Victorian solar households are set to be given a choice on how they are paid for the excess power they send to the grid – albeit at reduced rates – with the state’s economic regulator proposing to make retailers offer either a time-varying or a set feed-in tariff from July 2020.
The Essential Services Commission said on Wednesday it wanted retailers to offer either a “single rate” feed-in tariff of a minimum 10c/kWh, or a FiT that ranges from 9c/kWh and 12.3c/kWh, depending on the time of day.
Both mark a reduction on the feed-in tariff rates of 2019-2020, which offered a minimum of 12c/kWh for the single rate and between 9.9c/kWh and 14.6c/kWh for the time varying setting.
The ESC said this reduction in the tariffs offered was based on the futures market for wholesale prices, although this time using a 12-month average of future wholesale electricity prices instead of the 40-day average used in 2019-20.
It also noted that “given the high share of rooftop solar in Victoria and our draft decision to mandate a time-varying FiT,” the wholesale electricity price used for setting the time-varying FiT should also be solar-weighted.
“This means that under the technology neutral time-weighting approach, solar owners under a mandated time-varying FiT are likely to be paid more than the true value of their exports to the grid,” the ESC’s draft decision document says.
“If all current solar customers were to switch to a time-varying FiT, this would entail additional FiT payments from retailers to customers with solar panels of about $12 million (upper bound), and ultimately these additional costs could be borne by retail consumers.”
As One Step Off The Grid reported in May of this year, Victoria last year became the first state to offer “time-variable” tariffs, in an attempt to properly reflect the value of rooftop solar exports at different times of the day and also to encourage solar households to install battery storage.
But as was the case back in May, the idea hasn’t gained much traction with retailers; as the ESC noted this week, Energy Australia is currently the only one to offer a time-varying FiT.
To remedy this, the regulator wants to take the choice away from the retailers, and put it in the customers’ hands instead.
And the 2c/kWh cut in the single rate FiT might tip them in favour of the variable option, with customers possibly more likely to choose the option that offers around the same amount as the minimum fixed rate were previously getting, if only during peak periods.
“This draft proposes a step forward in creating choice for Victorian customers by requiring retailers to offer time-varying feed-in tariffs and we want to hear from both households and retailers on what this means for them,” said ESC chair Kate Symons in a statement on Wednesday.
“With a 46 per cent increase in solar installations and a rapid uptake of batteries, we need a scheme that supports customer choice.”
For those customers who choose the variable rate, as you can see in the table above, the peak amount of 12.3c/kWh would be offered between 3pm and 9pm on weekdays, while a “shoulder” rate of 9.7c/kWh would be offered on weekdays between 7-3pm and the rather unlikely window of 9-10pm; as well as 7-10am on weekends.
The minimum rate of 9c/kWh would be offered during the off-peak, from 10pm-7am on weekdays, and weekends, which – as with the 2019-2020 offer – doesn’t provide much incentive for solar homes to get battery storage.
Both the draft minimum feed-in tariff as well as proposed changes to the state’s electricity distribution code are open for consultation on Engage Victoria until January 17, 2020. The final decision will be made by February 28, 2020.
Sophie is editor of One Step Off The Grid and deputy editor of its sister site, Renew Economy. Sophie has been writing about clean energy for more than a decade.
This post was published on December 4, 2019 10:58 am
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View Comments
Why do we customers need to choose... set the rules so that domestic PV owners get the best deal from excess energy that is exported to the grid...
The complexities of 'choice' will make it hard for many people to even bother .. and this gives room for power companies to twist their offerings so that it becomes difficult for ordinary people to understand...
It'd be really nice if they gave people who make financial decisions some certainty.
This is really pulling the rug out from under people's feet.
Similar to the AEMC rules that have reduced the value of renewable investment so much.
Another scam to water down the value of PV. This move will slow interest in PV and well before batteries (which need to fall to $20-$100kWh range) give an additional stimulus
This is wrong on so many levels / I can’t wait to see all the polarising comments back to them during the consultation period.
fit 12c between 3-9 pm oxymoron
What happened to the 66cents per kilowatt which was good for the people.
66c a Kwh for the long term could only be good for the people who could afford panels. for the rest it would mean no electricity
Whose camp is the regulator helping?
Not the consumer.
Whichever way you look at this, they are proposing a 2cent reduction in FIT.
And, it seems that the regulator thinks the sun takes the weekend off. No maximum tariffs for Sat and Sun.
I must be going mad!! Thought the sun worked a continuous 7 day roster.
Anyway, the payback period on batteries and going stand-alone is looking more promising.
Then, if severe you all do that, the grid would get no solar rooftop PV.
Is that what they want?
So bloody short sighted.
How do domestic batteries fit into this? Can I store excess daytime solar power and feed it back in for the evening peak? If not, why not? It would go to offsetting high peak prices and reduce the amount of ramping of power stations.
"I must be going mad!! Thought the sun worked a continuous 7 day roster.
Anyway, the payback period on batteries and going stand-alone is looking more promising."
Not sure how it works in Vic but in Tasmania that's also how the charge for electricity. Cheap overnight and during the day but expensive morning and evening. Cheap rates all the weekend. It's caused by supply/demand ratios.
Surely everyone seen this coming, Perhaps allowing home owners to export more then 5kw to the grid in most cases arpund the state the Distributors should be forced to offer a larger export, Victorians generally have a roof space for 10-15kw systems, with electric vehicles coming intk the market we cant rely on the heavy lifting to be done by commercial size systems or farms the honest home owner will pic up the slack like always.