If you installed solar in Australia before 2020, you may remember receiving 20, 30, or even 44 cents per kilowatt-hour for power you exported to the grid. Today, most Australian retailers are paying between 4 and 10 cents per kWh for solar exports.
This shift has fundamentally changed the economics of solar — and it's the primary reason batteries are suddenly making more financial sense.
Why have feed-in tariffs fallen?
The collapse in feed-in tariffs reflects the success of solar adoption. When solar was rare, utilities paid a premium to incentivise uptake. Now that solar penetration is high — particularly in South Australia, Queensland, and Western Australia — the grid receives more solar energy than it can absorb at midday.
The result: wholesale electricity prices go negative during sunny midday periods, meaning exported solar has little or negative value to the grid. Retailers have passed this through to customers in the form of lower (and in some cases zero or negative) feed-in tariffs.
What does this mean for solar owners?
If you have existing solar and a generous legacy feed-in tariff (above 15 c/kWh), you're in a privileged position. Protect it: switching retailers may cause you to lose a legacy rate that may not be available under current offerings.
For everyone else on market rates of 4–10 c/kWh, the priority should be maximising solar self-consumption — using as much of your generated solar as possible rather than exporting it.
How to maximise self-consumption without a battery
Before considering a battery, there are lower-cost ways to improve self-consumption:
- Time-shift appliance loads. Run the dishwasher, washing machine, and dryer during the day using timers or smart plugs.
- Heat water with solar. A diverter device (like SolarEdge, iStore, or similar) can divert surplus solar to an electric hot water system — effectively storing solar energy as hot water for a fraction of battery cost.
- EV charging. If you have an EV, schedule charging for midday to absorb solar surplus.
These measures can reduce solar export by 30–50% at much lower cost than a battery.
When a battery becomes the right answer
Once you've exhausted the low-cost self-consumption options, a battery may be the next step — particularly if:
- You're still exporting more than 5 kWh/day after shifting loads
- Your import tariff is above 28 c/kWh
- The gap between your import and export rates is greater than 20 c/kWh
At a 25 c/kWh arbitrage spread, a 10 kWh battery cycling fully every day saves approximately $912/year — enough to give a reasonable payback on current battery prices, particularly with state rebates.
The time to act may be now
Feed-in tariffs are unlikely to improve. Some networks are actively pursuing demand charges and other mechanisms that could further reduce the value of solar exports. Battery costs continue to fall.
The combination of low FiTs, high import rates, and declining battery prices means the economics of batteries are getting better each year, even as the urgency to act increases.
Run the numbers for your specific situation using our free calculator to see whether a battery makes sense for you today.