Why the best solar tariffs are not always best option for solar households

The Queensland Competition Authority has encouraged households with rooftop solar to consider shopping around for new retail electricity offers, and not to be lured by what may appear to be the highest feed-in tariff.

In an update of its regular tracking of solar feed in tariffs and retail electricity offers in South-East Queensland, the Queensland Competition Authority found that while households were mostly benefiting from a fall in wholesale electricity prices, that this had also resulted in a fall in the solar feed-in tariffs offered by retailers.

The QCA says solar feed-in tariffs in South-East Queensland have fallen by around 20 per cent over the last two years, to an average of 8.5 cents per kilowatt-hour in June, 2020, from an average solar tariff of 10.5 cents per kilowatt-hour offered in June, 2018.

The QCA says  that the fall in wholesale electricity prices meant that it was timely for households with rooftop solar to review their electricity deals, as the offers with the highest solar feed-in tariffs do not necessary lead to lower overall electricity bills.

“Retail electricity offers with feed-in tariffs varied materially between and, in some cases, within retailers. Different supply and usage charges, discounts, incentives and recurring fees resulted in a wide range of bills,” the report says.

“Retail electricity offers with the highest feed-in tariffs do not necessarily provide the lowest net overall bills for solar customers.

“Customers with low electricity consumption and low solar export ratio were generally better off with offers that had lower supply and usage charges, while customers with high consumption and a high export ratio were generally better off with offers that included higher feed-in tariffs and lower usage charges.”

The QCA urges all households to review their electricity deals and recommends households with solar ensure they are weighing up the value of their solar tariffs against what they are paying for electricity used and connection charges.

“Customers with low electricity consumption and low solar exports were generally better off with offers that had lower supply and usage charges, while customers with high consumption and high solar exports were generally better off with offers that had higher feed-in tariffs, lower usage charges, and discounts off usage charges,” QCA chair professor Flavio Menezes says in a statement.

Menezes says it is important for solar households to also consider their patterns of electricity usage, and they can optimise the value of power produced from a rooftop solar system.

“When customers are comparing solar offers, it is critical they consider the amount of electricity they use, the times of the day that they use the most electricity and all other aspects of offers, not just the feed-in tariff.

“Customers who are home during the middle of the day might find they use most of the electricity their solar PV systems generate, whereas customers who are not home during the day might export most of the electricity generated by their system.”

The QCA encourages customers with solar PV systems to compare retail offers and solar feed-in tariffs by using the Energy Made Easy website.