the available options in your location.
2) Estimate your total power bill, not only your solar savings
When comparing electricity providers, focus on the goal of lowering your power bills. If you only look at specific details like the solar feed-in tariff or kWh price, you will miss the big picture.
- A favorable feed-in tariff might increase your power bill credit by $100, but the same electricity plan could be charging you $150 more.
- Your solar savings eem to be higher in this case, but they have actually been lowered by $50 for that billing period.
There are also electricity plans that offer great benefits, but there’s an expiration date when you check the fine print. After a year, you may find that your FIT has been reduced significantly, or that your kWh price is suddenly higher. You can also find electricity plans that offer excellent benefits, but the fine print asks for an early payment – these can work, but only if you never miss the due date.
3) Stay informed about new regulations for the electricity sector
Australia has a dynamic power sector, and regulations are constantly changing. As an electricity consumer, you can know what to expect by staying informed. For example, your state government could change its rules for feed-in tariffs, causing power providers to change their electricity plans.
The Australian Energy Market Commission published new rules for solar exports in August 2021, and these changes will be gradually applied across the National Electricity Market (NEM). Current feed-in tariffs will be replaced by a variety of export options, and your savings could increase or decrease based on how your home uses solar energy.
Solar owners with battery systems will have an opportunity to charge higher FITs under the new AEMC rules. Electricity providers are considering many export options, and one of them is paying a higher FIT during peak hours after sunset – this is not possible for solar panels alone, but a charged battery can supply power at any time.
Read more on our blog!