The Essential Services Commission has released its draft decision on the minimum amount energy retailers are required to pay solar customers for electricity they feed into the grid, opening the decision for consultation until 31 January 2025.
The proposed minimum flat feed-in tariff is 0.04 cents per kWh starting 1 July 2025, down from the current 3.3 cents per kWh in 2024–25.
The draft decision also proposes two time varying feed-in tariffs ranging from 0.0 to 7.5 cents per kWh.
While the Essential Services Commission sets the minimum feed-in tariffs, retailers can offer feed-in tariffs above the minimum amounts.
The draft decision is open for consultation on Engage Victoria until 31 January, with a final decision on minimum feed-in tariffs to be published by 28 February 2025.
Essential Services 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, as Victorians have heeded calls to reduce carbon emissions and industry has increased renewable energy generation.”
Commissioner Brody said the amount of rooftop solar in Victoria has increased by 76 per cent since 2019, from approximately 446,000 systems to 787,000.
“This has both increased supply and reduced demand for electricity during the middle of the day, resulting in decreasing value of daytime solar exports,” he said.
Commissioner Brody also said that, despite falling feed-in tariffs, independent analysis highlights that households with solar installations have cheaper electricity bills than those without, saving up to $895 a year.
“Solar households can maximise their savings by shifting appliance hungry electricity usage to daylight hours during peak solar production times to avoid paying much higher retail costs.”
More information about the minimum feed-in tariff, including why it changes each year and how it is calculated, is available on the Essential Services Commission website.
