Solar Feed-in Tariff Plummets to Record Low of 3.3 Cents per Kilowatt-hour

Electricity retailers in Victoria will now pay households a reduced minimum feed-in tariff for the rooftop solar power they export to the grid. The rate has been cut by 32 per cent, dropping from 4.9 cents per kilowatt-hour to just 3.3c/kWh.

The new record low fixed rate solar Feed-in Tariff (FiT) for the state, set by Victoria’s Essential Service Commission, will take effect in July this year. Additionally, the minimum time-varying solar feed-in tariffs have been decreased to a range between 2.1 and 8.4 cents per kWh, marking a reduction of 17 to 47 per cent compared to the previous rates for 2023-24.

Reasoning Behind the FiT Cut

The Essential Service Commission explained that the decision to lower the FiT was based on the increasing number of households with rooftop solar, which has led to a surplus of supply during daylight hours. This surplus has reduced the demand and subsequently lowered wholesale electricity spot prices, resulting in a forecast of lower solar weighted wholesale electricity prices for 2024-25 compared to the previous year.

Despite opposition from solar customers, the ESC stated that the feed-in tariffs must align with the value of solar exports as mandated by legislation. The lack of alternative