Do You Get Paid For The Energy You Generate?
Rooftop solar saves money by reducing your electricity bills or – with a large enough system – by eliminating them so you instead receive credit on your electricity bill.
Solar saves money in two ways:
- During the day it reduces or eliminates the need to use grid electricity.
- Surplus solar energy not used by your home is exported to the grid for a feed-in tariff.
Using solar energy as it’s generated normally saves far more money than sending the same energy into the grid. This makes shifting electricity consumption to when solar power is available an effective way to maximize savings.
To get an idea of how much electricity is exported in an Aussie home with 6 kW of solar panels, have a look at this graph. It’s for my Adelaide home in autumn, back in 2020 before I expanded my system:
The spiky purple shape shows the total electricity use over 24 hours for my home on that day.
The yellow shape is the output from my north-facing 6 kW solar power system. Today most installations are 6.6kW solar systems or larger.
When household consumption is being met by solar the colour of the purple spikey shape changes to brown.
By looking at where the 2 shapes overlap we can see the 2 types of electricity bill savings quite nicely.
1) Using the solar electricity in your home (aka “offsetting”)
As the graph shows, from an hour or so after sunrise most electricity consumption is met by solar. There are some spikes in the morning where consumption is high enough for some power to be taken from the grid, but the home is mostly solar powered in the morning and is entirely solar powered through the afternoon until shortly before sunset.
The savings from using one kilowatt-hour (kWh) of solar electricity are equal to whatever the cost of buying that kWh from the grid would be. At the moment, in Adelaide, grid electricity is around 40 cents per kWh.
Whenever my home is using solar electricity instead of grid electricity it’s saving me money. But what about solar electricity that I don’t use in the home?
2) Exporting your electricity into the grid, building a credit.
The yellow area in the above graph is solar power exported to the grid.
At these times of day, my solar panels produce more electricity than my household is using and that energy flows out of my home and into the grid, providing clean energy for others to use.
My electricity meter is configured to export energy (which it should be on all solar homes!) and my bill receives credit for each kWh exported. By how much? Well, that depends on where you are and which electricity retailer plan you have. At the moment, in South Australia, feed-in tariffs typically range from zero to 8.5 cents.
If you are getting a pittance for your electricity I recommend finding a better retailer plan. But if you live in WA, NT, or regional QLD, you either won’t have any options, or they’ll be very limited. For everyone else, comparing retailers is an essential part of maximising your savings.
So it’s really important to compare electricity plans to make sure you get the best overall deal. Bear in mind the highest feed-in tariff won’t necessarily be the best overall plan, so check the fine print.
It’s also vital to get a written quote from your installer on how much grid electricity consumption they expect your new solar system will offset and how much you’re likely to export.
You can check the latest state-by-state solar feed-in tariff information here.
If you want to see how the feed-in tariff in your state will affect the payback of a quoted solar system, have a play with our Solar Payback Calculator