The Essential Services Commission has recommended slashing Victorian solar feed-in tariffs to just 0.04 cents per kWh.
The Commission recently released a draft decision on the minimum amount electricity retailers must pay solar customers for the electricity they export into the grid. The decision recommends significantly lowering the current minimum from 3.3 cents to a flat rate of 0.04 cents per kWh.
This is down from 4.9 cents in 2023–2024, 5.2 cents in 2022–2023, 6.7 cents in 2021–2022 and 10.2 cents in 2020–2021.
The Commission also recommended a time varying model which may be offered to customers instead of or in addition to the flat rate. These rates are outlined below.
Time varying minimum rates | ||
Option 1 | ||
Overnight
Weekdays: 10 pm to 7 am Weekends: 10 pm to 7 am |
Day
Weekdays: 7 am to 3 pm, 9 pm to 10 pm Weekends: 7 am to 10 pm |
Early evening
Weekdays: 3 pm to 9 pm Weekends: n/a |
7.52 c/kWh | 0.00 c/kWh | 5.85 c/kWh |
Option 2 | ||
Shoulder
Every day: 9 pm to 10 am 2 pm to 4 pm |
Off-peak
Every day: 10 am to 2 pm |
Peak
Every day: 4 pm to 9pm |
1.40 c/kWh | 0.00 c/kWh | 6.50 c/kWh |
Source: Essential Services Commission
Commission chairperson Gerard Brody said the pricing methodology remains unchanged from previous years and considers wholesale electricity, costs of solar exports, avoided costs faced by retailers, and other social and environmental factors.
“The lower feed-in tariffs reflect the widespread uptake and success of solar panels in the last few years.
“The amount of rooftop solar in Victoria has increased by 76 per cent since 2019, from approximately 446,000 systems to 787,000,” he said.
“This has both increased supply and reduced demand for electricity during the middle of the day, resulting in decreasing value of daytime solar exports.”
The proposed decision is open for public comment until January 31.