Minimum feed-in tariff

We set the minimum feed-in tariffs that your energy company pays you for power you export to the grid (via sources including solar panels).

Overview

We set the minimum feed-in tariffs that your energy company pays you for power you export to the grid (via sources including solar panels). From 1 July 2018, retailers will be able to offer solar system owners a choice between a single rate or 'time-varying' tariff.

Key facts

Retailers have to offer you at least the minimum tariff

However, they can offer you anything above the minimum tariff we have set. This year's tariff is slightly lower because of changes to the forecast wholesale price of electricity.

The 2018-19 'single rate' minimum feed-in tariff is 9.9 cents per kilowatt hour

The single rate feed-in tariff applies regardless of the time of day or day of the week. This tariff will apply from 1 July 2018.

The 2018-19 'time varying' minimum feed-in tariff is between 7.1 cents and 29 cents per kilowatt hour

Under the time varying tariff, customers will be credited between 7.1 cents and 29.0 cents per kilowatt hour of electricity exported, depending on the time of day. This tariff will apply from 1 July 2018.

Time varying tariffs apply from 1 July 2018

Our Minimum Electricity Feed-in Tariffs to Apply From 1 July 2018: Final Decision marks the first time that retailers are able pay solar system owners either a 'single-rate' or 'time-varying' tariff, which reflects the wholesale cost of electricity at the time of day you are selling it to the grid.

The time-varying tariff for certain times of day is outlined in this table:

Period	Weekday	Weekend	Rate: cents per kilowatt hour (c/kWh)
Off peak	10pm to 7am	10pm to 7am	7.1 c/kWh
Shoulder	7am to 3pm, 9pm to 10pm	7am to 10pm	10.3 c/kWh
Peak	3pm to 9pm	n/a	29.0 c/kWh

We introduced time-varying tariffs in 2018

We recently completed an inquiry into the value of distributed generation. This included the value of electricity generated from alternative sources, like solar power.

The inquiry recommended that solar system owners are paid a price that better reflects the wholesale cost of electricity at the time they sell it into the grid. As a result of the findings, retailers will be able to offer customers either single-rate or a time-varying feed-in tariff from 1 July 2018.

Solar system owners will also have the opportunity to shop around to choose a tariff-type that best suits their individual circumstances.

How we calculate the minimum feed-in tariff

We calculate the minimum feed-in tariff by forecasting the wholesale price of electricity for the year ahead. The wholesale price varies across different times of the day due to changing supply and demand. As solar panels generally export power between certain hours of the day, we only use the forecast wholesale price for electricity during these ‘solar hours’.

We also consider the costs that are avoided when your retailer buys your solar power instead of power from a large scale generator. This includes the cost of power that is normally lost when it travels long distances through the transmission network from a large central generator and the cost of the fees and charges your retailer would normally pay to the Australian Energy Market Operator when they buy wholesale energy.

The minimum feed in tariff also includes a price that is paid to account for the avoided social cost of carbon attributable to a reduction in air pollution due to the energy exported by your solar panels. This rate is currently set by the Victorian Government at 2.5 cents per kilowatt hour (c/kWh).