Feed-in Tariffs Are Dead. Here's What Smart Solar Owners Do Instead

If you got solar before 2013, you probably remember the golden era. State governments were falling over themselves to incentivise rooftop solar with generous feed-in tariffs that paid homeowners handsomely for every kilowatt-hour exported to the grid.

Queensland's Solar Bonus Scheme paid 44c/kWh. New South Wales offered 60c/kWh under its Gross FiT. Victoria had rates of 25-60c/kWh depending on when you signed up. South Australia's early adopters locked in 44c/kWh. These were extraordinary returns. Households were earning $1,000-$2,000 per year just from exporting surplus solar to the grid.

The purpose was to kickstart rooftop solar adoption, and it worked spectacularly. Australia went from a handful of solar homes to over 3.6 million rooftop systems, the highest per-capita solar penetration on earth. If you are still weighing up whether solar is worth the investment, those early returns were extraordinary. But those generous tariffs were always temporary. As solar installations surged and the midday electricity glut grew, governments wound them back. The premium schemes closed to new entrants. The rates fell. And fell. And fell.

The reason is simple supply and demand. When millions of homes all export solar at the same time, between 10am and 2pm, wholesale electricity prices during those hours collapse to near zero or even go negative. Retailers have no incentive to pay you a premium for energy that is practically worthless at the time you produce it. The AEMC formally acknowledged this by removing mandatory minimum FiTs in several jurisdictions.

Let's look at the maths that every solar owner needs to understand in 2026. This is the single most important number in home solar economics.

Every kilowatt-hour you use from your own panels is worth 5-15 times what you'd get by exporting it. If you're running the dishwasher in the evening and paying 38c/kWh from the grid while your solar exported that same energy at 5c during the day, you've lost 33c in potential value. Multiply that across every appliance, every day, and you're leaving hundreds, potentially thousands, of dollars on the table each year.

As one r/AusSolar member put it: “Stop obsessing over which retailer pays 5c vs 7c. That 2c difference on 10kWh of exports is 20 cents a day. Instead, shift one load to daytime and save $1.50. The maths isn't even close.”

The cheapest and most immediate way to get more from your solar is to shift your electricity usage to daylight hours. If you are new to how solar generation and consumption work, our guide to understanding solar covers the basics. These strategies cost little or nothing and can boost your self-consumption ratio from a typical 30% to 50-60%.

If self-consumption is the game, a home battery is the most powerful tool in the kit. It stores your free daytime solar and uses it during the expensive evening peak when you'd otherwise be buying from the grid at 30-45c/kWh.

The question is no longer whether a battery makes sense. It's which one to get. Our battery comparison tool lets you compare brands and specs side by side, and for a deeper dive into sizing and real-world payback calculations, see our comprehensive guide: Is a Solar Battery Worth It in 2026?

If you have a battery, there's a revenue stream most Australians still haven't tapped: Virtual Power Plants (VPPs). Instead of exporting leftover battery energy at a pitiful 2-7c/kWh FiT, VPP programs dispatch your battery during grid stress events and pay you 15-25c/kWh, sometimes over $1/kWh during extreme demand.

The critical difference: standard FiT exports happen when electricity is cheapest (midday, when every other solar home is also exporting). VPP exports happen when electricity is most valuable (hot summer evenings, cold winter peaks, when the grid is under stress). You're selling into scarcity instead of surplus.

The optimal strategy stacks all three: self-consume first (saving 30-45c/kWh), export via VPP second (earning 15-25c/kWh), and only then let leftover surplus go to the standard FiT (earning 2-7c/kWh). For the full comparison and how to choose a VPP program, see our VPP vs Feed-in Tariff deep dive.

As if low FiTs weren't bad enough, a new development is making the export-focused solar strategy even worse: solar export charges, commonly called the “sun tax”. Network operators are beginning to charge solar owners for exporting electricity during periods of grid congestion.

The logic from the network operators' perspective: when millions of homes export simultaneously, the local network infrastructure (transformers, cables) can become overloaded. Export charges are designed to discourage midday export floods and incentivise self-consumption or battery storage instead.

For solar owners, the message is clear: the future involves paying to export during the day. A battery sidesteps this entirely. You store your midday surplus (avoiding export charges) and use it in the evening (avoiding peak grid rates). It turns a cost into savings from both directions.

Manually shifting loads and monitoring your solar production is effective but tedious. The next level is automating everything with a home energy management system (HEMS) and smart meter data.

Here's what every state and territory is currently offering. Use this as a reference, but remember: chasing the best FiT rate is optimising for the wrong metric. The real savings come from self-consumption.

The smartest solar owners in 2026 aren't picking one strategy. They're layering them. Here's what the complete self-consumption stack looks like and how the annual savings compare to the old “export everything” approach.