History shows that May to July is that time of year where electricity retailers announce their new plans. Given this, we felt it was important to send out a message today to encourage all our customers to review their electricity contracts.
Since November we have been providing information on a potential drop in Feed In Tariffs and the likelihood that South Australia Power Networks (SAPN) may introduce a Time Of Use Tariff from July onwards, (it was scheduled for announcement in April 2020, but was delayed due to COVID-19 and we are currently unsure if and when something will be announced).
In that time Energy Australia have dropped their Feed-in Tariff from 15c to 11c per kWh (edit back up to 11.5c per kWh since first written) and Origin’s Feed In Tariff on the solar boost plan has also changed, though not for the better. Origin Solar Boost is now offering a 20c Feed In Tariff for the first 8kWh per day and 10c for the remainder, and also cheekily increasing electricity costs to over 40c a kWh. Essentially this means an extra $300 yearly credit with a 10c Feed In Tariff and more expensive electricity cost, which is not a great deal!
While your provider will notify you of any changes, some of our customers have actually had the misfortune of receiving a bill with the lesser Feed In Tariff already. This blog will seek to give you some information regarding Feed In Tariffs and provide you with information and resources to ensure you are able to stay on top of the changes and continue to maximise your savings from your solar investment.
Feed In Tariffs – What’s A Good Deal?
We are encouraging a review of your current energy plan as there is a potential for a drop in the Feed In Tariff rate to start being introduced in 2020, (we’ve highlighted two examples of retailers already dropping their rates at the start of this blog).
Currently a better deal is one where an electricity retailer is charging you around 36c per kWh which most feel is unfair, however they are currently paying you on average around 14c per kWh as a Feed In Tariff. This is despite the fact that energy retailers buy electricity wholesale for on average 5c per kWh.
South Australia is now heavily supported by renewable energy sources and has one of the highest uptakes in residential solar systems in Australia. This means we have so much wind and solar energy being generated during the day and feeding into the grid it is bringing down the wholesale cost of electricity. So, it’s only fair that if electricity is cheaper to produce, like it or not, the Feed In Tariff should also decrease, hence Origin and Energy Australia’s decisions recently.
Your Solar System is an investment, and as with any investment it is vital that you get the most optimum return. A reduction in the Feed In Tariff from 15c to 10c will mean on average only $300 less savings a year based on our average 7.875kW solar system installed. However, even a 10c Feed In Tariff still has you looking at an over 15% return on investment and under 5 years pay back timeframe for new systems, so it’s not the end of the world.
You’re still saving money, although this saving may be not as much as it has been in the past. Our advice is to stay informed. Just like your superannuation, when times are good you don’t contact your financial advisor or bother looking at your investment going well, but when new rules come in or economic circumstances change, meaning your balance diminishes quickly, it’s often too late to make a change.
If there is to be a reduction in your Feed In Tariff’s, we feel it is only right to assist you in researching so you can make your own informed decision. If we were to tell you that you could get petrol at $1 per litre today and that you would have that price for the next 12-24 months would you jump at that price or run the risk that it may go up, in the hope that it may drop significantly?
Everyone has a different tolerance for risk and reward, so ultimately you need to the weigh the facts and consider your personal situation.
This reduction in Feed In Tariffs may not happen at all or may take 6+ months to filter through to all electricity retailers, however if you can lock something in now you will be ahead of the curve when they do come in, and if there are no changes, well you have lost nothing except maybe a few worry lines on the forehead as you can relax knowing you’ve locked in a great deal you’re comfortable with.
Ways To Save
We can’t predict the future or tell you what to do, but we have always valued transparency and honesty and want to provide all our valuable customers with as much information as possible so you can make the best decision for yourself.
Throughout our 9 years of business we have helped over 4,000 South Australians receive the benefits of solar and as much as we want to continue to help you all, being a small business we can’t answer or reply to every individual customer advising what deal is best for them. So, we thought this blog would be a great way to support you with the tools you need to make an informed decision, based on your individual circumstances.
Below are some links to valuable resources to help you find the best deal you can. These sources are more accurate than any answer we can give. We suggest you use the excellent online tool from the team at SolarQuotes to help you get the best deal possible. You can enter your solar and electricity data and it will match the best plan for your situation.
Here at Goliath we understand your time is valuable, so if that tool is a bit too much work, you can go to our website and look our Top Energy Retailer’s Comparison Guide.
Goliath Solar and Electrical will continue to provide you with information to ensure that all our customers are informed and maximise their solar investment.
* Please be mindful that moving / cancelling plans may incur a cancellation fee. This information is available on your current plan contract, so please read carefully!
Other Resources & Readings
Energy Made Easy
Source – Australian Government
(Slightly) Cheaper Electricity Network Charges Ahead For South Australians
Source – SolarQuotes
Networks Offer “Super Cheap” Pricing To Soak Up Australia’s Solar Sponge
Source – Renew Economy
Renewable Integration Study (RIS)
Source – AEMO