Solar in 2026: You Don’t Make Money Selling It

If you have asked anyone about solar in the last twelve months you have heard some version of this: “the feed-in tariff is only five cents now, so the payback is gone.” It is the line in every news article and most installer Reddit threads.

It is wrong. Not slightly wrong. Wrong in a way that flips the recommendation.

I ran every state through the solar self-consumption calculator. Here is what came out.

Stop counting the wrong cents

Every kWh your panels produce goes to one of two places. Either you use it inside your house at the moment it is generated (the dishwasher is running, the AC is on, the EV is charging), or it goes out to the grid and you get paid the feed-in tariff for it.

The kWh you use inside your house is worth the retail rate, because the alternative is buying that kWh from the grid at retail. The kWh you export is worth the feed-in rate, because that is what the retailer pays.

Those two rates are nowhere near each other in 2026.

Retail rates from Canstar and AER 2025-26 averages. FiT rates from published retailer tariffs (regulated minimums in TAS and NT; market rates elsewhere).

The spread is the number that pays for your solar. In South Australia, every kWh you self-consume is worth 37 cents more than the same kWh exported. Over a year, that is the difference between solar being a marginal investment and solar being one of the highest-return things you can do to a house.

Where most of your solar slips out the back door

A typical 6.6 kW system in Sydney produces around 9,200 kWh a year. The catch: the panels make that energy between 9am and 4pm, and most households are at work or school during those hours. The fridge, the standby loads, and maybe a hot water cycle are about all that is running.

Without intervention, a typical household self-consumes about 30% of what its panels produce. The other 70% exports at the feed-in tariff.

That is the math the “solar is dead” headlines are secretly running. They are right about one thing: a system sized around an old export-heavy business model does not pay back the way it used to. They are wrong to conclude solar does not pay. The answer is to flip the business model. Move the consumption to where the production already is.

Lever one: load-shifting (free, partial)

Some of your daily energy use is already movable. The dishwasher can run at noon instead of 8pm. The pool pump can run at midday. An EV plugged in overnight can be told to wait until the sun is up. An air-conditioner can pre-cool the house at 2pm so the evening load is smaller.

None of these cost a cent and a disciplined household can lift self-consumption from about 30% to roughly 50%. That is real money: for the Sydney house above, the move from 30% to 50% means about $570 a year of extra spread captured (around 1,850 extra kWh moved from a 5c FiT to a 36c retail offset).

The ceiling on load-shifting is the evening peak. Between roughly 6pm and 9pm, the household has its biggest draw (cooking, hot water, heating or cooling, screens) and the sun is already down. There is no panel kWh to shift into that window. To capture the spread on evening load, you need to store some of the day’s production.

Lever two: a battery (paid, near-complete)

A 10 to 13 kWh home battery sits between the panels and the house. During the day it charges from solar that would otherwise have been exported. At dusk it starts discharging into the house and runs through the evening peak. By the time you wake up, it is empty and ready to charge again.

That single piece of hardware does what load-shifting cannot: it moves daytime production into evening consumption. With a typical 10 kWh battery, household self-consumption jumps from ~30% to roughly 70%. The remaining 30% is the production that exceeds what your house plus the battery can absorb on long summer days.

This is the part that flipped. When feed-in tariffs were 16 cents and retail was 25 cents, the spread was 9 cents. A battery that captured the spread on 2,500 kWh a year was earning $225, not enough to pay for itself. With a 36 cent retail rate and a 5 cent feed-in tariff, that same 2,500 kWh is worth $775. The battery economics did not change. The spread did.

Three states, three versions of the same story

SA: the highest spread in the country

South Australia has the highest retail electricity rate in the country at 43 cents/kWh and a feed-in tariff of around 6 cents. That 37-cent spread is the largest in Australia. Every kWh you keep inside the house is worth 6x what it would have earned exported.

For a typical 4-bedroom Adelaide household (around 7,400 kWh of annual use), a 6.6 kW system produces about 10,200 kWh a year. Without a battery, the household self-consumes around 2,700 kWh at retail (worth ~$1,170) and exports ~7,500 kWh at the feed-in tariff (worth ~$450). Total annual benefit: about $1,620.

Add a 10 kWh battery and self-consumption jumps to roughly 6,300 kWh at retail (worth ~$2,730), with ~3,900 kWh exported (worth ~$235). Total: about $2,960 a year. The battery alone is adding roughly $1,340 of value per year on top of the panel-only number. A 10 kWh battery installs at about $11,000 gross; the federal Cheaper Home Batteries rebate (~$2,700 in 2026) brings net out-of-pocket to about $8,300. That pays back in just over six years and then continues to print $1,340 a year for the rest of its life.

VIC: deregulated FiT, biggest unrealised spread

Victoria deregulated its feed-in tariff in July 2025. The previous 10.2 cent regulated minimum disappeared and competitive retailers now offer somewhere between 2 and 5 cents. The blended average sits at about 3.3 cents.

Retail in VIC is lower than SA (about 29 cents) but the spread is still 25.7 cents. For a typical 4-bedroom Melbourne household (5,800 kWh annual use, lower than other states because gas still handles heat in many homes), a 6.6 kW system on Melbourne’s 4.0 peak-sun-hours makes about 8,200 kWh a year. Without a battery the household absorbs roughly 2,150 kWh at retail. Annual benefit: about $825.

