Falling feed-in tariffs: Why they're happening and what you can do

We’re entering a period where the wholesale Feed in Tariffs (FiTs) will be very low.

Spring is usually a time of high supply and low demand. Simplistically, this is because there’s usually enough sun to generate a lot of solar power, but it’s not yet warm enough that everyone turns on their aircon. High supply and low demand mean that we expect wholesale power prices to be very low.

This includes times when wholesale prices may drop into negative territory, leading to negative Feed in Tariffs. This occurs when the grid is so well supplied that exporters (including big power plants as well as solar homes) are penalised for exporting energy. These negative tariffs are typically a few cents per kWh.

We expect this period with particularly low or negative FiTs to continue until demand picks up again in the summer period.

Should you try to find a higher FiT elsewhere?

Regardless of your bill amount, being charged to export solar feels bad - you’re being penalised for your solar. For some, this might be enough reason to switch.

For others, it’s about whether they’re better off financially. Depending on your system size and energy usage, this might be with another provider.

For example, if you export a lot more power than you use, then your FiT will be a significant component of your bill, and prioritising finding a high FiT with another provider during the spring season might be your most sensible option.

If you use most of your solar generation within your home, then your feed-in tariff is less important. We think you should prioritise getting the cheapest usage rate for those times you need to use energy outside of when your solar is generating. Since wholesale prices are low, this is likely to be with Amber.

Will feed-in tariffs just keep going down?

While FiTs will continue to rise and fall based on seasonal demand and supply, we think it’s likely that feed-in tariffs will generally trend downwards over the next few years as more solar is added to Australian rooftops.

This decrease won’t be limited to Amber and wholesale, and it’s expected that all electricity retailers will look to reduce the feed-in tariffs they pay out. However, we’re on the verge of a significant increase in demand. As electric vehicle uptake increases and the “electrify everything” movement progresses, there’ll be more demand for your solar exports, and we expect this to eventually lead to a rise in feed-in tariffs.

How can you get the most value from your solar?

1. Use as much of it as you can. During generation hours, it’s worth more to you than it is to the grid. A few small changes can help, like adjusting your hot water system to turn on during the day, or if you have a controlled load, switching your hot water heater from a controlled load to your general consumption meter.
2. Electrify everything to use even more. If it makes sense for your household, you could consider electrifying your home by switching from gas, getting a heat pump, or even an electric vehicle. For more information, check out Rewiring Australia.
3. Explore emerging technical solutions for minimising exports during negative FiT. Amber is working on enabling “solar curtailment” for different inverters. Tell us about your inverter (fill in this form) and if your inverter is supported, we’ll enable solar curtailment. If your inverter is not yet supported, we’ll notify you when it is.
4. Make your excess solar more valuable with a home battery. Excess solar is low-value during generation hours, but high-value outside those hours, especially when demand increases and coal and gas ramp up to meet that demand. Home batteries allow owners to sell their green energy at fossil-fuel prices (all while reducing the demand for fossil-fuels)! This is the next step in the transition to 100% renewable energy - taking Australia’s massive solar generation and making it available outside generation hours. This is also core to Amber’s mission; our Amber for Batteries technology automates batteries to get maximum value for our battery customers by exporting battery power when the grid most needs and values it.