The Solar Feed-in Tariff Collapse, From 60 Cents to 5 Cents per kWh

The feed-in tariff (FiT), the rate retailers pay households for excess solar exported to the grid, has declined dramatically over the past decade. This article traces the history of solar incentives in NSW and explains why self-consumption now matters more than export revenue.

In 2010, the NSW government launched the Solar Bonus Scheme, offering a gross feed-in tariff of 60 cents per kWh for solar exports, well above the retail price of electricity at the time. This was intended to incentivise rooftop solar adoption. The scheme was so generous that it was closed to new applicants in 2011 and the rate was reduced to 20 cents for later participants.

The original 60-cent rate was honoured for participants until the scheme ended in December 2016, after which all solar exports were paid at retailer-set voluntary rates.

After the Solar Bonus Scheme closed, feed-in tariffs became a voluntary, retailer-set rate rather than a government-mandated subsidy. As solar penetration increased, over 30% of NSW homes now have rooftop panels, the daytime supply of solar energy on the grid grew substantially, depressing the wholesale market value of midday electricity.

The Independent Pricing and Regulatory Tribunal (IPART) began publishing a benchmark range for voluntary FiTs, which declined from around 10–12 cents per kWh in 2018 to approximately 5–7 cents per kWh by 2024. Some retailers offered higher promotional FiTs for limited periods, but these were typically sign-up bonuses that reverted to lower rates after 12 months.

The collapse in FiT rates has shifted the economics of solar from 'export and earn' to 'self-consume and save'. Using your own solar power avoids buying grid electricity at 25–35 cents per kWh, while exporting it earns only 5–7 cents.

This ratio makes battery storage more attractive, as batteries allow households to store daytime solar for evening use rather than exporting it at low rates. The solar industry has responded by increasingly bundling battery storage with new solar installations.

For households considering solar, the payback calculation should prioritise self-consumption over export revenue. A system sized to match daytime usage will pay back faster than one sized to maximise exports.

For existing solar owners, the declining FiT means that strategies like daytime appliance use, battery storage, and smart energy management are increasingly important to maximise savings. The feed-in tariff a retailer offers is now a smaller factor in total savings than the usage rate you pay for grid electricity.