There is a wide variety of different reasons for residential homeowners to switch to solar energy in Victoria. This includes the cost savings of relying less on the grid or a social conscience of using environmentally friendly clean energy by using solar panels.
Feed-in tariffs are still one of the main drivers for going solar. Although the amount received by the consumer for exporting their excess clean energy back to the grid has decreased a lot since the early days, it still enables solar power system owners to generate a credit towards their bill for surplus energy.
For those who are shopping around for the best solar feed-in tariff rates in VIC, we’ve provided for you a table below which gets updated regularly. We’ve also given other information we recommend you consider so you can make a well thought out decision.
Time of use or Flat Rates?
You may be thinking at this point what the better option to take in Victoria is – a single rate or time varying rate? We go into an analysis about the time varying rate along with a modified solar payback calculator tool to help you make an informed decision.
Just be aware that currently electricity retailers in Victoria aren’t legally required to offer the time varying rates at this stage. Some may only decide to provide the single rate only instead.
Going forward, it will be interesting to see how retailers go about providing the solar feed-in Tariffs and time varying rates in the future. With the ongoing changes to rates, we’ll keep an eye on this development at Solar Choice.
The below table shows the minimum and maximum FiT rates per electricity retailer. Note that it doesn’t show the time varying feed-in tariff.
|Retailer||State / Territory||Min Solar FIT||Max Solar FIT|
What solar system size limits exist in Victoria?
Originally the Australian electricity grid was designed with unidirectional power flow in mind, i.e. one way flow of electricity along a series of networks starting from the generator to the household owner.
Currently with over 2 million home solar systems across Australian rooftops, network operators are reporting issues with congestion and voltage rise across the grid. The main way they limit this issue is through the implementation of size limits for solar inverter capacities and export limits for exported solar energy.
In Victoria there are 4 Distributed Network Service Providers (DNSPs) and each have different restrictions on what can be installed. See our guide below.
|United Energy||Single phase: 10kW system size limit
3-phase: 30kW system size limit.
|Citipower/Powercor||Single phase: Up to 5kW system size limit (by inverter)
3-phase: Up to 30kW system size limit (by inverter at 10kW per phase)
|Solar and other generation|
|Jemena||Single phase: Up to 10kVA (by inverter)
3-phase: Up to 30kVA (by 10kW per phase inverter)
|Embedded generation enquiry|
|Ausnet||Single phase: Up to 10kW system size limit
3-phase: Up to 30kW system size limit
|Solar capacity pre-approval|
Caveat to these rules per network: The information in the table above serves as a general guideline to get you started. Just be aware that the actual implementation will differ depending on your area and specific network. We recommend that you discuss your options with your solar installer who should be an expert in getting solar systems approved by your local network.
- Is the limit strict or is there a way to get around it?
In some cases your network may allow you to install a larger system then their standard rules, but you may have to meet certain requirements. This could involve having export limitations or paying an additional cost for upgrades to the physical network in your area.
- Does the limit apply to solar inverter capacity exclusively? Or does it also include battery inverter capacity?
It’s important to note the distinction here. Some networks don’t count battery inverter capacity towards their stated maximum size limits because of the fact that battery systems with their own dedicated inverters generally don’t automatically export surplus solar electricity to the grid. This is in contrast to modern, grid-connected solar systems which do.
- Will you need to install additional technology on your solar system which has an ‘export limit’? What about ‘solar smoothing’?
This prevents your system exporting solar into the grid over a specific threshold, such as the 3kW limit for a 5kW system. This prevents the issue of solar going automatically into the grid and adversely affecting the quality in the local network.
Some networks will also require what is known as a ‘solar smoothing’ device. This is a small battery bank that stops any sudden drops in your solar system energy output due to clouds passing overhead. In particular, these devices help make the solar output on ‘thin’, spindly grids in regional areas more manageable.
What retailer has the best solar feed-in tariff in VIC?
At the time of writing (June 2021), Tango Energy has the best solar feed-in tariff in VIC, whereby the maximum a customer can get is 20 cents per kilowatt hour (c/kWh). This only applies for the first 3.5 kWh each day and only if the customer installs solar through Tango Energy’s partner. 1st Energy comes in second with 15.2 c/kWH with Momentum Energy at third with 13.5 c/kWh.
Is there a minimum feed-in tariff in VIC?
Luckily there is a minimum feed-in tariff for solar customers that is mandated by the Victorian government.
In Victoria, electricity retailers with more than 5,000 customers are mandated to offer a minimum solar feed-in tariff rate to their customers. This is divided into what is known as a ‘single rate’ (Flat Fit rate) and a ‘time varying rate’.
As of the 1st of July 2021, consumers in Victoria have the option to choose one of these rates:
|Flat Rate||n/a||n/a||6.7 c/kWh|
|Off peak||10pm – 7am||10pm – 7am||6.7 c/kWh|
|Shoulder||7am – 3pm and 9pm -10pm||7am – 10pm||6.1 c/kWh|
|Peak||3pm – 9pm||n/a||10.9 c/kWh|
History of solar feed-in tariffs in Victoria
The Premium Solar Feed-in Tariff was introduced on 1st of November 2009 in Victoria offering residentials a rate of 60 c/kWh for exported solar energy. This program closed to new applicants on the 29th of December 2011. Participants of this scheme will receive the premium rate until 2024.
After December 2011, Victorians were offered a Standard Feed-in Tariff which offered a ‘one for one’ rate based on the customers electricity rate, or a Transitional Feed-in Tariff of 25 c/kWh. These premium rates were scheduled to end in 2016 and also closed for new applicants at the end of 2012.
Since then the Victorian Essential Services Commission has dictated a minimum feed-in tariff each financial year to the industry which is designed to reflect the wholesale market plus a premium to reflect a green benefit.
You can see the history of the minimum feed in tariffs in Victoria in the below table:
|Wholesale electricity prices||5.7||4.6||8.1||6.8||8.9||7.3||4.0|
|Minimum feed-in tariffs||6.2||5.0||11.3||9.9||12.0||10.2||6.7|
In 2017, the Victorian Essential Services Commission proposed a variable feed-in tariff be introduced along with the above mentioned flat rates. In 2018 this went as high as 29c/kWh during peak times.
The logic behind the variable FiT rate was the fact that electricity is worth more on the grid in the latter part of the day, i.e. between 3pm – 9pm. So an incentive was created to nudge solar system owners to design systems or shift electricity demand to export a higher amount of electricity back into the grid later in the day.
This new variable FiT rate opened discussion for potentially higher adoption for battery system owners to ‘play the game’ of selling their stored energy during peak periods in order to capitalise on the financial incentives.
Fortunately for residents of Victoria, there is a minimum feed-in tariff they receive. Although going forward, the revised solar feed-in rates for 2021/2022 will see a noticeable drop.
As always solar feed-in rates are only part of the puzzle when assessing an electricity plan and when determining whether investing in solar power is a good idea. Hopefully this helps you get started.