The Essential Services Commission is reviewing the minimum rates that will apply for the 2021–22 financial year. The commission released its draft decision on 17 November 2020. Feedback on the draft decision was invited until 5.00 pm on 8 January 2021. Submissions to this review have now closed.

How does the minimum feed-in tariff affect me?

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.

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.

What are we deciding?

Tariff rates

We must decide what the minimum feed-in tariff will be for the 2021–22 financial year. Last year we set a minimum feed-in tariff single rate of 10.2 cents per kilowatt hour. We also set the time-varying feed-in tariff rate to range from 9.1 cents per kilowatt hour to 12.15 cents per kilowatt hour.

The drop in the proposed minimum tariff is mainly due to falling wholesale electricity prices. These prices have been affected by a reduced demand for energy, driven by lower commercial and industrial usage, and an increase in solar installations across the state. Wholesale electricity prices account for almost two-thirds of the proposed feed-in tariff rate.

The 2020–21 minimum feed-in tariff rate review saw a reduction in rates, and we received an increase in enquiries since that review. As a result, we will be focusing on explaining our role and how the minimum feed-in tariff rate is set. We are also providing strategies for solar customers to maximise the benefits of having solar energy.

Other factors

We are seeking your feedback on:

  • whether a retailer requirement should notify solar customers of changes to their feed-in tariff rate ahead of time
  • our annual feed-in tariff review process.

What are we proposing?

Have your say

The consultation period on minimum feed-in tariffs for 2021–22 opened on 17 November 2020 with the release of our draft decision. We invite you to:

  • ask questions or provide comments in our virtual public forum
  • submit general comments on the draft decision
  • complete our consultation survey
  • upload submission documents.

Submissions closed at 5.00 pm on 8 January 2021.

We hosted two online public forums on Thursday 3 December 2020. You can view recordings of the 3 December forum and a question-and-answer session on YouTube.

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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.