It’s been reported the Victorian Government will no longer set minimum solar feed in tariff (FiT) rates, bringing it into line with several other states.
Currently, minimum rates are set annually by the state’s Essential Services Commission (ESC). For the 2024/25 financial year, the minimum flat rate feed-in tariff in Victoria is 3.3 cents per kilowatt-hour exported to the grid; and there are also minimums set for time-varying rate options.
But in January, the ESC proposed a flat rate of just 0.04 c/kWh for 2025/26 – basically nothing. Between 0 cents and 7.5 cents has been proposed for time-varying rates, with 0 cents covering most of the daytime “solar window” periods. After reviewing submissions on its draft decision, a final decision for 2025/26 is to be published by 28th of February; unless this reported change is to kick in beforehand.
I guess there’s not much point setting a minimum feed-in tariff going forward if it’s going to be pretty much zero for the foreseeable future. But as in other jurisdictions where a minimum isn’t set (South-East QLD, NSW, ACT, SA), electricity retailers will be able to continue to offer payments – and many elsewhere do. Of course, that doesn’t guarantee retailers in Victoria will follow suit.
The primary reason given for the ongoing slashing of FiTs in Victoria is due to a glut of solar energy exports in the grid during daytime hours – particularly between 10am and 3pm. This is increasingly pushing wholesale prices into negative territory at times. As has been pointed out, this is a good news story in that, in addition to the emissions reduction, it means lower retail electricity prices than they might otherwise be; benefiting all.
The plan to abolish minimum feed-in tariffs, reported on The Age, was to be announced on the weekend by Victoria’s Energy and Climate Change Minister Lily D’Ambrosio. But nothing has popped up on the VIC government’s press release page at the time of writing.
Look Over Here
While it appears an official announcement about abolishing minimum feed-in tariffs is yet to be made, Minister D’Ambrosio was spruiking the success of the state’s Solar Homes Program on Sunday. The scheme has been a driving force behind the uptake of solar panels, home batteries and energy-efficient hot water systems in the state.
According to the Minister’s office, more than 300,000 solar panels have been installed through the program – but it’s a safe bet her office meant solar panel *systems*. 2024 was a record year for Solar Homes, with more than 78,000 solar panels (systems), hot water systems and batteries installed.
Under the Solar Homes program, eligible households can access a $1,400 rebate to install solar panels (on top of the national rebate), and a further $1,400 interest free loan. There’s also a maximum $8,800 interest free loan to buy a battery (repaid monthly over 4 years), and a rebate of up to $1,000 to replace a hot water system1.
In the face of pitiful feed-in tariffs, maximising solar energy self-consumption has become even more important; so the loan offer for home batteries might start getting a bit more attention. As recently as early this month, the Solar Victoria battery loans page displayed a tally of how many remained for 2024/25; which was 1,254 as at February 4. For whatever reason, remaining loan numbers had been removed when I checked this morning.
In addition to the Solar Homes initiative, the long-running Victorian Energy Upgrades program also provides discounts on appliances ranging from heat pump hot water systems to cooktops. According to Minister D’Ambrosio’s office, the program has saved Victorians $440 million on energy-efficient appliances to date.
A summary of all that’s on offer in Victoria (along information for other states and territories) can be found on SQ’s rebates and subsidies summaries page. And wherever you are in Australia, you can compare solar feed-in tariffs in your neck of the woods using SolarQuotes’ electricity plan comparison tool.
Footnotes
- One of the eligibility criteria for a Solar Homes hot water incentive is the property hasn’t already received a solar battery rebate under the Program. ↩
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We have been deceived by all forms of government, electricity suppliers are receiving the electricity generated by roof top solar for free and then selling it back at enormous profits not to mention they can now charge us for putting power back in the grid. Government needs to offer heavily subsidised battery programs for those who invested in solar panel before battery’s became not only necessary but now a must.
