Why Falling Feed-In Tariffs for Solar Self-Consumption and Batteries Matter More Than Ever
HOME > Why Falling Feed-In Tariffs for Solar Self-Consumption and Batteries Matter More Than Ever
The feed-in tariff for solar power has fallen in most states over the past two years, with IPART’s NSW benchmark now at 3.4–6.5 c/kWh for 2026–27. Exported solar earns far less than grid power costs to buy, which is why self-consumption and home batteries are now the bigger savings lever for Australian homeowners.
Feed-in tariffs are lower because so much rooftop solar now floods the grid at once. Millions of homes export power in the middle of the day, pushing wholesale electricity prices down at exactly the hours your panels work hardest. Retailers pay based on that wholesale value, so when midday prices fall, so does your export credit.
According to IPART, the official 2026–27 benchmark for New South Wales sits at 3.4 to 6.5 c/kWh, down from 4.8 to 7.3 c/kWh the year before. Some retailers pay above this range, some below, and a few standard contracts offer no feed-in tariff at all.
Victoria removed its mandated minimum in mid-2025, and some retailers there now pay close to zero for midday exports.
This is an ongoing, active trend, not a one-off dip. If you’d like the full mechanics of how a FiT is calculated, see our feed-in tariff explainer.
A lower feed-in tariff for solar power doesn’t make solar a poor investment, but it does shift where the value comes from. Exporting surplus power used to be a meaningful part of the payback calculation.
Today, most of a system’s value comes from directly offsetting electricity you’d otherwise buy, which typically costs three to six times more per kilowatt-hour than what you’re paid to export.
Every kilowatt-hour you use yourself is now worth considerably more than one you send to the grid. That gap is why self-consumption and battery storage have moved to the centre of solar planning, a trend we’ve also covered in our guide to rising electricity prices and solar.
Self-consumption means using solar energy as it’s generated, rather than exporting it for a low credit. Running the dishwasher, washing machine, pool pump or EV charger during daylight hours, instead of in the evening, is a simple starting point.
For many households, habit changes alone only go so far. Solar output peaks around midday, while most homes use the most electricity morning and evening — a mismatch a battery is designed to solve.
A home battery stores solar energy you’d otherwise export for a low tariff, then releases it during the evening peak — avoiding a 30-cent buyback instead of selling for a few cents.
The federal Cheaper Home Batteries Program is currently Active, offering an upfront discount of around 30% on eligible battery systems between 5kWh and 100kWh usable capacity, via Small-scale Technology Certificates (Clean Energy Regulator).
Changes to how those certificates are calculated took effect 1 May 2026, but the ~30% discount level has been maintained. Eligibility can change, so confirm current settings with your installer before signing. Our Cheaper Home Batteries Program guide and battery size guide cover eligibility and sizing in more detail.
Sizing matters here: a 14kWh battery typically suits a 6.6kW to 10kW solar system and moderate evening use, storing enough surplus to cover a typical evening without leaning on the grid. Larger households, or those on a 10kW to 13kW system with higher evening demand, sometimes look at a 28kWh battery instead — though our 14kWh vs 28kWh comparison explains why bigger isn’t automatically better: an oversized battery can’t fully charge from a smaller solar system, so it never captures enough low-value exports to justify the extra cost.
|
Factor |
Exporting to the grid |
Storing in a battery |
|
Typical return per kWh |
3–10 c/kWh (2026, state dependent) |
Avoids buying back at 30+ c/kWh |
|
Upfront cost |
None |
Hardware and install, offset by rebate |
|
Best suited to |
Homes mostly out during the day |
Homes with evening usage peaks |
|
Blackout protection |
No |
Depends on configuration |
Neither option is automatically better for every home. A battery adds an upfront cost, and its value depends on evening usage, household size and your existing solar system — see how this plays out for a 6.6kW system with vs without a battery. A feed-in tariff still matters for solar generated beyond what a battery can store.
No. Each state sets its own approach, and some regulators publish a non-mandatory benchmark rather than a fixed rate. Actual rates vary by retailer and plan, so check your own bill against the current benchmark.
Recent trends point that way, as more rooftop solar enters the grid each year. Rates are reviewed annually, so they can move up or down with wholesale electricity costs.
No. Shifting appliance use to daylight hours improves self-consumption without a battery. A battery extends that benefit into the evening, when most households use the most power.
Yes, as of August 2026 (Active). Settings are adjusted periodically, so confirm current terms with the Clean Energy Regulator or your installer before purchasing.
