Independent economic regulator seeks feedback on proposed minimum feed-in rates for solar electricity

The Essential Services Commission is seeking feedback on its draft decision on the minimum feed-in tariffs that energy companies will pay Victorian solar customers from 1 July 2024.

In the draft decision released today, the commission proposes a flat minimum feed-in tariff for the 2024–25 financial year at 3.3 cents per kilowatt hour (kWh). Proposed time-varying minimum feed-in tariffs range from 2.1 to 8.8 cents per kWh.

The proposed minimum solar feed-in tariffs for 2024-25 reflect the changing value of solar exports amid increased solar generation in the market and low wholesale electricity prices during sunlight hours. The proposed minimum feed-in tariffs are lower because overall wholesale electricity prices are forecast to be lower in the 2024–25 financial year – especially at the times when solar customers export most of their power to the grid.

Executive Director of Price Monitoring and Regulation, Marcus Crudden says that while the proposed minimum feed-in tariffs have reduced, consumers have a choice of energy retailers and can maximise their own savings.

“The commission sets the minimum feed-in tariffs that energy retailers must pay solar customers to protect customers from being paid too little for the electricity they feed back into the grid. While the commission sets the floor, retailers can offer higher feed-in tariffs and customers should shop around.”

Victorians continue to embrace the environmental and economic benefits of roof-top solar, which accounts for 99.9 per cent of small-scale renewable energy generation in Victoria¹. The main financial benefit for solar customers is the savings to their electricity bills from using the electricity they generate to avoid paying retail rates for electricity.

Mr Crudden says that solar customers can maximise the benefits of rooftop solar by planning their daily energy use.

“Solar customers will get the best return by using the electricity they generate – for example by running your air conditioning on sunny afternoons to pre-cool your home, and delaying the start of power-hungry appliances like your dishwasher and washing machine until the middle of the day.”

The commission is seeking feedback on the draft decision from all stakeholders, including solar customers, energy retailers and all Victorian consumers.

You can read the draft decision and have your say on the Engage Victoria website until 5pm on 22 December 2023.

The commission will consider feedback and updated cost forecasts when determining the final decision. The final decision on the minimum feed-in tariffs to apply for the coming financial year must be published by 28 February each year.