Overview

The Essential Services Commission is reviewing the minimum rates that will apply for the 2022–23 financial year. We released our draft decision on 2 December 2021 and invite your feedback on the draft decision until 10 January 2022. This feedback will inform our final decision which will be released in February 2022.

The renewable energy feed-in tariff explained

Do you export power to the grid through a renewable energy source like solar panels or wind power? If you do, your energy retailer may pay you for the power you're exporting.

In Victoria, the amount your retailer pays you is based on a pricing system called a feed-in tariff.

At the Essential Services Commission, we set a minimum feed-in tariff which applies for electricity generated from renewable energy sources, including small solar, wind, hydro and biomass sources.

We currently set minimum rates for two types of feed-in tariff: a single rate that applies at all times of the day; and a time-varying rate that changes at different times of the day and week.

Your retailer can offer you one or both of these types of feed-in tariffs. Your retailer can offer you a rate that's more than the minimum tariff.

So how do we set these tariffs?

First, we set both types of feed-in tariff based on forecasts for wholesale electricity prices. These prices can go up or down depending on a range of factors, including weather patterns or changes to large electricity generators.

We also consider other things, like market fees and charges paid to the national electricity market operator, electricity lost when it is transmitted through the network, and the environmental benefits of renewable energy.

Your energy bills give you information on the feed-in tariff your energy retailer is paying you. Every plan is different, so you should always check to make sure your energy retailer offers you one that best suits your circumstances.

Want to find out more? Head to our website at www.esc.vic.gov.au.

How does this affect you?

Every year, we set the minimum feed-in tariffs that energy retailers pay for electricity their customers export to the grid from renewable sources like solar, wind and hydro generators. Retailers can offer their customers feed-in tariffs higher than the minimum rate we set.

If you have solar panels (or another form of small-scale renewable energy generation) this minimum feed-in tariff review may affect the amount you receive for exporting energy to the grid.


Our draft decision

Retailers can offer solar customers the minimum flat feed-in tariff and/or the time-varying feed-in tariffs for electricity exported to the grid. The table below shows the draft minimum feed-in tariffs to apply from 1 July 2022.

Flat FiT
(c/kWh)

Time-varying FiT
(c/kWh)

All times

Overnight

Weekdays: 10pm-7am
Weekends: 10pm-7am

Day

Weekdays: 7am-3pm, 9pm-10pm
Weekends: 7am-10pm

Early Evening

Weekdays: 3pm-9pm
Weekends: n/a

5.2

7.1

5.0

6.9


When we make our final decision in February 2022, we will update the feed-in tariffs to reflect the most recent data available at that time.

Wholesale electricity prices for 2022-23 are forecast to be lower

The draft minimum flat feed-in tariff of 5.2 cents per kilowatt hour is 22 per cent lower than the current tariff of 6.7 cents per kilowatt hour. The draft minimum time-varying feed-in tariffs are also lower than the current tariffs.

The main driver of the lower minimum feed-in tariffs is lower forecast wholesale electricity prices during daylight hours for 2022-23.

What are we seeking your feedback on?

The methodology we use to set the minimum feed-in tariffs is largely determined by legislation. The costs we must include are set out in the Electricity Industry Act 2000. We have reviewed our approach to setting the feed-in tariffs several times since 2014.

The key opportunity for you to provide feedback on the way we set the feed-in tariff is on the parts of the methodology, specifically:

  • wholesale electricity prices: the cost of buying electricity from generators in the national electricity market. Prices vary across time due to changing supply and demand.
  • avoided transmission and distribution losses: the value of energy saved by not transporting the energy long distances from large scale generators.
  • other fees and charges: the value of market fees and ancillary service charges that retailers avoid when energy is produced by solar customers.
  • avoided social cost of carbon: the value associated with avoiding carbon emissions when energy is produced by solar customers. It is currently set at 2.5 cents per kilowatt hour (c/kWh) by the Victorian government.
  • human health costs: the value associated with the avoiding the health impact of air pollution when energy is produced by solar customers. Currently set at zero cents per kilowatt hour.

How to participate

Submissions on the minimum feed-in tariff rates 2022–23 draft decision closed on 10 January 2022.

Next steps

We will consider feedback provided during this submission period in the development of our final decision which will be released in February 2022.

Privacy Collection notice

As part of making a submission, we need you to provide personal information, such as your name, email address, town of residence and postcode. We may use this information to send you updates about this review. We may also collect personal information when you contact us with a query. Aside from any exceptions in relevant privacy legislation, we will not use or disclose the information you provide for any purpose other than to progress and respond to your query. You have the right to access personal information we hold about you. We may ask you to pay a small fee for this. You can also request that we correct your personal information in our records at no charge by contacting communication@esc.vic.gov.au.

We will publish your submission

Unless you tell us otherwise we will publish your submission the on the Essential Services Commission website. This process may involve publishing your personal information (your name, not your address). We generally do not accept anonymous submissions. If you have concerns about your identity being made public, please consider making your submission confidential rather than submitting it anonymously.

Requesting confidentiality

If you believe your submission contains information that should be confidential or commercially sensitive you must let us know why in writing. If we agree the information is confidential or commercially sensitive you will need to provide us two copies – one complete and one redacted version (preserving page numbers etc by not simply deleting information). If you make your submission public (e.g. by giving it to the media) we will assume confidentiality no longer applies and publish the unredacted version.

Read more information about our submissions policy.

About us

The Essential Services Commission is an independent regulator that promotes the long term interests of Victorian consumers with respect to the price, quality and reliability of essential services. We regulate Victoria’s energy, water and transport sectors, and administer the local government Fair Go Rates system.