Support given for new solar tariffs in Victoria

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The Alternative Technology Association (ATA) has expressed its support for new solar feed-in tariffs expected to be introduced in Victoria on 1 July 2018.

The Essential Services Commission has published its draft decision on the minimum feed-in tariffs.

The most important aspects are:

  • The minimum tariff is to be reduced from 11.3 cents to 9.9 cents a kilowatt hour. This is because major increases in the size and number of solar systems and the imminent opening of several solar farms in the next 12-18 months will appreciably lower wholesale electricity prices during the solar generation period
  • The introduction of a time-variant tariff, with peak, shoulder and off-peak rates for different times of day. Energy retailers will be required to offer at least one of the two new tariffs in 2018-19. Time variant rates are 29 cents/kilowatt hour for peak (3pm-9pm), 7.2 cents off-peak (10pm-7am) and 10.3 cents shoulder (all other times). From 2019-20 only a time-variant tariff will be offered

While the ATA said it “broadly” supports the new feed-in tariffs, it does have concerns in areas including:

  • Consumers and the renewable energy industry will need guidance on how to best account for time-variant tariffs when calculating bill savings or payback periods when installing a new solar system
  • The methodology for determining solar-weighted energy value (used to calculate the single-rate tariff) needs to be verified against changes in average system size since the data it was based on was collected
  • The Commission needs to explain more clearly why it uses a different methodology for calculating the energy value for each tariff
  • The Commission needs to explain how the new tariffs will apply to customers still on the premium feed-in tariff.

The ATA also commented on some aspects of the tariff regime that are relevant but may fall outside the scope of this decision.

These include:

  • Urging the Commission to introduce a critical peak component to the tariff as soon as possible
  • Advocating for including the value of avoided human health costs when remunerating owners of distributed renewable energy systems for the value they create
  • The ATA recommends that the Commission and the Victorian Government take these points into consideration when finalising and communicating the new tariffs 

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