Solar tariff in Victoria will be Extra for Solar Users from July
June 19, 2017

Victorian households with solar panels are now in for a pleasant surprise because they will now receive more than twice the amount of cash they were getting for the excess electricity from the solar system fed into the grid. This change will come after 1st July 2017 and would be calculated at 11.4 cents per kWh fed into the grid.

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This hike in minimum tariff for surplus electricity fed into the grid was announced by the Essential Services Commission, which is the state regulator in this regard. The announcement also stated that the rise reflects the increase in the price of wholesale power as well as the social and environmental value for clean energy. This action comes after several reductions in the feed-in tariff for solar energy, across Australia with installations dropping significantly and price of solar panels also falling steeply.

2011 witnessed a steep fall of 35 cents from 60 cents that was the tariff in 2009. Later this tariff further came down to peg between 5 and 7 cents arrived at with the help of a formula and calculated annually.

The Andrews government also stated that the premium rate of 60 cents would continue to be available till 2024 for those who opted for it early on in 2009 and the new tariff would apply to others with solar which he has put at about 130,000 households

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Lily D’Ambrosio, the Energy Minister, also stated that the new tariff would pave the way to compensating households more fairly for the power they sold to the grid. She also added that last year the coalition had brought down the rate to only 5 cents per kWh and voted to oppose the changes proposed to reflect the cost of energy supplied to the grid better. She said a fairer system was promised at that time and the present decision is in fulfilment of that promise.

David Southwick, the spokesman for opposition energy, added that the increase was significantly higher than what was flagged last year by the government and accused that the government was trying to garner more greens voters. According to his estimates, the current decision would lead an increase in power bills for households without solar by about $15.75 every year and cite a report by Grattan Institute, in 2015 Australian households without solar panels had in effective terms paid as much as $14 billion to subsidise households with solar panels. Mr Southwick added that the future of solar should be through community distribution and battery storage and not by making households without solar panels to pay more for their energy use.

Greg Barber, the Greens leader also stated that the increase was inadequate considering that retailers of electricity levied about 30 cents per kWh for power consumed off the grid. He added that the present offer, therefore, is a rip-off.

Damien Moyse, the research and policy manager at Alternative Technology Association, stated that having a government which is serious in the area of renewable energy was heartening. He added that across Australia, solar businesses and households provide enhanced value to the national market for electricity compared to the narrow methodology employed in calculating feed-in tariffs till now.

According to Euro Solar Group the cost of manufacturing and installing PV panels will continue to plummet due to Economies of scale and Increased competition.

Nick Aberle, the campaigns manager at Environment Victoria, said that this is the better time for installing solar panels.

Energy Matters estimated that a 5.2kW solar system in Melbourne together with a battery system could bring the financial benefit of over $1,800 per Year at the present rate of feed-in tariff, depending on the consumption profile and installation scenario.

Financial Gain

Further, it was encouraging to note that the Victorian Government is following through one of its important promises during the election. Recent data from the CER (Clean Energy Regulator) indicates that over 295,000 solar systems have been installed across Victoria covering a higher number of voters. The Clean Energy Council was also quick to praise the move and stated that the new system is a better recognition of the real value of solar energy when it is fed back into the grid. The higher feed –in tariff now available will also act as a further incentive for home owners to install battery system which is becoming even more affordable at a rapid pace, though it continues to be out of the reach for some sections of the society.

Reece Turner, the consumer campaigner at Solar Citizens, added that it was for the first time that Australia recognised the importance of solar energy and the Victorian government had taken the lead to show the world that the benefits of rooftop solar installations/distributed solar energy need be better valued.

The Victorian government’s decision could not have at a better time, and it augurs well not just for the solar energy sector but for Australia as a nation. With increased emphasis on battery storage solution and dwindling prices of solar panels, there is no reason why Victoria cannot position itself in the forefront of a green energy revolution. Apart from the roof-top solar systems for individual homes, the higher feed-in tariff should act as a great incentive for commercial organisations, hospitals, large warehouses and similar facilities to quickly garner the benefits of solar power systems. Apart from the financial gains, such a move would also immensely contribute to a healthier environment for Australians.

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