John C
I agree with totally with john .c .We need to able to choose when we supply to the grid .With the ability to connect or disconnect as the electricity companies do.Or maybe disconnecting my rooftop solar system to the grid and suplie my self only as there are no longer any benefit for me to export .Now we see the government’s don’t care about climate change or people in a cost of living crisis and boosting big electicity companies profits .Nothing like getting something for free from someone then forcing them to buy it back.
In other words the government’s supporting the building more of these obnoxious wind fans, solar farms etc owned by corporations so they can continue to charge exorbitant fees for profit rather than promoting the use of home/building installed privately owned solar to save struggling home owners/renters some dollars.
Hi David,
Large scale wind and solar are the cheapest new build capacity bar none.
Those in power for the bulk of the last decade did little to build new power plants & we are going to see a lot of the existing stream engines in the system retire in coming years.
We simply have to get on with all of it.
The 2021-22 report confirms past years’ findings that wind and solar are the cheapest source of electricity generation and storage in Australia, even when considering additional integration costs arising due to the variable output of renewables, such as energy storage and transmission.
https://www.csiro.au/en/news/News-releases/2022/GenCost-2022?fbclid=IwAR2hwicNwOB9Qz5Nt2OeE-zIg6_kxzh51J88T5vkfQ73M_I8DI3o8MpQKJQ
https://m.youtube.com/watch?v=NqfBXaWuu-o
Are large scale wind and solar the cheapest power options around? Or is that dependent on your assumptions e.g. how much battery storage is required for nights, windless periods, or heavy cloud and\or rain?
I agree there’s been a dearth of new construction in the power section, but is that really surprising? With the instability, or worse, of government policy, aside from thumb on the scales for wind and solar, what private company would invest in a new power plant?
Note the heckling Albanese received when discussing offshore wind farms while in Wollongong. Apparently blue collar folk are just as unhappy to have their environment destroyed by wind farms as those in multi-million dollar homes. But unlike those who can donate generously to Labor, or hire expensive lawyers, their views don’t seem to count.
But of course rural communities have the same issue with solar and battery farms – they don’t want them, they especially don’t want the added risks and costs they bring, but they have little to no say because their communities don’t matter to state Labor.
Hi George,
Wind and solar are the cheapest new generation available, even when you include batteries for firming, as confirmed by the CSIRO & AEMO.
As for the hecklers, chief among them was this guy :
why the distribition venfots cany be fotcrdvto pay fot feedin at the current cost of generation is beyond me.
Lets just give it ti distributors for free… Well NO, go off grid and keep it all to ourselves and thry will have NOTHING… but watch the nuber of people wanting their power decrease to NOTHING…
Hi Graham,
I’ve written a bit about this before so click here for a few reasons, otherwise maybe a Bex and a good lie down are in order?
the answer is to play their game. change to a time of use tariff AND buy a battery.
there is a 30% discount between 9am and 4pm. the more solar the better and the bigger the battery the better.
This is the way forward.
People that already put in a solar system should now be getting a discounted rate for putting on a battery system. An interest free loan is just not going to help for $13,500 battery
Never actually worried about getting paid for the solar as we use what we generate
I wish solar panel owners formed a collective group. They could then negotiate with retailers, how much the are willing to pay for the electricity exported during the day.. Currently, solar panel owners are better off using their own electricity the best they can.. They should also begin limiting and or cutting off their export completely.. This is a setting in most inverters. Once all of us threaten to do this, perhaps someone will negotiate a better price..
Join Amber Electric and see what the real rate your solar is worth. I’m sure you’ll move back to a normal retailer due to lots of negative FiT times
Agree Scotty. There’s nothing like a couple of months with Amber to put paid to the idea that retailers get rich off of our roofs.
It’s 8.30am in Brisbane. All four mainland NEM states have negative spot prices – generators are paying consumers to use electricity.
