Victoria’s  Essential Services Commission (ESC) has set new rates for solar feed-in tariffs from July 2019. The single rate will be boosted,  shoulder/off-peak time-varying rates will be increased and the peak rate slashed.

Single Rate Changes

From 1 July this year, the minimum price Victoria’s solar households will receive for the electricity they export to the grid will increase by just over two cents per kilowatt hour to 12 cents (currently 9.9 cents) under the “single” option; i.e. the same rate regardless of the time of the day the electricity is exported. This is the type of feed in tariff most Victorian solar households would be on.

The reason given for the increase:

“The feed-in tariff is based on forecast wholesale electricity prices in the futures market which rose between the draft decision and this final decision,” said the ESC’s Aaron Yuen.

Time-Varying Rate Changes

For time-varying feed in tariffs post-June 30, it’s a mixed bag. These rates are set for different periods of the day and are meant to better reflect the wholesale cost of electricity at the time it is exported into the mains grid. Electricity retailers aren’t compelled to offer a time-varying option as yet and its looking like they won’t be. Retailers can offer a single rate, time-varying rate or a choice between the two.

The ESC wasn’t so keen to point out in its media release is that the minimum peak time-varying tariff rate will drop substantially – however, rates for the other two periods will increase. The following shows the different rates and comparison between the current situation and post-June 30.

Under a time-varying arrangement, most of the electricity exported by a solar power system will receive the shoulder rate of 11.6 cents – an increase of 1.3c per kilowatt-hour. While the off-peak rate isn’t worth throwing a party over given the time of the day it covers, the current 29 cents on weekdays after 3:00 pm under the peak rate was particularly attractive – but that’s been cut by nearly half.

It’s important to note that both the single and time-varying rates are the minimum that can be offered and some electricity retailers already offer a substantially higher single rate. It’s crucial to compare electricity plans carefully as a high feed in tariff rate doesn’t always work out to be the best overall plan for solar owners.