With more and more businesses looking into commercial solar solutions to improve energy efficiency and save on costs, you may have come across the term ‘feed-in tariff’. Understanding what feed-in tariffs are, how they work, and how they can help you save on your electricity bills can be beneficial for your business.
What is a feed-in tariff?
A feed-in tariff (FIT) is a credit you can receive for any unused electricity sent back to the grid. Also known as a buy-back rate, it is usually a set rate per kilowatt hour paid as a credit on your electricity bill. The electricity that you feedback into the grid can be generated from a number of activities.
Installing solar panels allows you to generate your own electricity which can help you save on your energy bills. However, solar panels can sometimes generate more electricity than is needed, and the excess is then sent back into the electricity grid. Solar excess electricity is the most common type of feed-in electricity.
Eligibility and payment rates for Solar FITs vary depending on factors such as the amount of solar-generated electricity you feed back into the grid, the state you live in, and the date when your solar PV system was installed. FITs can also be offered at different rates depending on the retailer, and state.
Getting the most out of your renewable energy solution
To ensure your business gets the most benefit out of your renewable energy solution, there are a few things you can do to further improve your energy efficiency.
Using the electricity generated by your renewable energy solution is the cheapest electricity you will find, and better value for you, than exporting unused electricity.
Consider using timers on office appliances and equipment to schedule them to run during daylight hours and turn off at night. This will maximise the use of your solar generated electricity, minimising what you need to pay for from the grid. You can also set your lighting to a timer, or motion sensor so that they’re not left on overnight and using unnecessary electricity.
Something else to consider is whether you should also invest in battery storage. It’s important to keep in mind that while batteries allow you to store renewable energy for later use, they come with a high upfront cost. The benefits of investing in battery storage will depend on factors such as the size of your renewable energy system, battery cost, retail rates, and location. The amount of electricity generated by your system will also be affected by weather conditions and the system’s size. Before investing in battery storage, compare the overall benefits with the total costs, and get advice from your retail provider regarding the impact on your current feed-in tariff.
Batteries can also be used to export stored energy into the grid at “peak times” potentially earning more from feed-in tariffs. There are also some other systems that can generate electricity on-site, such as wind turbines, contributing to reducing your costs, and any excess electricity you may export.
Commercial solar solutions
To find out more about the commercial solar solutions that may be available to your business, or if you’re a Next Business Energy customer and you want to find out more about feed-in tariffs, contact our team.