From this month households will receive just 5.5 for every kilowatt hour they pump back into the grid, after the Tasmanian Economic Regulator cut the solar feed-in tariff from 8.3.

Residential customers who had installed or signed up for micro-generation systems before August 30 last year are still eligible for the 28/kWh rate that was voluntarily paid by Aurora Energy before the regulator took over responsibility for setting the price in January.

Tasmanian Renewable Energy Alliance executive officer Jack Gilding said solar owners were being paid less than 6 for electricity that was then resold by Aurora to their neighbours for 27.

Mr Gilding expected anyone interested in installing solar panels would now choose smaller systems and maximise the amount of solar they used themselves. However, he said that as battery storage systems became cheaper, there could be dire consequences for the energy market. 

``In the medium term it will lead to people saying `do we actually need the grid?'' Mr Gilding said.

``If the people that can afford to get off the grid, do get off the grid, it means power from the grid becomes very expensive for everyone else.''

The group met Energy Minister Matthew Groom yesterday, urging him to order a review of the formula used by the regulator to determine the feed-in tariff and take into account the lower transmission costs required by using solar energy generated nearby. 

Mr Groom yesterday said it was a matter for the regulator.