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Many homeowners think solar panels make money mainly by selling electricity back to the grid. In reality, the main value of solar is usually not selling electricity. The main value is using your own solar power so you buy less electricity from the grid.
What is feed-in tariff?
A feed-in tariff is the credit a household receives when extra solar electricity is exported to the grid. For example, if a solar system generates 10 kWh during the day and the home uses 4 kWh, the remaining 6 kWh may be exported to the grid.
If the feed-in rate is 6c/kWh, the credit would be: 6 kWh × 6c = 36 cents.
Why feed-in is not the main profit
The problem is the gap between selling electricity and buying electricity. A household may receive a low rate for exported electricity, but pay a much higher rate to buy electricity from the grid later.
Victoria no longer has a set minimum feed-in tariff from 1 July 2025, and retailers may set their own feed-in tariffs as long as they are not below zero.
Simple example
If a household exports: 10 kWh × 6c = A$0.60. But later buys electricity at: 10 kWh × 30c = A$3.00. The household receives only A$0.60 but pays A$3.00 later.
This shows why solar is not mainly about selling electricity. Solar is mainly about avoiding expensive electricity purchases.
How a solar battery helps
A solar battery changes the situation. Instead of exporting extra solar power at a low rate, the household can store it and use it later. This means the home uses more of its own solar electricity and buys less from the grid.
What appears on the electricity bill?
A solar household bill may show:
- Import: electricity bought from the grid
- Export: electricity sent to the grid
- Feed-in credit: credit for exported electricity
- Final balance: amount payable
The final bill is usually based on the difference between electricity bought and feed-in credit received.
Final thoughts
Feed-in tariff is useful, but it should not be seen as the main way solar saves money. The real value of solar is reducing the amount of electricity purchased from the grid. Battery storage can improve this by helping households use more of their own solar energy.