The Essential Services Commission is reviewing the minimum rates that will apply for financial year 2021–22 and released its draft decision on 17 November 2020. Feedback on the draft decision is invited until 5.00pm on 8 January 2020.

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, the commission sets the minimum feed-in tariffs that energy retailers pay for electricity their customers export to the grid from sources including solar panels and other small renewable generators like wind and hydro. 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 is the commission deciding?

Tariff rates

The commission must decide what the minimum feed-in tariff will be for the 2021–22 financial year. Last year the commission set a minimum feed-in tariff single rate of 10.2 cents per kilowatt hour as well as time-varying feed-in tariff rate ranging 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 which have been affected by reduced energy demand (driven by lower commercial and industrial usage) and the 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 the commission received an increase in enquiries since that review. As a result, the commission will be focusing more on explaining its role and how the minimum feed-in tariff is set, as well as providing strategies for solar customers to maximize the benefit of their solar energy.

Other factors

As well as seeking your feedback on the proposed minimum feed-in tariff rates, the commission is seeking your feedback on:

  • the proposal that a retailer requirement should notify solar customers of changes to their feed-in tariff rate ahead of time
  • the commission's annual feed-in tariff review process.

What is the commission proposing?

Have your say

The consultation period opened on 17 November 2020 with the release of the commission's draft decision. The commission invites you to provide comments or submit questions for clarification by:

  • asking questions or providing comments in our virtual public forum
  • submitting general comments on the draft decision
  • completing our consultation survey
  • uploading submission document(s)
  • attending one of our online public forums on 3 December 2020. Register here.

Submissions close at 5.00pm on 8 January 2021.

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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.