Background: The rise of premium Feed-in-Tariffs

In the early days of solar adoption, many Australian households benefited from Premium Feed-in Tariffs (PFITs). These government-backed programs offered generous rates for excess solar energy exported to the grid, often as high as 40 to 60 cents per kWh, to encourage solar adoption.

While these programs were instrumental in driving the initial wave of solar installations, they were always designed as temporary measures. Most Premium Feed-in Tariff schemes have now ended or are set to expire soon, leaving solar owners wondering what’s next.

What you may be getting now

If you’re still receiving a Premium Feed-in Tariff (pFIT), you’re likely receiving rates significantly higher than today’s standard feed-in tariffs, which can range from ~ 1 to 10 cents per kWh depending on your electricity retailer. 

These higher payments have been a key reason why many early adopters have held off upgrading their systems. However, with the expiry of pFITs, your financial benefits from solar exports will reduce dramatically. It is also worth taking a peek at your energy bill as you may not be getting much in the way of FiT payments anyway with an older system in place. 

The other thing that is imminent is what is called a ‘solar export tariff’ also commonly referred to as a “solar tax or sun tax”. Because of the glut of solar on rooftops in Australia and especially in SA, there is an oversupply of energy from solar during the day and electricity providers are introducing a new mechanism to charge solar panel owners for the electricity they feed back into the grid. What it amounts to is that solar panel owners may be charged to export energy to the grid (1-3c/kWh) depending on the time of day. 

The sun tax is set to affect anyone with solar panels that exports solar energy to the grid. Factors such as feed-in tariff amount from your retailer, time of day, battery storage, and electricity plan structure, will determine how much the sun tax impacts individual system owners. 

So how do you avoid the sun tax? 

There are three options when it comes to how you approach the sun tax. 

Opt-in to the sun tax– currently the sun tax is on an opt in basis. I.e. you as the customer have to opt in. In doing so your electricity retailer may supply cheaper energy at other times (i.e. not just a stick, but a little bit of a carrot too). However, how this will work will vary from retailer to retailer so for the average consumer it may be hard to assess what the net benefits are, if there are any. 

Opt out or choose a plan without a solar FiT – This is the foolproof way to be sure to avoid any impact from the sun tax. If you don’t export any energy then you don’t pay. 

Practice as much self consumption as possible – one of the key ways to achieve this is with a solar battery. With a solar battery installed, households are able to store their unused solar energy for use at a later time, instead of exporting it. The stored energy can then be dispatched to the grid via a VPP arrangement when the grid demand for energy requires it (more on this below). 

In addition, use your solar to run high energy appliances such as your hot water or pool heat pump or airconditioning – and if you have an EV, top up its battery with your solar as much as you can. That way you are maximising the use of your solar energy by powering your home and life rather than exporting back to the grid for next to nothing. 

Why the change to the pFIT?

The pFIT is due to end on the 30th of June 2028 so it is high time that solar panel owners who applied to install solar panels before the 30th of September 2011 think about getting a plan in place when it ends, if not sooner, especially if you are not getting the benefits anyway because of low solar exports. 

The solar industry has evolved significantly since pFITs were introduced:

Lower solar panel costs: Solar systems are now far more affordable than a decade ago.

Shift to self-consumption: With feed-in tariffs dropping, maximising the energy you use at home has become more cost-effective.

Grid constraints: High solar exports can strain the electricity grid, leading to reforms favoring local consumption and battery storage.

Should you keep your small solar system until the pFIT ends?

If you installed a small 1.5kW solar system ~15 years ago and are still receiving a Premium Feed-in Tariff (pFIT), you might be wondering—should you hold onto your system until the tariff ends, or is it time to upgrade?

To make the best decision, here are some key factors to consider:

Is your system still performing well?

Over time, solar panels naturally lose efficiency. If your system was installed a decade or more ago, it may not be producing anywhere near its original output—especially if the panels were lower-quality to begin with. A system that once delivered 1.5kW of power might now be generating a fraction of that.

Solar technology has come a long way

Today’s solar panels are far more efficient and powerful than their early counterparts, meaning a modern system will generate significantly more energy in the same amount of space. Plus, inverters—the brains of your system—are now smarter and more efficient, further optimising energy production. You also have the option to add a battery which probably was not the case when you installed the system originally. 

