Feed-in Tariff Guide for Solar ROI

Export price is one of the most important assumptions in a solar cashflow model.

What feed-in tariff means

A feed-in tariff is the price paid for solar electricity exported to the grid. In some markets it is a fixed policy rate. In others it is linked to wholesale prices, avoided cost, net billing, renewable credit rules, or utility-specific programs.

Why self-consumption often matters more

When retail electricity prices are higher than export prices, self-consumed solar energy is more valuable than exported energy. This means a smaller system matched to daytime load can sometimes have stronger economics than a larger system that exports most output.

Net metering and net billing

Net metering may credit exported kWh close to retail value. Net billing usually credits exports at a separate rate that can be lower. The difference can change payback, IRR, and recommended system size.

Some programs also cap system size, limit annual rollover, change credit value by time period, or reset unused credits. These rules matter because a calculator that uses one flat export price can miss limits that appear only in the utility contract.

Model export value conservatively

If the export tariff is uncertain, run at least two cases: the current contract rate and a lower fallback rate. This shows whether the project depends on a policy that may change. A system with strong self-consumption is usually less exposed to export tariff cuts than a system sized mainly for exports.

Questions to ask

• Is the export tariff fixed, variable, or subject to policy review?
• Does the tariff apply for the whole project life or only for a contract period?
• Are there grid fees, metering fees, or minimum bills?
• Does the customer have time-of-use pricing?
• Are incentives paid per kWh, per kW, or as tax credits?

Use the actual utility contract when available. Default tariffs are only screening assumptions.