What are the benefits of solar?
The main benefit of solar panels is the savings you can make on your bills. When you generate your own electricity, you won’t need to buy as much electricity from your retailer.
As an added benefit, most retailers offer a “feed-in tariff” for any unused electricity that you generate and export to the grid. In NSW, retailers can choose whether or not to offer solar feed-in tariffs to their customers.
Who sets the solar feed-in tariffs?
Retailers can decide that level of the solar feed‑in tariff that they offer.
You can compare retailers’ feed-in tariff offers on the Australian Energy Regulator’s (AER) Energy made Easy website.
What is IPART’s role?
To help customers understand how much they could expect to receive from retailers for their solar exports, each year we publish:
- An “all-day” solar feed-in-tariff guide (see previous reviews)
- A guide for the value of solar exports at different times of the day
- The offers that are available in the market at a point in time.
In 2021 we also published a paper about our expectations of solar feed-in tariffs over the longer term.
How can retailers pay me 8 cents for my solar electricity, and then on-sell it onto their customers for 20 cents?
Households are paid for the wholesale electricity that they provide into the grid. We forecast that this is worth 6.2 to 10.4 c/kWh in 2022-23.
However, when this electricity is supplied to other households, retailers must pay charges on each kilowatt hour recorded by their meter. The main charges are to the network operator for using the energy grid. This can be more than 10 c/kWh.
Retailers also have to recover other costs, including:
- around 2.3 c/kWh for their environmental obligations to purchase renewable energy, demand reduction certificates, and paying into the climate change fund
- the costs of their billings services and running their call centres, and other operations.
When these costs are added up, the retail price of electricity is significantly higher than just the cost of the wholesale energy supplied into the grid by households.
What other information does IPART provide?
Our 2021 report provides further information on:
- Bill savings of customers as a result of having solar panels
- Analysis of financial outcomes for customers who install batteries in addition to their solar panels
- The feed-in tariffs that were being offered by different retailers in 2021
- Bill outcomes for the different offers available in the market in 2021.
Where can I find more information?