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How Much Can You Save with Solar Panels?


The amount of money you can earn (or save) through solar panels depends on two main factors:

  • The scheme that your State Government has set up to reward you for solar electricity that you export to the grid AND
  • Your household’s power usage patterns.
  • State Government Solar Power Schemes

    Each state government has in place a scheme for paying households for the solar electricity that they generate. The amount that you get paid for exporting electricity to the grid is called a Feed in Tariff. In some states the government sets the rates, while in others individual electricity retailers are allowed to set their own rates.

    There are two types of Feed in Tariff – which one applies to you depends on whether you have gross metering or net metering in place.

    Gross Feed-In Tariff

    A gross feed-in tariff applies to households operating under gross metering. Under this scheme, you feed all of your solar electricity back to the grid, and you get a set rate for each kw/h of electricity that your panels generate. The amount you earn from a gross feed-in tariff has nothing to do with how much electricity you consume.

    Net Feed-In Tariff

    A net feed-in tariff applies to households operating under net metering. Under this scheme any solar power that you generate at a particular point in time goes towards satisfying your own electricity needs at that time of day first. You then get paid for any surplus electricity that you feed back to the grid.

    A few years ago ACT and NSW had gross feed-in tariffs, however all states and territories have now switched to net feed-in tariffs for new installations. As of 1 January 2017, all NSW households that had been receiving gross feed-in tariffs were moved over to net feed-in-tariffs. These households will need to switch to net metering to maximise their savings from solar. ACT households on gross feed-in tariffs will continue to receive these as per normal.

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    Savings Under Net Feed-In Tariffs

    How much you save on a Net Feed-In Tariff arrangement depends on your power use patterns. Remember, if you’re on a Net Feed-In Tariff, you only get paid for solar electricity that you don’t use.

    As at 1 July 2018, Net Feed-In-Tariffs in some states were less than half of the 24c per kw/h that the average Australian household pays to buy power from the grid (see table below). In addition, homes with solar will often need to be on a “Time of Use” Electricity Plan, which charges rates above 40c per kw/h in some states during “Peak” periods (usually 2pm to 8pm weekdays).

    City Net Feed-In Tariff City Net Feed-In Tariff
    Adelaide 15c per kw/h Darwin 25.67c per kw/h
    Alice Springs 25.67c per kw/h Hobart 8.5c per kw/h
    Brisbane 16.1c per kw/h Melbourne 9.9c per kw/h
    Cairns 9.4c per kw/h Perth 7.135c per kw/h
    Canberra 11c per kw/h Sydney 12.5c per kw/h
    Table 1: Net Feed-In Tariffs by city as at 1 July 2018. Canberra rates sourced from Actew AGL. Sydney, Melbourne, Brisbane and Adelaide rates sourced from Energy Australia. Alice Springs and Darwin rates sourced from Jacana Energy. Hobart rates sourced from Aurora Energy. Perth rates sourced from Synergy. Cairns rates sourced from Ergon Energy.

    How to Maximise Your Savings

    To maximise your financial savings from a solar PV system, you need to:

    • Use your solar power as soon as it’s produced AND
    • Use your solar power during “Peak” periods, when power is most expensive.

    If you’re at home during the day, you have a good chance of maximising your savings from solar – even more so if you’re at home during Peak periods (2pm to 8pm weekdays). This is when solar panels produce the most electricity, and when electricity is most expensive to buy. However it is a fine balance – use more power than your panels can generate during Peak periods, and you could find yourself paying a big electricity bill.

    Before you install your solar panels, get a good understanding of your daytime electricity usage patterns. Once you’ve done that, our Solar Panel Savings Calculator can help you work out how much money you could save from solar panels, based on where you live and your daytime electricity usage patterns. It can also show you how long it could take you to pay back your solar PV system through electricity savings.


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