Update 3 Sept 2012: The Victorian government has announced that systems must be installed and all paperwork submitted by 30 September 2012 in order to secure eligibility for the Transitional or Standard Feed-in Tariffs. Once secured, rates will remain in place until 31 December 2016. Read more.
Although the Victoria Premium Feed-in Tariff came to a close at the end of September 2011, the state still offers some of the most generous incentives for home solar photovoltaic (PV) power installations in the country: a 25c/kWh rate on a Transitional Solar Feed-in Tariff scheme for systems 5kW or less, and a one-for-one rate on its Standard Feed-in Tariff for systems over 5kW and up to 100kW. This article is an overview of the two schemes.
How do the Victorian solar PV incentive schemes operate?
Transitional Feed-in Tariff for solar PV systems up to 5kW: 25c per kilowatt hour, net
The Transitional Feed-in Tariff is the scheme that comes into effect from 1 January 2012 and is designed to replace Victoria’s now concluded Premium Feed-in Tariff. It only applies to solar PV systems. Citing the falling price of solar PV installations, which it says have dropped by 50% since 2009, the government decided that it was appropriate to more than halve the subsidy rate to 25c/kWh.
Payback periods under the new scheme are expected to be the same as those of systems installed under the former 60c rate–10 years or less. The 25c/kWh rate is slightly higher than the cost of residential solar electricity in Victoria, and will remain available for eligible signed-up customers until the end of 2016–5 years. As the Transitional FiT is a net scheme, solar power generating customers will be credited by their electricity retailer on their bills for each unit of electricity that they feed in to the grid. They will also reap the benefits of offsets on electricity bills when solar electricity is used directly in the home.
Transitional Feed-in Tariff eligibility requirements:
-Systems must be no larger than 5 kilowatts (kW) based on their ‘nameplate capacity’–i.e. the total nominal power of the solar modules combined. A 5kW system will usually produce sufficient power to significantly reduce electricity bills for most residential households. (Systems over 5kW are still eligible for the Standard Feed-in Tariff.)
-The system must be installed on your principal place of residence (if it is for a household).
-If the system is to be installed on a small business or community organisation, there is a limit of 100 megawatt-hours (MWh, or 1,000kWh) of electricity consumption per year. If consumption is above this level, you are not eligible for the Transitional FiT
–Residences may only claim one solar system per site.
–Businesses and organisations that operate across multiple sites may claim one system per site.
–Premises must have bi-directional metering in place. Bi-directional meters measure electricity flows to and from the grid and records them on a half-hourly basis.
–Your electricity retailer must have more than 5,000 customers to be required to provide the Transitional Feed-in Tariff to you. Smaller companies are not required to do so.
–The scheme will have a capacity cap of 75MW (compared to 100MW under the previous scheme)–customers must enter the scheme before the cap has been reached.
Standard Feed-in Tariff solar systems, wind power, hydro, and biomass generators above 5kW and up to 100kW: One-for-one, net
Under the Standard FiT, for every unit of electricity exported to the electricity grid, homes with solar systems will be credited at the same rate as their retail electricity tariff. Retail rates in most of Victoria currently hover between 17 and 23c/kWh, depending on the retailer and the plan (with ‘green’ electricity plans coming in significantly higher), and are on the rise.
Those who operate systems that feed into the electricity grid under the Standard FiT would be set to receive more than 25c/kWh when prices eventually reach this level. As with the Transitional scheme, solar feeders-in will benefit financially in two ways: credit for exported electricity, and a reduced amount of electricity that needs to be purchased from the grid. The Unlike the Transitional scheme, whose 25c rate is locked in until 2016, the Standard FiT has no end date. However, under a recent government inquiry the scheme may be relegated to a NSW-style, ‘competition-based’ scheme, with the rate being reduced significantly for those who are currently receiving it.
The purpose of the Transitional scheme, therefore, is to encourage the uptake of small-scale solar PV in the short-term, whilst the purpose of the Standard scheme is to incentivise installation of larger systems and more varied technologies in the longer term.
Standard Feed-in Tariff eligibility requirements:
–Operating a grid-connected solar PV system of over 5kW and up to 100kW in capacity. Smaller PV systems are only eligible for the Transitional FiT scheme.
-Alternatively, operating a non solar PV system (e.g. wind and hydro power) of any capacity up to 100kW and that feeds electricity into the grid. (Additional eligibility criteria may apply.)
–Both residential and business customers may apply
–Can be claimed on holiday homes
© 2011 Solar Choice Pty Ltd
He is now the communications manager for energy technology startup SwitchDin, but remains an occasional contributor to the Solar Choice blog.
James lives in Newcastle in a house with a weird solar system.
Latest posts by James Martin II (see all)
- Solar Power Wagga Wagga, NSW – Compare outputs, returns and installers - 22 May, 2020
- Solar Panels Ballarat | Compare costs & installers | Solar Choice - 3 May, 2020
- 5kW Solar Systems: Pricing, Output, and Returns - 27 April, 2020