Australian households with rooftop solar panels are facing a notable reduction in their electricity bill savings, as major retailers across New South Wales, Queensland, and South Australia implemented significant cuts to solar feed-in tariffs (FiTs) from July 1, 2026. This widespread adjustment reflects the evolving dynamics of the National Electricity Market (NEM), particularly the increasing abundance of solar generation during midday hours.
The Independent Pricing and Regulatory Tribunal (IPART) in NSW set its benchmark range for 2026–27 at 3.4 to 6.5 cents per kilowatt-hour (c/kWh), a decrease from the previous year’s 4.8–7.3 c/kWh. This benchmark, while non-mandatory, signals the broader market trend and provides a reference point for consumers.
Several major energy retailers followed suit with their own revised rates:
- EnergyAustralia cut its NSW flat rate FiT from 4c/kWh to 3c/kWh.
- AGL removed FiTs entirely for customers on Standard Retail Contracts, setting the rate at 0c/kWh from July 1, 2026.
- Ergon Energy in regional Queensland saw its FiT drop from 8.66c/kWh to 6.006c/kWh.
- Momentum Energy applied cuts across multiple states: NSW decreased from 5c/kWh to 3c/kWh, Queensland from 2.9c/kWh to 2c/kWh, and South Australia from 2.5c/kWh to a mere 0.8c/kWh.
Victoria, which has not had a minimum FiT floor since July 2025, also saw a reduction from Momentum Energy, dropping from 1.1c/kWh to 0.9c/kWh from August 1, 2026.
“The market value of electricity changes depending on demand and supply. In the middle of the day, demand in households is low… As more Australians use solar to generate electricity, there is a surplus of electricity during the day more often. As the value of electricity drops more often, solar tariffs are dropping (and are sometimes set to zero).”
Why the Cuts Are Happening
The primary driver behind these declining feed-in tariffs is the sheer volume of solar power now being generated across Australia, particularly during the middle of the day. Australia boasts one of the world’s highest rates of rooftop solar adoption, with over 3.7 million systems installed. This has led to periods where solar generation significantly outstrips demand, pushing wholesale electricity prices down, sometimes into negative territory. Retailers pay FiTs based on the wholesale value of the electricity exported to the grid, which diminishes when supply is high and demand is low.
This shift in market dynamics means that while solar panels continue to generate clean energy, the financial returns from exporting excess power are becoming less lucrative. For solar owners, this underscores the importance of maximising self-consumption rather than relying heavily on export credits.
Impact on Solar Households
For many Australian households, particularly those who installed solar systems years ago with higher FiT rates, these changes will directly impact their energy bill savings. The goal for solar owners now increasingly shifts from selling excess power to actively using it within their homes. This involves strategic energy management, such as running high-consumption appliances like dishwashers, washing machines, and pool pumps during daylight hours when solar generation is at its peak.
Households considering new solar installations or upgrades should factor these lower FiT rates into their financial modelling. The focus should be on sizing a system that closely matches daytime energy consumption patterns, potentially alongside battery storage. For guidance on appropriate system sizing, refer to our guide on What Solar System Size Do You Really Need in Australia 2026? Future-Proofing for EVs & Electrification.
Strategies for Maximising Savings
With reduced feed-in tariffs, solar owners have several avenues to maintain or improve their energy savings:
- Increase Self-Consumption: Shift heavy electricity usage to solar-rich midday hours. This directly reduces the amount of electricity imported from the grid at retail rates, which are significantly higher than current FiTs.
- Invest in Battery Storage: A home battery system allows you to store excess solar energy generated during the day and use it during the evening peak, when grid electricity is most expensive. This effectively increases your self-sufficiency and reduces reliance on the grid. Costs for home battery systems in Australia typically range from AUD $7,500 to $17,000 installed in 2026, with the federal Cheaper Home Batteries Program offering an upfront discount of approximately 30%. For more information, see our guide to Home Battery Backup for Blackouts in 2026: Systems & Costs from $7,000.
- Explore Time-of-Use Tariffs: Many retailers offer time-of-use (ToU) plans, which feature different electricity prices at different times of the day. By understanding your tariff structure, you can align your consumption with cheaper off-peak or shoulder periods, particularly when FiTs are low.
- Monitor Your Usage with a Smart Meter: Smart meters provide detailed insights into your energy consumption and export patterns, enabling more informed decisions about when to use or store power. If you have a smart meter, you can also explore options like the new Solar Sharer Offer, which, from July 1, 2026, provides eligible households in NSW, SA, and SE QLD with three hours of free midday electricity (up to 24kWh daily) to encourage consumption during periods of high solar generation. While this is primarily for consumption, it reflects the market’s need to utilise midday power and can be a complementary strategy for some solar owners. For more on smart meters, read Unlock $800+ Savings: Your Smart Meter Guide for Australia 2026.
Summary of Retailer FiT Changes (Effective July 1, 2026)
| Retailer | State | Old FiT (c/kWh) | New FiT (c/kWh) | Notes |
|---|---|---|---|---|
| IPART Benchmark | NSW | 4.8–7.3 | 3.4–6.5 | Benchmark range, not mandatory floor |
| EnergyAustralia | NSW | 4.0 | 3.0 | Flat rate |
| AGL | NSW, SA, QLD | Variable | 0.0 | For Standard Retail Contracts |
| Ergon Energy | Regional QLD | 8.66 | 6.006 | |
| Momentum Energy | NSW | 5.0 | 3.0 | |
| Momentum Energy | QLD | 2.9 | 2.0 | |
| Momentum Energy | SA | 2.5 | 0.8 | |
| Momentum Energy | VIC | 1.1 | 0.9 | Effective from 1 August 2026 |
These changes signal a maturing solar market where the value of exported power is increasingly tied to real-time grid conditions. While the upfront cost of solar continues to fall, the emphasis for maximising returns has definitively shifted towards intelligent energy management and self-consumption.