SWITCHING TO SOLAR: FEED-IN TARIFF

With several new advancements in technology, experts are finding different ways to use renewable energy in cost-effective methods. We all know that solar energy is derived from sunlight and now we can use solar energy to power our houses.  Solar energy is generated with the help of sunlight by converting it into electric or thermal power. Apart from using solar panels so as to generate electricity, solar energy is generally used for thermal appliances so as to heat the indoor spaces.  Residentials and commercial property owners can install solar power systems by keeping passive solar heating in mind. They can design their buildings using solar technology and enjoy all the advantages of solar energy. Switching to solar energy will not only cut down your electricity bills but also will help in getting paid for the excess electricity your system generates. A solar-powered system absorbs the sunlight and converts it into usable electricity with the help of solar panels. 

The Australian government provides huge support to the people who are switching to solar by providing them solar rebates. Also in addition they are giving feed-in tariffs to the citizens for the extra generated power by their system. This encourages the people to think about switching to solar, contributing to taking care of the environment and get the credit for it as well.  

A very important point to be kept in mind while promoting renewable energy sources is the incentives that the customers get in form of feed-in tariffs. Since feed-in tariffs generally have long-term agreements which give a sense of security to the customers as they will get the benefits in future from switching to solar. The contracts are in a long-term period and have guaranteed prices as well so it provides a kind of shelter to the producers from some of the risks that are inherent in renewable energy production. This consequently encourages more and more people to invest in solar energy and enjoy several benefits. 

Eligibility criteria for a feed-in tariff?

The eligibility required for a feed-in tariff is that the customer needs to provide a source of renewable energy such as solar power by installing an on-grid solar power system at their house. As per the government incentive schemes, an ordinary homeowner can also enjoy the benefit of a grid-connected system. So this means, to use a renewable power source, you don’t need to be a commercial energy producer at all. They often include homeowners, business owners, farmers, and private investors. Basically, Feed-In Tariffs have three basic provisions-

  1. Feed-In Tariffs are for on-grid connections and they guarantee grid access all times to solar energy producers.
  2. Feed-In Tariffs offer long-term contracts, generally in the range of 15 to 25 years.
  3. Feed-in Tariffs offer guaranteed cost-based purchase prices. This means that the energy produced through the solar power systems that have been installed by the homeowners is paid for in proportion to the resources and the capital expended in order to produce the energy by the retailer they are connected to.

Many retailers in Australia also introduced feed-in tariffs as a part of incentives so as to encourage people to switch to renewable energy sources to power their houses. The best advantage of the feed-in tariff is that it pays you for the excess electricity that your system generates. 

There is a meter attached to your system that records the excess solar energy generated by your system and depending on that calculation by the meter, the homeowners can claim their feed-in tariffs. Also, the Feed-in Tariff may vary from retailer to retailer, so the homeowners have an option to switch to the retailer that offers more feed-in tariffs and a good deal for the extra power generated by their solar power system. 

Under a net feed-in tariff, an amount fee is paid to the homeowner for any solar energy that they send back into the grid from their house. So if your system is generating more electricity from your solar panels than you are using at any point in time in your house, then you definitely get paid for this extra electricity that is sent into the grid

The process of receiving the feed-in tariff is easy, your solar installer will apply with your electricity provider while getting the solar installation. Once your system has been installed, your electricity provider will connect your system with the grid. One of the important notes which should be kept in mind is that all the metering work is carried out by the electricity retailer. The solar provider does not have any role in it. Before signing the agreement, make sure to get the proper information about how much you will be paid for every kW/h that is exported to the grid. 

It is always advised to be aware of the price set by their electricity provider as it may vary with the others. The customer should always check whether any change in tariffs by their retailers, changes may occur while installing solar. Get the proper knowledge about the advantages and disadvantages before making any final decisions. Just ask Future Solar’s expert team regarding any queries related to solar installations and feed-in tariff. 

Feed-in tariffs are always priced based and so is the net metering as well. There are certain criteria in different countries to be eligible for receiving the feed-in tariff. So in order to qualify for this government incentive ‘feed-in tariff’, one should consist of the following options: an obligation of purchase, a stable tariff payment that is guaranteed for a long period of time. 

Firstly, the purchase obligation obliges the connected grid operator to buy all the renewable electricity – independent of electricity demand. 

Secondly, the renewable power producer, in this case, the homeowner, is guaranteed a certain amount of money per unit of electricity that their system produces.

Thirdly, this payment is committed for a long period of time (around 15 to 20 years), which eventually increases the investment security and allows for cost settlement as well. 

So there is a difference between feed-in tariffs and net metering as they both have different levels of functioning and provide different incentives while switching to solar. Net metering is also price based but in this, it is applied for promoting the decentralization of electricity power in different parts of Australia. Under this scheme, the independent power producers have the total right to get their system connected to the grid and the local utility is also obligated to purchase all excess electricity produced by the system. This simply means that all excess electricity generated that is not needed for local consumption has to be bought by the electricity retailer itself. 

Meter measuring of electricity consumption is a support scheme. In this case, the meter starts turning back once it reaches the excess electricity level and fed it into the grid. Or in other words, we can say that for each unit of electricity that is delivered to the grid, the power producer receives the equivalent electricity price for it. Moreover, this electricity price for final consumers is not fixed. The net metering instrument lacks two of the most important features of the feed-in tariff and also offers a low-security investment. 

Solar Feed-in tariffs should not be confused with other preferential tariffs as they have their own characteristics which mark their differences. In preferential tariffs cases, the remuneration level is fixed by the legislator. And as compared to a feed-in tariff mechanism, the tariff level is not guaranteed for a long duration. In fact, the legislator can change the remuneration level annually. So, it lacks one of the essential components of a feed-in tariff. 

Nowadays, feed-in tariffs which are defined above briefly are generally applied in a large number of countries, regions and provinces. 

So why are feed-in tariffs so good for you? 

Firstly, they have proved that they are the best support mechanism for renewable electricity. Secondly,  they are flexibly designed according to the conditions and framework of the national electricity market and national policies. They can be modified so as to include electricity shares or according to the needs of the economy. Thirdly, feed-in tariffs lead to job creation as they have helped in creating national markets for the manufacturing industry. Lastly, they have contributed to the growth of energy markets by including small and medium-sized companies

Interested in switching to solar power? 

Solar panels are installed at two main scales: residential and commercial. 

Residential-scale solar is basically installed on rooftops of the homes or in open land which is often called ground-mounted. The system size ranges between 5 and 20 kilowatts (kW), depending on the size and location of the property. 

Commercial solar energy projects require large areas and are generally installed at a greater scale as compared to residential solar. Solar installations may vary in size, commercial-scale solar serves a different purpose: to provide on-site solar power to businesses and non-profits organizations. 

Some people who might not be able to install solar at their houses may opt for community solar. It connects utility-scale solar energy projects to residential consumers. Community solar farms are basically built in the central locations and customers may opt for them to enjoy solar benefits even without installing the solar systems on their property.

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