What is a feed-in tariff?18th Jul 2011
A lot of the dialogue around solar power at the moment is mentioning feed-in tariffs (FiT).
But if you are unfamiliar with the term, what does it mean?
A FiT is a government incentive for owners of solar power systems to feed the excess energy they generate back into the local electricity grid.
Owners are eligible for a financial return because they have taken on the task of generating electricity themselves.
The electricity provider in your area is obligated to buy this electricity to alleviate our dependence on traditional energy generation such as coal-fire power.
Essentially, the tariff helps consumers save money on their electricity bill.
It also applies for wind, hydro and biomass power generators.
For example, a regular household can install an array of photovoltaic (PV) panels.
Solar panels convert the sun's rays into energy and feed it into the local grid.
The price received for this energy is called the tariff and is determined at cents per kilowatts an hour (c/kWh).
A tariff’s exact price differs depending on a number of factors including location, energy retailer, size of the solar power system and more.
Some states within Australia will allow you to take part in the FiT scheme with a solar system mounted on a property you don't live in, such as a holiday home.
FiT schemes exist to encourage the adoption of clean energy and to phase out other forms of energy generation that create pollution.
At present, over 40 countries have some kind of legislation to encourage citizens to take up solar power.
How you can get involved is simple.
You can start by checking if the tariff scheme is currently open in your state.
FiT schemes are capped and those wishing to take part must make an application when the tariff is open.
Once the cap has been reached, owners will have to wait for it to be re-opened.
Next you can check out the tariff rates in your area on the website of your local electricity utilities' website.
This will give you an idea of the financial incentives available to you. There are different schemes for different sized systems as well.
Next you have to find the right solar power system for your property.
There are a large range of PV systems with different power capacities and panel sizes so it's best to shop around.
A solar quote broker can also tell you if you are eligible for a solar panel rebate.