Victoria regulator reports another big cut in solar tariffs, sees no real value in exports

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Victoria’s energy regulator reported another cut to the state’s recommended minimum feed-in tariff, less than six months after the floor price was cut by a third from 10.2c / kW to 6.7 c / kWh in July.

In a draft decision released by the Essential Services Commission this week, the regulator signaled its intention to reduce the minimum feed-in tariff that energy companies must pay solar households for their exports to 5.2c / kWh, from July 2022.

As noted by the CES, the proposed cut continues the trend of the past two years of declining wholesale electricity prices, which has been largely driven down by the addition of more and more electricity. solar energy distributed at low cost to the grid.

“Wholesale electricity accounts for most of the costs covered by the minimum feed-in tariff,” CER said in this explainer here.

“In recent years, wholesale electricity prices have come down, especially in the middle of the day when most solar products are exported.

“We expect this trend to continue in the years to come. This is due to the increase in rooftop solar installations which decrease the demand for electricity from the national electricity market and increase the supply during solar production hours.

And while reducing the amount solar households are paid for their part in reducing wholesale electricity prices for all seems a bit backwards, price regulator ESC says the real value for solar customers is not having to pay retail for the electricity they use. – at least not all.

“The latest data shows that participants in Victoria’s solar home program are saving an average of $ 1,073 on their annual electricity bills while making a significant contribution to reducing emissions,” Crudden said.

“Matching your usage to the extent possible by turning on appliances or using timers when solar power is available rather than using mains power and paying retail rates is the best way to maximize costs. savings, ”he said.

On that note, Victoria is also giving retailers the option of offering hour-of-use tariffs, intended to encourage solar to export solar at peak times, and to discourage it in the middle of the day when production. solar is abundant.

According to the draft decision, the minimum FiT for the early evening peak (3 p.m. – 9 p.m.) according to the ToU model would be 6.9c / kWh, with 7.1c / kWh offered for solar energy stored by battery exported to the network during the night, between 10 p.m. and 7 a.m. .

Solar households looking for better deals on their solar power may find them – as Crudden notes, the ESC sets the minimum prices expected of retailers, and there are those who choose to pay more.

“We encourage customers to shop around when choosing a retailer with feed-in tariffs and to consider their energy consumption and production,” he said.

But bigger FiTs aren’t always better – depending on your usage patterns and system size, among others – and customers should always read the fine print of the retailer.

Last year, Tango Energy, a retailer owned by Pacific Hydro, offered rooftop solar power customers in Victoria a feed-in tariff of 20 cents / kWh, the highest in the state and almost double. of the mandatory minimum tariff (then) of 10.2 cents / kWh. But as One Step explained here, the offer had a few key points.


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