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Falling feed tariffs & Higher electricity bills: what's happening and what to do about it

In the second half of the year 2021, Australian energy retailers started slashing financial incentives for those selling their excess solar energy back to the grid. This information isn't news - it's been happening for a while now. If you're getting frustrated looking at your electricity bills rising and your feed-in tariffs declining, you need to read this article.

But first, why are feed tariffs falling?

Falling feed tariffs since 2019

In short, feed tariffs are what retailers pay you for the excess electricity generated from your solar panels that your household doesn't use, so you sell back into the grid instead.

When we did a quick check-in at comparison site Wattever, we saw that solar feed-in tariffs have been dropping steadily.

Energy economists have commented that feed-in tariffs are an unreliable incentive since electricity retailers often pay little for your feed-in electricity while simultaneously charging a lot more for electricity.

Electricity suppliers who pay more for your electricity usually encourage more people to use renewable energy sources.

This incentive was a good idea at the start of the 1990’s when the installation of solar panels was expensive. Any incentives, however small, helped to kickstart the industry so people would make the switch. It also helped to educate people on lower emissions.

But solar panel installations are increasingly more affordable. And as more people start using solar energy, the supply is high, and electricity companies no longer need to incentivise solar energy users.

So, on the one hand, feed-in tariffs have steadily declined. On the other hand, electricity prices have increased as electricity demand rises.

This trend coincides with the last two years where more people work remotely from home. This report says that Australians working from home will notice that electricity bills increasing almost 50% on their monthly bill. With the increasing electricity demand, suppliers want to profit from this and consequently raise electricity prices.

Australians with rooftop solar are increasingly frustrated as energy retailers slash financial incentives. In 2018, a Solar Citizens article reported that one-third of 2062 households sell their excess electricity at lower prices than retailers could buy it.

So, in other words, selling back electricity to the grid is no longer as attractive as before. It is more beneficial to keep the electricity for yourself.

So, what can you do about this?

Home batteries to the rescue

Since it's now more attractive to store your excess solar energy for use rather than sell it back to the grid, it's time to install a home battery.

When the sun is at shining, you can store all the excess solar energy you need in your home battery. Residential solar energy systems can provide power regardless of weather or time of day without relying on electricity from the grid.

If the power goes out suddenly at night, you would be blissfully unaware. Here are some other benefits:

  • Lower costs, more power. Your electricity in the evening will be more expensive if you buy from the grid, especially if you are billed for time of use. The increase is simply because of higher demand at night. However, with battery storage, you can use electricity generated during the day later on, rather than relying on the utility for power.

  • Avoid electricity rate increase. Since electricity prices have increased, it's more affordable to leverage energy that has already been generated and stored. You can even monitor the buyback rates from various energy retailers and sell the stored energy when rates are higher. Some retailers like Horizon Au offer buyback rates as credits for your electricity use if you sell back stored energy from your home battery to their grid.

  • Increase energy self-sufficiency. Most places require homes to connect to their local utility even if they do not use any electricity from the utility. A solar-plus-storage system will take you closer to being "off the grid". Battery storage means you will no longer rely on your utility to deliver electricity to your home. And if the power goes out in your neighbourhood, your house will still have its lights on.


If you're thinking of buying a solar home battery because electricity is too expensive and feed-in tariffs are unattractive, consider the RESU LG HOME unit.

If you are interested in hearing more about solar energy for your home and receiving a quote for an LG RESU or an LG RESU HOME, head on over to our quote form, and one of our certified installers will get in touch shortly.


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