Imagine this: the sun rises over your home in New South Wales, and as its rays hit your rooftop solar panels, they quietly go to work. By the end of the day, not only have they powered your home, but they’ve also earned you money—up to $1,200 a year. This isn’t a dream or an exaggeration; it’s the reality for 89% of NSW homeowners with solar systems in 2025. But how does this work? And why are feed-in tariffs (FiTs) such a game-changer for solar energy adoption in Australia? Let’s break it down.

What Are Feed-in Tariffs and How Do They Work?

Feed-in tariffs (FiTs) are payments made by electricity retailers to homeowners for the excess solar energy their systems export back to the grid. In simple terms, when your solar panels generate more electricity than your household consumes, the surplus is sent to the grid. Retailers then pay you for each kilowatt-hour (kWh) of energy exported.

In NSW, FiTs are voluntary contributions from electricity retailers, guided by benchmarks set by the Independent Pricing and Regulatory Tribunal (IPART). For 2025, IPART recommends rates between 4.9 and 6.3 cents per kWh for all-day exports, with some retailers offering rates as high as 12 cents per kWh. These payments can significantly offset electricity bills and even generate a profit for households with optimised solar systems.

Why Are NSW Homeowners Earning $1,200+ Annually?

1. High Solar Adoption Rates

With over 30% of NSW homes equipped with solar panels, the state leads Australia in residential solar adoption. This widespread uptake is driven by rising electricity costs (averaging 33.62 cents/kWh in Sydney) and government incentives like Small-Scale Technology Certificates (STCs), which reduce installation costs.

2. Optimised Solar System Sizes

The average NSW household installs a 6.6 kW solar system, which produces approximately 24 kWh of electricity daily under optimal conditions. Assuming half of this energy is exported to the grid at an average FiT of 6 cents/kWh, homeowners can earn around $1.44 daily—or approximately $525 annually—from exports alone.

However, many households maximise their earnings by adopting time-of-day FiTs offered by some retailers. For example:

• Exporting during peak evening hours (4 PM–9 PM) can fetch rates as high as 12 cents/kWh, doubling potential earnings.
• Households with battery storage systems can strategically store daytime energy and export it during peak tariff periods, further boosting income.

Combined with self-consumption savings (reducing reliance on grid power), total annual benefits often exceed $1,200 for optimised systems.

The Role of Retailers in Maximising Earnings

Not all retailers offer equal FiT rates or terms. In 2025, providers like ActewAGL and Engie lead the pack with maximum rates of 12 cents/kWh, while major players like Origin Energy and AGL offer lower averages. Choosing the right retailer is crucial for maximising returns.

Key Considerations When Selecting a Retailer:

• Rate Duration: Some high FiT rates are promotional and last only 12 months.
• Daily Supply Charges: Low FiT rates may be offset by lower fixed charges.
• Peak vs Off-Peak Rates: Time-of-day tariffs reward strategic energy exports.

How Solar Systems Deliver Long-Term Financial Benefits

1. Offset Rising Electricity Costs

Electricity prices in NSW have steadily increased due to wholesale market volatility and infrastructure costs. By generating their own power, solar households shield themselves from these hikes while earning credits for surplus energy.

2. ROI on Solar Investments

The average cost of installing a 6.6 kW system in NSW is around $6,000–$8,000 after rebates. With annual savings and earnings exceeding $1,200, most systems achieve payback within 5–7 years, delivering pure profit thereafter.

3. Increased Property Value

Homes with solar systems are more attractive to buyers, commanding premiums of up to 7% in competitive markets. This added value further enhances long-term ROI.

Environmental Impact: A Win-Win for Homeowners and the Planet

Beyond financial benefits, feed-in tariffs incentivise renewable energy generation, reducing reliance on fossil fuels. A typical NSW household with a 6.6 kW system offsets approximately 8 tonnes of CO2 emissions annually, equivalent to planting over 130 trees each year.. This contribution aligns with Australia’s commitment to achieving net-zero emissions by 2050.

Real-Life Case Study: The Smith Family in Western Sydney

Let’s bring this concept to life with a real-world example:

The Smiths installed a 6.6 kW solar system in late 2024 at a total cost of $7,500 after rebates. Their system generates an average of 24 kWh daily:

• They consume 12 kWh during the day.
• The remaining 12 kWh is exported to the grid at an average FiT rate of 8 cents/kWh (thanks to their retailer’s time-of-day tariff).

Here’s how their annual savings break down:

With these savings, the Smiths will recover their investment within just over four years while enjoying reduced bills and environmental peace of mind.

How to Maximise Your Solar Earnings in NSW

To join the ranks of homeowners earning $1,200+ annually from feed-in tariffs:

1. Choose a High-Efficiency Solar System: Opt for Tier-1 panels and inverters with proven performance.
2. Compare Retailers: Use comparison tools to find providers offering competitive FiT rates.
3. Consider Battery Storage: Batteries enable time-shifting exports to maximise peak-period earnings.
4. Monitor Your System: Regular maintenance ensures optimal performance and extended lifespan.
5. Stay Informed: Keep track of policy changes affecting FiTs or solar rebates.

In New South Wales, feed-in tariffs represent more than just financial incentives – they’re a gateway to energy independence and environmental stewardship. By investing in solar today, you’re not only reducing your electricity bills but also contributing to a cleaner future for Australia.