Feed In Tarrif's Explained

A feed-in tariff (FiT, feed-in law, advanced renewable tariff[1] or renewable energy payments[2]) is a policy mechanism designed to encourage the adoption of renewable energy sources and to help accelerate the move toward grid parity.

Feed-in tariffs are a type of Power Purchase Agreement that identify certain technologies for higher rates.

FiTs typically include three key provisions

• guaranteed grid access
• long-term contracts for the electricity produced
• purchase prices that tend towards grid parity over time

Under a feed-in tariff, eligible renewable electricity generators (which can include homeowners and businesses) are paid a premium price for any electricity providers are obliged to take the electricity and pay them.

Different tariff rates are typically set for different renewable energy technologies, linked to the cost of resource development in each case. The cost-based prices therefore enable a diversity of projects (wind, solar, etc.) to be developed while investors can obtain a reasonable return on renewable energy investments

For Australian Households the 2 main feed in Tarrifs are:

• Net Feed In Tarrif
• Gross Feed In Tarrif

Net Feed In Tarrif Explained

A net feed in tariff, also known as export metering, pays the PV system owner only for surplus energy they produce.

Gross Feed In Tarrif Explained

A gross feed in tariff pays for each kilowatt hour produced by a grid connected system regardless of what the household uses