A 10 kWh battery lifts that to about $1,560 a year. But VIC is the state where matched sizing matters most. A smaller 5 kW system with an 8 kWh battery delivers about $1,300 a year, 83% of the bigger system’s benefit for several thousand dollars less upfront. The reason: with only 5,800 kWh of annual load, a 6.6 kW + 10 kWh combination spends a fair part of summer with full panels and a full battery and nowhere for the extra production to go except the 3.3c feed-in tariff. In VIC, bigger is not better: better is matched.

TAS: the one state where exports still half-pay

Tasmania keeps a regulated minimum feed-in tariff of 8.8 cents, the highest in the mainland market. Retail is also lower at 27 cents. The spread is 18 cents, half the SA figure.

A Hobart 4-bedroom household uses a lot more electricity than its mainland equivalent: typically 11,000 kWh a year, because cold winters and small gas networks mean most of the heating runs on electricity. That gives a battery plenty to absorb. A 6.6 kW system produces around 8,000 kWh a year (lower output than mainland due to cooler climate and shorter winter days).

Without a battery: about 2,600 kWh self-consumed at retail (~$700) plus 5,400 exported (~$475). Total: about $1,175 a year. With a 10 kWh battery: ~6,050 kWh at retail (~$1,635) plus ~1,950 exported (~$170). Total: about $1,805 a year. The battery is adding around $630 a year, less than half what the same battery would earn in Adelaide.

That changes the recommendation. At ~$8,300 net out-of-pocket after the CHB rebate, a 10 kWh battery in Tasmania pays back in roughly 13 years, which is the same order as the battery’s warrantied life. Because Tasmania’s regulated 8.8 cent feed-in tariff genuinely rewards export, many TAS households come out ahead with panels only and no battery, or a smaller battery sized just for the evening peak. This is the one state where the “export the surplus” mental model is not yet wrong.

The 2026 sizing rule

Solar quotes in 2026 are still being written like it is 2019. Big arrays, generous talk about “earning from your roof”, paybacks calculated against an export rate that no longer exists. The right mental model is the opposite:

1. Size the battery to your evening load. Look at your last six months of bills, work out what you use between 4pm and 9pm, and pick the smallest battery that covers it. For most households that is 8 to 13 kWh. More than that is cosmetic.
2. Size the solar to charge the battery, then cover daytime use. Add daytime household load (fridge, pool pump, anything you can shift to midday) to the battery capacity, and pick the smallest array that produces that amount on a winter day. For most households that lands between 5 and 8 kW.
3. Do not size for export. Anything past the battery-plus-daytime ceiling earns the feed-in tariff, which is 3 to 6 cents. Some of it never reaches the grid at all because inverters clip on sunny days. There are better places for that money: insulation, draught sealing, an induction cooktop, a heat-pump hot-water system. All of them have bigger spreads than a marginal extra kW of panels.

Tasmania is the exception. The 8.8 cent regulated feed-in tariff keeps export economics meaningful and the 18 cent spread does not pay back a battery inside its warranted life. If you live in TAS, oversizing the panels and skipping the battery (or buying a small one sized just for the evening peak) usually wins. Run the calculator for your postcode before committing to either shape.

Three things to check before you sign

A smart meter. All of the above assumes the retailer can see what your house is doing on a half-hourly basis. If your meter is still a flat-rate accumulation meter, ask the retailer to swap it (free in most states) before installing solar. Without a smart meter, you are stuck on an accumulation tariff and a lot of the spread maths do not apply.

A time-of-use plan. Once the meter is in, ask for a time-of-use tariff. Most retailers price peak (4pm to 9pm) at 40 to 55 cents and off-peak (10pm to 6am) at 20 to 25 cents. A battery on a flat tariff captures one spread (retail minus FiT). A battery on a time-of-use tariff captures a second spread (peak retail minus off-peak retail) on the nights you over-discharge. The combination is what makes a battery genuinely lucrative in 2026.

Wholesale-spot plans (Amber, Globird, Energy Locals).A handful of retailers pass the live wholesale price through to the customer instead of charging a fixed retail rate. On those plans both the buy and the sell price change every five minutes and the spread can flip several times a day. The displacement-vs-export logic still holds in spirit, but the annual averages in this post do not. Wholesale plans reward smart battery automation more than any flat or time-of-use tariff, and they need their own analysis: the retailer’s own historical modelling tool is the right place to look, not a calculator built around average retail and FiT rates. One catch worth flagging up front: a wholesale-plan household can keep earning back larger batteries (15 to 20 kWh) on extra arbitrage cycles where a flat-tariff household tops out around 10 to 13 kWh, but only if you commit to staying on the wholesale plan for the battery’s working life. Switch back to a fixed retail rate later and the extra capacity goes back to exporting at the feed-in tariff.

Run your own numbers

The figures above are for a typical 4-bedroom home in each state. Your spread depends on your retailer, your tariff structure, your usage shape, and what you have already installed. The calculator works out the exact numbers for your postcode and household, and shows where solar and battery fit in the optimal sequence of upgrades for your situation, including the Cheaper Home Batteries rebate and state-specific schemes like VIC’s Solar Homes and SA’s Home Battery Scheme.

Where these numbers come from

Retail electricity and feed-in tariff data from Canstar, AER, and published retailer tariffs for 2025-26. Self-consumption fractions (~30% without battery, ~70% with) from CSIRO and Solar Analytics field studies. Household consumption baselines from the AER 2020 Residential Energy Consumption Benchmarks. Solar production estimates from Bureau of Meteorology peak-sun-hour data by climate zone. Full data source list on the data sources page.