A feed-in tariff is where the owner of a a grid connected renewable energy system, like solar, is paid a premium (usually greater than the retail price of electricity) for the energy they feed into the grid (that their electricity utility can on-sell to other users.) There are two basic types of tariffs, net and gross. Net is only paid for any energy supplied to the grid that is greater than what was used. For example, if the system generated 12 units of power, but also drew down on the grid for 10 units, then the tariff would only be paid for the 2 units that were in surplus. With a Gross Feed-In Tariff (FIT) the premium is paid for the full 12 units.
Australia has no national feed-in tariff, with some of the states only just implementing their own disparate versions in the past couple of years. At the time of writing, the Australian Capital Territory (ACT) had the most generous solar program. In this our tiniest self governing region, they offer, to those of their 340,000 residents who have grid-connected photovoltaic systems, just over 50 cents AUD (38c USD) per kilowatt hour, for up to 10kw of solar capacity. This is roughly four times the retail price of electricity, depending on the plan an ACT customer is on. The program went live for residential solar systems in March 2009.
However, according to the recently announced Western Australian budget, the ACT has been trumped by a more generous feed-in tariff of 60 cents AUD (45c USD) per kilowatt hour. This high premium will only be open to those customers who also sign up for 100% GreenPower for the energy they purchase. With these rates it has been calculated by the WA Sustainable Energy Association that a solar system could be paid off in nine years. (Most solar panels are designed to function for 20-25 years.) The most populous Australian state of New South Wales (NSW) is currently deliberating on what form of feed-in tariff it will legislate. A result is expected by June 2009. The rest of country has a mish mash of tariff, but there remains a push for a national gross feed-in tariff of 80c /kWh.
For more informations: feedintariff
– from treehugger