The minimum Feed-in tariff for solar PV owners in Victoria will more than double due to changes the Dan Andrews Labor Government has made to the regulation of pricing for solar PV owners.
Current minimum feed-in rate is 5 cents per kilowatt hour. Victoria’s independent regulator, the Essential Services Commission (ESC), has determined the new feed-in rate will be 11.3 cents per kilowatt hour and will apply from 1st July.
About 130,000 solar citizens will reap the benefit of this increased Feed-in tarriff.
“With this new feed-in tariff, the Andrews Labor Government is ensuring that households with solar panels are more fairly compensated for the power they send back into the grid.” said Minister for Energy, Environment and Climate Change Lily D’Ambrosio.
The state Labor Government made changes to the feed-in tariff legislation, to better reflect the true energy value of the electricity supplied to the grid. The changes reflect recommendations of the Essential Services Commission’s Final Report into the Energy Value of Distribution Generation, which was tabled in Parliament in September last year.
Included in the new tariff is a payment for the environmental and social value of energy provided to the grid.
“The former Coalition Government reduced the amount Victorian solar households received to 5 cents per kilowatt hour and voted against the bill to make this change.” said Ms D’Ambrosio.
“This is a great win for the 130,000 solar households all over Victoria, we promised a fairer system and that’s exactly what we have delivered. ”
Determination of the residential feed-in tariff was based upon three conditions: wholesale electricity market prices; distribution and transmission losses avoided by the supply of small renewable energy generation and; avoided social costs of carbon and avoided human health costs attributable to a reduction in air pollution.
The increase of 6.3 cents on the existing feed-in tariff was derived from 3.8 cents from wholesale market price increases and 2.5 cents attributable to the avoided social cost of carbon.
The Essential Services Commission also warned that multi-rate tariffs may be set after the first year, to allow for consultation with energy retailers on the implementation of multi-rate feed-in-tariffs in future.
“It is encouraging to see a fairer price will be offered to the domestic producers of electricity from the middle of the year in Victoria,” said Shani Tager, Senior Campaigner, Solar Citizens.
“We hope to see other regulatory bodies in Australia correcting the market failure that is seeing, in some states, solar producers being paid next to nothing for the power they produce,” said Tager.
All the other states and territories have a relatively low base tariff price of around 5-8 cents per unit offered for rooftop solar electricity sold back to the grid. This is less than a quarter of the cost of electricity the retailer charges for electricity accessed from the grid. (Check out the EnergyMatters information page on Feed-in tariffs for different states and territories)
“We are determined to see them follow the lead of Victoria and get a fair price for their solar – right across the country,” said Tager.
The change in the solar feed-in was announced first in October 2016, although the rate was still to be determined.
Lily D'Ambrosio has been busy in her portfolio with recent major energy projects announced in Victoria including:
- three solar generation projects worth $500million in north-west Victoria with a total output of 320MW and capable of powering Victoria’s three biggest regional centres Geelong, Ballarat and Bendigo
- government contract which will deliver two new wind farms in Mt Gellibrand and Kiata which will bring forward $220 million of new investment and create hundreds of new jobs.
- a 75 MW of new large-scale solar farms in regional Victoria, including 35 MW to power Melbourne’s tram fleet
- a 116 wind turbine project given the go-ahead in western Victoria in December 2016
- $5 million to help up to 1,000 homes cut their energy bills in the Latrobe City, Wellington and Baw Baw Shires, with a further $6 million to fund similar upgrades
- $5 million for large-scale energy storage initiatives to strengthen our electricity system
The Coalition parties are already campaigning on energy affordability and reliability, but they ignore the threat of climate change and it's impacts which is the driving force for transitioning our energy system to zero emissions.
Most people polled want to see an expansion of renewables, including Federal Labor's 50 per cent by 2030 target.
The Victorian Government in the Victorian Climate Act has set a goal of zero emissions by 2050, which is in accord with Federal Government commitments under the Paris Agreement on climate.
Similarly, Victoria has set interim targets for renewables at 25 per cent by 2020, and 40 per cent by 2025. These are both achievable without too much expense, especially as pumped hydro and grid batteries will likely be added to resolve some of the problems of solar and wind intermittency.
Already this month Lily D'Ambrosio announced a public tender for building a 20MW battery as part of the Victorian electricity grid.
- Media Release, 28 February 2017 - Solar Feed-In Tariffs Double In Victoria
- Essential Services Commission - Minimum electricity Feed-in tariffs