Rooftop solar to benefit from more generous feed-in tariffs in Victoria.
Rooftop solar to benefit from more generous feed-in tariffs in Victoria. Image Credit: Jack Haskell

The Victorian Government has announced a doubling of the minimum feed-in tariffs paid for rooftop solar generation, in changes to come into effect on 1 July 2017.

In setting the increased minimum feed-in tariff, the Victorian Essential Services Commission valued electricity exported by residential installations of rooftop solar at 11.3 cents per kilowatt-hour, an increase from the previous minimum price of 5 cents per kilowatt-hour.

The tariff will be paid to households and businesses who feed excess electricity from their roof-top solar systems back into the grid. The Victorian Government estimates that 130,000 households will benefit from the changes.

The valuation of exported electricity considers the wholesale price of electricity and the avoided costs of network infrastructure investment that is made unnecessary by roof-top installations.

The Essential Services Commission has also factored in the “social costs of carbon” and “avoided human health costs” for the first time, following amendments to the feed-in tariff legislation passed earlier this month.

In increasing the minimum tariff by a total of 6.3 cents per kilowatt-hours, the commission determined that higher wholesale electricity prices contributed 3.8 cents to the increase.

The inclusion of the “social costs of carbon” and human health benefits contributed to an additional 2.5 cents to the tariff increase.

Victorian Minister for Energy, Environment and Climate Change Lily D’Ambrosio has claimed it as a win for consumers, with the increased feed-in tariffs reflecting a fairer payment for the electricity generated by residential solar systems.

“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.”, Minister D’Ambrosio said.

“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.”

“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.”

The Clean Energy Council praised the Victorian Government in moving to fairer solar tariffs, saying that it was a positive outcome given the degree to which rooftop solar generation has historically undervalued.

“The Victorian Government is leading the nation in recognising the contribution that solar power makes to the electricity system. Solar is massively undervalued across the country in terms of its contribution to taking the strain off the grid during times of intense demand, such as summer heatwaves.” The Clean Energy Council’s Director of Smart Energy Mr Darren Gladman said.

“We are expecting further improvements to the framework for rewarding solar households for their renewable energy, including more favourable feed-in tariffs during times when electricity is worth substantially more in the market. This has been a long time coming, and the Victorian Government should be recognised for investigating this issue much more thoroughly than other states through its Essential Services Commission.”

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