If a retailer is paying 4c FiT right now, then that kWh is costing them 4c to the household plus the 3c negative spot price they have to pay to the NEM and then the 3c opportunity they lose by not buying it at the negative price. All up buying from the rooftop is *costing* a retailer 10c/kWh to the bottom line.
Anyone who thinks they will hurt retailers by stopping their exports doesn’t understand the current state of the market. Retailers would be delighted, network operators would be relieved and generators would be ecstatic – that’s the message the market is giving you – please stop exporting!
Yes but the flip side is – i export for nearly nothing – and retailers (the majority of whom do not buy on the spot market – but are hedged against it) – get my power for almost free – and then sell it to the guy next door on his Retail plan where he is paying $0.20 per KWH (or higher) – without it having to even leave the suburb. The gentailers are going to have a day of reckoning once battery prices come down far enough that it is more economical to deploy a home battery to peak shave
I agree Glen.
The bottom line has always been that retailers make newer tariff constructs more complicated because the NEM is also complicated. As a small generator you can wail and gnash teeth… Or truly understand and implement changes in behaviour and add automation so that you can turn a bad thing into a good thing. With the understanding, the automation and the battery you may even makeoney again from solar… Just not in the middle of the day, and not when you don’t have any… Queue the battery….
Andy.
P. S if I wasn’t clear enough you’ll need to learn home automation… Is it simple… No… Is it beyond the average home owner..
probably… Does life suck for some… Yes it does. Is learning HA beyond most who lurk here, not most but some… Will you sweat as you learn it yep. Will you do the 2 steps forward 1 step backward shuffle as you learn it.. Yes on good days, bad days may be more back than forward, but it can be done
On the upside at least some energy retailers seem to be re-aligning their ToU tarifs to the solar glut. When my previous flat rate plan expired late last year (a very good deal it was too) I ended up on a ToU tarif. That was fine, I’m in the category of people who download consumption data for the last 1-2 years and then create a spreadsheet to properly compare tarifs, so I calculated that the ToU tarif was in the ballpark compared to other options. However, it was annoying to see that the off-peak and shoulder periods were still the old midday shoulder/overnight off-peak so little incentive or reward for shifting load into the the solar glut (in fact somewhat the opposite).
Fast-forward a few months and – prompted by this article – I see that my retailer has updated their ToU offering to align with the solar glut. By my calculation it’s about $150/yr cheaper than my current plan. It’s weird they didn’t send me an email to let me know…
Hi Ljsjl,
It is weird, almost as if the retailers would rather be opaque and just ignore people, hoping customers won’t notice there are better deals available.
Next thing you know they’ll be making ToU so complex that nobody will be able to properly compare plans and they’ll give up…
So much for competition.
I use this comparison service. Pay your subscription and the promise they’ll save you more than it costs.
Set up automatic forwarding of your bills and they’ll let you know when better deals crop up.
https://www.billhero.com.au/
Full disclosure, if somebody signs up using the code below, both they and myself will get an additional two months of Bill Hero for free.
bh11811-nmp1668684689
In Victoria, I am with OVO and even though I’m on 3.3cFIT, I get free power between 11am and 2pm as I on on their EV plan and 8c/kWh between Midnight and 6am. I’m now thinking of getting some batteries to cover 3pm and 9pm as my rate is 57c. Doing this I think I can have the batteries pay off between 4 and 5 years. (Not Tesla batteries)
Hi Mik,
FREE POWER FROM 11AM TO 2PM… Can you please repeat it louder for all those up the back who are wailing bout being “ripped off” for the solar power they generate.
Nobody complains much that tomatoes are cheap in summer & expensive in winter, or that city parking is $30/day & free at night. Yet they think the glut of solar power at midday is worth the same as what’s available at 7pm.
The networks have been running off peak hot water at midnight for decades, yet people haven’t got their heads around the idea of off peak being midday now.
Energy is cheap when you’re awake, we must get smart about using it.