New solar & battery systems are more affordable than ever

When solar first became popular, installation costs were much higher.  But now, thanks to dramatic price drops and state or federal incentives, you can install a much larger system at an affordable price. If your pFIT payments have dwindled because you’re exporting less power, it’s worth checking your bill—your old system might not be delivering the financial benefits you think it is.

Has your energy use changed?

Your energy consumption today might be very different from when you first installed solar. Consider:

• Are you working from home more than you used to?
• Have you added air conditioning, an electric vehicle, or other high-energy appliances?
• Are you using more power in the evenings, when your solar panels aren’t generating?

If so, your system may not be offsetting enough of your electricity bill, making an upgrade—especially with a battery—a smarter move than hanging on to the sticker value of your pFIT.

Are you even exporting enough to benefit from pFIT?

If your home’s energy needs have increased over the years, you may already be using most of your solar power instead of exporting it—which means you’re barely benefiting from the pFIT anymore. Instead of holding onto an outdated system for a tariff that’s becoming less relevant, upgrading now to a modern solar and battery system will set you up for lower bills and better energy independence in the future.

Get expert advice before your pFIT ends

Every household’s situation is different, and making the right decision means understanding your energy use, solar output, and financial options. Our solar consultants can assess your system, review your bill, and help you determine whether it’s time to upgrade or stick with your current setup for a little longer.

How self-consumption and the ShineHub Virtual Power Plant (VPP)* can help replace lost pFIT payments

If you’re concerned about losing the financial benefits of your pFIT, there’s good news: modern solar and battery technology, combined with the ShineHub Virtual Power Plant (VPP), offers an excellent way to replace or even exceed the value you were getting. Here’s how:

Self-Consumption with a battery:

Instead of exporting your excess solar energy to the grid at low feed-in rates, a battery stores this energy for you to use when your solar panels aren’t producing power, such as during the evening or cloudy days.

By maximising self-consumption, you save money on every unit of electricity you avoid buying from the grid, which can cost 25 to 35 cents per kWh or more depending on your retailer.

Earn $0.55 per kWh with the ShineHub VPP

When your battery is connected to the ShineHub VPP, it can discharge stored energy to the grid during peak demand times. For every kWh of energy your battery provides, you earn a market-leading rate of $0.55 per kWh—significantly higher than current feed-in tariffs. 

This income supplements your energy savings and provides passive income from your battery, up to $200 per year. What’s more, if you choose to replace your aging solar panel system and add a battery on our $0 up front Powow PPA** you’ll also get an additional $20 in VPP credits subtracted off your monthly repayments adding a further $2,400 in savings over the 10 year plan. You can read more about the Powow PPA here. 

Why the ShineHub VPP makes a difference

The ShineHub VPP is more than just a way to earn money; it’s a community-driven energy solution designed to benefit you and your local grid. By participating, you help stabilise the grid by making your spare renewable energy available at peak times in case the grid requires extra energy to stay stable. Plus you’ll be contributing to a greener, more resilient energy system for your local Community. You can read more about how the ShineHub VPP works here. 

What’s the best move after pFIT ends?

Once your PFIT ends, exporting solar energy at today’s low rates may not be enough to offset rising electricity bills. In fact we recommend that you check your energy bill to see if you are getting any benefit from the PFIT currently. Your system may not be big enough to realise the benefits of the PFIT and any payments you are getting may be minimal due to the fact that there are now so many solar systems installed in SA that curtailment may be negating your tariff anyway. Plus with a sun tax now here, you could end up being penalised for exporting too much energy.

That’s where upgrading your solar system with a battery and connecting to the ShineHub Virtual Power Plant (VPP) comes in.

Ready to make the switch?

The end of Premium Feed-in Tariffs marks a turning point for early solar adopters. Upgrading to a battery-connected solar system and joining the ShineHub VPP isn’t just the next step—it could be the smart decision. Maximise your solar investment, reduce your bills, and take control of your energy future today. 

*Must sign up to the ShineHub VPP. ShineHub VPP terms and conditions apply.
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