Another Haircut For Victoria’s Solar Feed-In Tariff

Victoria's feed in tariff

Maximising solar energy self-consumption will become even more attractive in Victoria, with a lower minimum solar feed-in tariff kicking in from July 1.

Last Thursday, the state’s Essential Services Commission published its final decision on the minimum feed-in tariff rates electricity retailers must pay from 1 July 2022. The minimum single rate feed-in tariff for Victoria in 2022–23 will be 5.2 cents per kilowatt- hour, down from 6.7 cents in 2021/22. There are also reductions in minimum time varying rates.

Daytime wholesale power prices in Victoria have been at their lowest level for many years thanks to renewables – including rooftop solar systems – and decreasing wholesale electricity costs are largely responsible for the reduction says the ESC.

Solar Energy Self-Consumption And Comparing Retailers

It’s been the case for quite a while now that the real value from solar panels lies in maximising self-consumption, as the price paid for mains grid electricity use is much higher than what is received for exporting surplus solar energy.

“The key is to tailor your consumption to be using your solar power at peak times, rather than the mains power,” said ESC pricing director Marcus Crudden.

Mr. Crudden also stressed the new rates are *minimum*. Electricity retailers can, and often do, offer more. The current minimum rate is  6.7 cents, but some retailers are currently offering up to 11.7c.

“We encourage customers to shop around when deciding on a retailer offering feed-in tariff rates and to consider their energy consumption and generation,” he said.

A higher feed-in tariff is only one part of the equation in what makes a good solar plan. SolarQuotes can help take some of the confusion and time out of finding a good electricity plan with our electricity retailer plan comparison tool.

Solar Remains A Really Good Deal In Victoria

If you’re a Victorian considering installing solar and news of the upcoming feed-in tariff reduction has been a bit of a downer, bear in mind the bill-busting technology will remain a solid investment. Victorians also have an additional major incentive not available elsewhere in Australia.

As well as the “solar rebate” (actually an up-front subsidy) accessible nationally, there’s also the Victorian solar panel rebate currently providing an additional subsidy of up to $1,400.

Using SQ’s solar calculator with a 5c feed-in tariff rate (so slightly lower than the new minimum) and the VIC rebate factored in indicates a solar system installation in Melbourne can achieve simple payback in just 6 years. Boost self-consumption and that time can be significantly shortened.

As for choosing an installer, there are plenty of good solar installers in Melbourne and across the state to select from.

Time To Buy A Home Battery?

For some existing solar owners, their thoughts may be turning to a home battery purchase to squeeze more value from their systems. Victoria also has a battery rebate available – and it’s also quite generous; up to $3,500. But one catch is you must not have already received a rebate as an owner-occupier under the Solar Homes Program; and many Victorians have.

Solar battery prices still have some way to drop before they’ll be within the reach of many households without – or even with – access to a rebate. So, again, boosting self-consumption and choosing a good solar plan is the best way to maximise value.

By the way, you can use the calculator linked above for working out if a battery makes financial sense in your situation.

What About VPPs?

A Virtual Power Plant (VPP) is an arrangement where batteries installed at various premises are virtually aggregated to create a resource controlled by a central operator. The operator can charge the batteries in time of low electricity demand and high surplus solar energy, and discharge them to the grid when demand is high.

A bunch of Virtual Power Plant programs have sprung up in Victoria offering deals including cheaper batteries. Solar Victoria recently also began offering a ~$600 boost to the Victorian battery rebate for those eligible to encourage greater VPP uptake. This only applies to VPP programs Solar Victoria has approved under its pilot program.

While a cheaper battery might be very attractive, it’s wise to first learn more about Virtual Power Plants and the pros and cons of joining a VPP before signing on the dotted line. And on the topic of residential energy storage generally, check out SolarQuotes founder Finn’s 101 guides to understanding, buying and owning a solar battery.

Related: Australian solar subsidies, rebates and incentives.

About Michael Bloch

Michael caught the solar power bug after purchasing components to cobble together a small off-grid PV system in 2008. He's been reporting on Australian and international solar energy news ever since.


  1. George Kaplan says

    Didn’t your colleague say FiTs were supposed to be going up as of about mid-year? :- D

    • Ronald Brakels says

      Sure did. But between the surge in COVID and a really cool summer, Queensland is the only NEM state with a large increase in wholesale electricity prices despite the stronger world economy. It turns out prediction is hard. Especially about the future.

  2. Des Scahill says

    George Kaplan

    There has been a massive increase in UK power prices, which will take effect from April this year. Some consumers will now pay well over an extra 20 pounds per week. Those on variable tariffs will be the worst affected,

    Some UK electricity firms have stopped providing ‘fixed’ tariffs altogether.


    These UK increases do NOT reflect any future rises that might occur as a by-product of the Ukraine crisis.

    At an exchange rate of 1Pound = 1.85 $AUD, the current proposed increases are equivalent to just over $37 a week, or $483 per quarter here in OZ

    None of us really know what overall effect the combination of – climate change, supply chain disruption, general economic chaos in Europe, extreme weather events etc will ultimately have on energy prices here in OZ.

    So I wouldn’t be too quick to abandon all hope of an FIT increase just yet.

    Mind you, grid independence, in even a modest form is looking more and more attractive every day. Some new ‘economic realities’ are clearly on their way towards us, even if we don’t know their full nature and causes just yet.

    The one thing we do know with a high degree of probability is that any ‘new economic realities are far more likely to be ‘bad’ rather than ‘good’.

  3. Paul Sorrentino says

    I have a 5 kW system in Victoria with a 13 kWh battery. It’s doing a great job of self-consumption, I have only purchased 1.5 kWh of electricity so far this month. The feed in tariff helps pay for the daily connection charge.

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