The Reality of Feed-in Tariffs in 2026

Why are solar feed-in tariffs so low in Australia?

Feed-in tariffs (FiTs) are dropping because there is simply too much solar power on the grid during the middle of the day. Wholesale electricity prices frequently drop below zero at midday. Energy retailers are no longer willing to pay high prices for solar power they do not need.

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If you bought a solar system ten years ago, you probably received a premium feed-in tariff. The government paid you 40 or 50 cents for every unit of electricity you exported to the grid. You treated your roof like a tiny power station, exporting as much as possible to generate a massive credit on your bill.

Those days are over. And they are never coming back.

In 2026, the average feed-in tariff across Australia sits between 3 and 6 cents per kilowatt-hour (kWh). Many retailers are introducing zero-cent tariffs, or even charging "sun taxes" for exporting power during peak solar hours.

Here is why the economics of solar have fundamentally changed, and how you need to adapt.

The Duck Curve Explained

The problem is supply and demand.

Ten years ago, the grid needed power during the day to run offices and factories. Rooftop solar provided that power perfectly.

Today, there are over 4 million residential solar systems in Australia. On a sunny afternoon, these systems flood the grid with so much electricity that supply vastly exceeds demand. The wholesale price of electricity — the price retailers pay generators — actually drops below zero.

Retailers are essentially being charged to absorb your excess solar power. Consequently, they pass that cost on by slashing your feed-in tariff.

The "Sun Tax" Reality

The situation has become so extreme that network operators (the companies that own the poles and wires) are introducing two-way pricing.

This means that if you export power to the grid between 10:00 AM and 2:00 PM, when the grid is already overloaded, you may actually be charged a small fee (often called a "sun tax" or export tariff). Conversely, if you export power between 4:00 PM and 8:00 PM, when demand spikes, you will be paid a premium.

This is designed to encourage behavior change. The grid no longer wants your power at noon. It wants your power at dinner time.

How to adapt and stay profitable

You cannot rely on exporting power to pay off your solar system anymore. The strategy must shift from exporting to self-consumption.

1. Shift your load: Run your heavy appliances (dishwasher, washing machine, pool pump) during the middle of the day when your panels are producing peak power.
2. Heat your water: If you have an electric hot water system, install a diverter. This device takes excess solar power that would normally be exported for 4 cents and uses it to heat your water, saving you from buying grid power at 30 cents later that night.
3. Consider a battery: If you are hit with a sun tax, or if your feed-in tariff drops to zero, a home battery suddenly becomes much more financially viable. You store the midday power and use it during the evening peak.

The golden era of the feed-in tariff is dead. But rooftop solar is still an incredible investment, provided you use the power you generate.