Sorry Anthony, but while we are repeating the obvious to those objective people who watch the space,…. now that daytime solar generated electricity off our own roof is worthless (or we are curtailed by export limiting), it makes even more sense to buy cheap resistive storage hot water systems rather than the expensive and less reliable heat pump hot water services. I wonder if “Mr Smith” gets an apology from Kim Wainwright (wainwrong) with boxing gloves writing for solar quotes in the hot water debate https://www.solarquotes.com.au/blog/heat-pump-vs-resistive-hws/..
Fill up the roof with solar and self consume using the cheapest appliances rather than expensive energy efficient ones, for sunshine wasted is very highly inefficient.
Its good to have a debate, but better if bias is left out and facts are pursued.
David
Last year my solar system of 26.6kW saved me $18,800
Avoided purchase of $10000 petrol I put 10,000kWh through two EVs that travelled 50,000kms and change.
This is the best thing going and i’ve called it
Feed In Transport $1/kWh is about right for 10L/100kms and $2 / litre vs 20kWh/100kms with all the charging and cable losses included.
I also avoided at least 3 services at $350+ each $1000 there.
Whilst one might say you can buy a small hybrid that uses less fuel, a model 3 RWD Tesla will do 15kWh/100kms very easily and still be fun to drive and not need any visits to a petrol station, dealer, service station adding to the economic windfall that is the EV.
On top I claimed the work kms by logbook and the taxman gave me several thousand dollars, lots of people can do even better and do a novated lease without FBT enabling no GST on the purchase and payments in pre -tax income.
On top of that I avoided buying 4-6000kWh a year that they reckon the average house uses, call that $2k
And I avoided buying at least 60,000MJ of gas and the connection fees to have it connected to my house call that $2500+.
In all, I our house used a completly reasonable 22,000kWh out of the 28,000kWh we generated.
My retailer also paid me $2300 in referral credits for those people who are now using them thanks to my recommendation.
Out of all of that I got paid $1026 in FIT credits.
Out of all the savings and credits $18,800 (not including the $7k tax refund here that gets chalked to the car itself) just $1026 was FIT.
That’s just 5% of my net benefit.
That loss is not significant and doesn’t vary the economics.
I have however invested in 15kWh of Istore home batteries it should have an ROI of around 10% and that will make up for the loss of my FIT as I will be buying some 2000kWh less peak rate energy each year from my retailer.
/\ This ladies and gents is where we should all be headed /\
Don’t get mad, get EVen
Just put my name down for turn-off day and time
This ripping the workers/ drones got to stop.
Hi,
Question.
It appears Victoria will reduce FIT from $0.033c to $0.004.
This would be an 88% reduction.
With most households restricted to 5kWh feed-in, what social and business impact if all owners changed their inverters from low exports to ZERO feed back to Grid ?
Not everyone can be at home to max out use, like HWS, dishwasher, washing machine, AC, etc.
On days when there is heavy use, the State Govt might have to rethink the subsidy arrangement, as the power generation from Distributors would be stressed ??
Just something to ponder, maybe owners need to look at their combined power, no pun intended !
Hi Tony,
Without storage on the network the solar yield is a bit worthless at the moment.
As we get more EVs, batteries, pumped hydro etc then we’ll need all the energy we can get especially as the bulk of our coal fleet will be gone in just 11 years.
I hope the situation can be turned around ASAP before too many people opt for the “bugger you Jack” option of zero export or the folly of going off grid in the suburbs.
I’m not a member of ‘bugger you Jack’, however we have little leverage in the system. We have a Federal (low impact) and a State election in 2026. Maybe the current State Govt might reconsider its policy re FIT and even those with batteries. Trouble is the majority of households have little input, and no batteries of suitable load capacity.
Maybe a Zero campaign, for a set period, or TOU, could add leverage and let our Pollies and public servant policy designers look at more innovative and fair system for the ‘common households’. Again just something thoughts to stimulate discussion.
