If you’ve installed solar panels on your home, you probably enjoy earning a feed-in tariff (FIT) on the excess energy you export to the grid. In New South Wales, that FIT has typically been around 5 cents per kilowatt-hour (kWh). However, recent discussions and proposals from network operator Ausgrid indicate that things may be changing soon with the introduction of a fee for exporting solar power in NSW. In this blog post, we’ll explain what these export charges are all about, how they might reduce your earnings, and what strategies—including export limiting—can help protect your savings. (This is especially true if you do not have a battery and cannot self consume your solar power)
What Are Ausgrid’s Export Charges?
Traditionally, when you export excess solar energy, you receive a credit at a rate of about 5 cents per kWh. Now, however, Ausgrid is planning to introduce a two-way tariff system. Under this system, during certain periods (typically during peak demand when the grid is under stress), an export charge will be applied to the energy you send back.
For example if an export charge of roughly 1–1.2 cents per kWh is imposed, your effective credit may drop from 5 cents to around 3.8 cents per kWh.
In some forecast scenarios—with further reductions in FIT or increased export charges—the net credit for exported energy could eventually drop to zero.
Why Is This Happening?
The main reasons for these changes are:
- Covering Grid Costs: As more households export solar energy, the grid must manage two-way power flows. Maintaining and upgrading the network to handle these flows costs money.
- Encouraging Self-Consumption: By reducing the financial incentive to export, the policy nudges solar owners to use more of their own generated power. This helps reduce peak demand and eases pressure on the grid.
What Does This Mean for Your Feed-In Tariff?
Under the current system, you might earn around 5 cents per kWh for exported energy. With the proposed export charges:
- Example Scenario: A 5-cent FIT minus a 1.2-cent export charge equals an effective credit of about 3.8 cents per kWh.
- The Future Forecast: Some industry experts believe that, over time, the combination of reduced FIT rates and increased export charges could push your net earnings close to zero. This means you might soon find that exporting your excess solar energy isn’t financially rewarding at all.
How Can You Protect Your Solar Savings? Export Limiting Explained
Since these changes could erode your FIT earnings, many installers are now exploring “export limiting” technology. Here’s what that means:
What Is Export Limiting?
Export limiting is a feature built into some modern inverters. (Such as those from GoodWe, Sungrow, and others). They allows you to control—and even restrict—the amount of energy your system sends to the grid. There are two common approaches:
- Zero-Export Mode: Some inverters let you set a threshold. This means you can limit the solar energy that is exported. This means you keep almost all the energy you produce for your own use, thereby avoiding export charges.
- Time-Based Export Control: Ideally, you’d like to limit exports only during peak times when the charges apply. And, allow exports during off-peak periods. While this more flexible, time-based control is an attractive option, it isn’t widely available on all inverter models just yet.
Why Export Limiting Is a Smart Strategy
If you have an inverter with export limiting—especially if you use brands like GoodWe or Sungrow—you can adjust your system to minimize or eliminate exported energy during the times when Ausgrid’s charges hit hardest. This way:
- Avoid Reduced Credits: By limiting your exports during high-charge periods, you avoid the fees that reduce your effective FIT.
- Maximise Self-Consumption: Keeping your solar power on-site means you can directly use the energy to lower your electricity bills.
- Future-Proof Your Investment: As policies change and FIT rates potentially drop further, export limiting can help ensure that your investment in solar continues to pay off.
What’s the Timeline for These Changes?
While Ausgrid has announced plans for new export charges, the full rollout is expected to be gradual:
- Implementation is Not Immediate: Details are still being finalized, and the changes could come into effect over the next year.
- Variable Rates: It’s likely that the export charges will apply only during certain periods of the day—typically when grid demand is highest—so you might not see an impact at all times.
For now, many industry experts suggest that the possibility of your net FIT earnings dropping to zero is real enough to consider export limiting as a practical measure.
In Summary
- New Export Charges: Ausgrid’s new tariff system will reduce the net amount you earn for exporting solar energy.
- Potential Impact on FIT: Effective credits could drop significantly—from around 5 cents per kWh to as low as zero, depending on how the charges evolve.
- Export Limiting as a Solution: Using inverter technology to limit exports—either completely or during peak charge periods—can help protect your savings.
- Future Outlook: While the timeline for these changes is still developing, it’s a smart idea to explore export limiting options now, so you’re ready if and when the changes take effect.
Further Reading
- Ausgrid’s Official Information – Stay up to date on the latest network changes and tariff details.
- NSW Government Energy Updates – More information on policies affecting solar and battery systems.
- GoodWe and Sungrow Inverter Solutions – Learn more about export limiting features available on leading inverter brands.
By understanding these changes and taking advantage of export limiting technology, you can continue to benefit from your solar installation—even as the policy landscape evolves. Newy Solar Co is here to help you navigate these changes, ensuring you get the most out of your solar investment while avoiding any unexpected charges.
