Why Your Solar Credit Drops Off a Cliff

Your solar feed-in tariff may drop after a daily export limit. Here's how tiered solar credits actually work, and what to check on your plan.

You check your electricity bill and notice something strange: your solar panels are still exporting electricity, but the credit you receive seems much lower than expected.

This may not mean your solar system has stopped working. The problem could be the way your electricity plan calculates its solar feed-in tariff.

A feed-in tariff, sometimes called a solar buyback rate, is the amount your electricity retailer credits you for each kilowatt-hour of unused solar energy you export to the grid. The important detail is that not every plan pays the same rate for every kilowatt-hour.

What is a tiered feed-in tariff?

A flat feed-in tariff pays one rate for all eligible electricity you export — for example, 5 cents per kWh for every kWh exported.

A tiered feed-in tariff pays one rate up to a limit, then a lower rate after that limit — for example, 8 cents per kWh for the first 8 kWh exported per day, then 1 cent per kWh after that.

An Australian Government Energy Made Easy listing shows an example of a Queensland plan offering 8 cents per kWh for the first 8 kWh of daily solar exports and 1 cent per kWh thereafter — sometimes calculated as a daily average over the billing period. EnergyAustralia similarly notes that some of its higher solar buyback rates apply only to the first 10 kWh of average solar exports per day, after which the standard buyback rate applies.

That is why the large number in an advertisement may not be the rate you receive for all your exports.

A simple example

Imagine your plan pays 8 cents per kWh for the first 8 kWh exported each day, then 1 cent per kWh after that. If you export 14 kWh in one day:

First 8 kWh8 × $0.08 = $0.64
Remaining 6 kWh6 × $0.01 = $0.06
Total solar credit$0.70

Your average credit for the day is 5 cents per kWh, not 8 cents per kWh. If you exported more electricity than usual, your total credit might still increase, but the extra electricity may earn a much lower rate.

Why do retailers use tiers?

Solar exports generally occur during the middle of the day, when many households are producing electricity at the same time. This can reduce the wholesale value of electricity during those hours — the Queensland Competition Authority has explained that the value of daytime solar exports can fall when energy costs and wholesale prices are lower.

Retailers may therefore offer a higher rate for a limited amount of solar exports, a lower rate after the limit, a time-of-use rate, a special rate linked to a battery or virtual power plant, or a standard rate with no premium solar offer.

The result is that the highest advertised feed-in tariff is not necessarily the plan that gives you the lowest annual electricity bill.

Other reasons your credit may have fallen

A tiered tariff is only one possible explanation. Check whether:

Your electricity plan changed
A solar bonus or introductory offer ended
Your retailer reduced its feed-in tariff
Your export volume changed
Your meter data was estimated
Your plan uses an average export calculation
Your battery is keeping more energy for later use
Your panels or inverter have a fault
Your billing period is different from the previous bill
You are exporting at a different time of day

Feed-in tariffs also vary by state and region. The Queensland Competition Authority set the regional Queensland feed-in tariff at 6.006 cents per kWh for 2026–27, effective from 1 July 2026. In New South Wales, IPART's 2026–27 benchmark for all-day solar feed-in tariffs is 3.4 to 6.5 cents per kWh.

What to check on your electricity plan

Do not compare plans using the headline feed-in tariff alone. Check:

What rate applies to the first exported kilowatt-hours?
What rate applies after the daily limit?
Is the limit calculated daily or averaged over the billing period?
Is the rate available to all customers?
Is a battery or virtual power plant program required?
Are there export limits?
What is the daily supply charge and usage rate?
Does the plan include discounts or conditions?
Is the rate fixed or variable?
What is the estimated annual bill after solar credits?

The Australian Government's Energy Made Easy comparison service can use your solar export information to estimate solar credits for different electricity plans. It warns that when a plan has multiple solar feed-in tariffs, the lowest rate may be used if the system cannot determine which tariff applies to you.

How to get more value from your solar

Run the washing machine during daylight hours
Use the dishwasher while your panels are producing electricity
Charge an electric vehicle during the day
Adjust hot-water heating times
Review your electricity plan regularly
Compare your total annual bill, not just the feed-in tariff
Check whether a battery or time-of-use plan suits your actual usage

A higher feed-in tariff is not automatically better. If the plan has a high daily supply charge or expensive electricity usage rates, the overall bill may still be higher.

The bottom line

A solar credit can appear to "drop off a cliff" when your plan uses a tiered feed-in tariff. The first few kilowatt-hours may receive an attractive rate, while additional exports receive a much smaller credit.

The number that matters is not the advertised solar rate. It is your estimated annual bill after usage charges, supply charges and solar credits.

Not sure what your solar plan is really paying you? Compare the rate, export limit and total bill before you switch.

Compare Energy Plans →

This article is general information only. Electricity plans and feed-in tariffs change, so check your current electricity bill and plan documents before making a decision.