Most owners are excluded from self use during the day and contribute significant resources to State and Distributors, now with little financial compensation/recognition.
Hi Tony,
I take what you mean but it’s a bit like trying to organise a run on the banks when there just aren’t many branches left to set up a guillotine in front of.
TOU plans do need to be fair but we have to realise the whole system is in flux at the moment because there’s not much storage available to make the glut of solar energy valuable.
Our real challenge is making the energy market fair for everyone. At the moment zero bills are available to those with roof space and a healthy budget, while those who can least afford it are stuck with horribly inefficient housing and expensive energy. The former can even defect from the grid, leaving the poors to pay ever increasing fixed charges.
Privatisation was the worst thing we ever did.
No chance of the the government will make that illegal.
Could we all go off grid, stuff the retailers and government, someone tell me how and l will be happy to start the ball rolling, they have done nothing but ripped us off
Hi Stephen,
The grid is a great public good, like reticulated water and sewers that carry your waste away.
Going off grid in the suburbs makes no sense. I’ve installed remote area power for 15 years and I assure you there are two absolute rules.
1) You need a generator for a week of overcast winter days
2) The generator is the most unreliable part of the system
For $400/year you can’t buy and maintain a decent diesel generator, let alone fuel it. And your neighbours will hate you when it’s droning away for hours on end.
What’s likely most valuable are a few links here; I hate to recommend the Zuccerburg empire but
https://www.facebook.com/groups/MyEfficientElectricHome
My Efficient Electric Home has a great community of 110 000 like minded Australians who are ready and willing to offer ideas and valuable expertise on electrification.
Getting off gas is also a no brainer. It’s cheaper, easier to clean and better for your health.
https://www.rewiringaustralia.org/
https://electrify2515.org/
Typical out of touch government over paid seat polishers and the ESC don’t give a rats about people it’s all just more profit for electricity companies!!!!!!!!
It’s time they sponsored home batteries , with a healthy grant no the bs interest free , currently payback is still 10 years so full retail price is not economical smart
I purchased solar due to government rhetoric and incentives, I should have known it was a con . I have a government loan they encouraged me to take out and I am now indebted for a product that will become par compared with what it was when I bought it. Why is the government letting the electricity suppliers and resellers dictate to them policy. I suspect there are levers being pulled here that us consumers will never get visibility of .
Hi Peter,
One of the most enlightening pieces I’ve seen is a few years old now but still worth a watch…
https://m.youtube.com/watch?v=NqfBXaWuu-o
Ultimately batteries falling below about 15c/kWh LCOS will kill the Duck curve:
If you have existing solar, you will save money by adding a battery to peak-shave. Nothing the Greedy Griddies can do to stop you; you’ll always have your own cheap generation during the day.
If you don’t, you can still peak-shave with only a battery using tariffs like Amber, while The Duck still has a belly.
Both these market responses will give the Duck’s belly liposuction and a decapitation.
In the Dead Duck state, you’ll have to install solar PLUS battery for cheap power or pay unto Greedy Griddy whatever they demand.
My issues with reducing the the FiT to zero:
– It’s unlikely to ever go back up
– Setting FiT to zero will mean that there’s no reason to enable exports, but whilst there’s lots of days of low or negative wholesale pricing we know that wholesale prices in winter months are very high. Look at winter last year with the Peak RRP over >$150 / MWh (15c / kWh) for nearly all NEM states..
– It disincentivizes the install of solar by reducing payback period
IMO, there should be variable FiT based on month that reflects the value provided to the grid. Eg. $0.01 for September – April (zero for 11-2), $0.05 for May – August.
just shows the government care nothing for renewable energy unless it can profit from it. its time we all set our inverters to zero export.
Well I guess this is up to the power supply companies. In my case the FiT has dropped steadily, but the first ~400 kWh/month is 12c a kWh, 5c thereafter. If they pull the rug out from that then I shall be switching my system off in winter if I am not in the house.