We set the minimum feed-in tariffs that your energy company pays you for power you export to the grid.
Minimum feed-in tariff
Your energy company pays you feed-in tariffs for power you export to the grid (via sources including solar panels). Energy retail companies are responsible to price their feed-in tariff offers just like they set the retail offer prices for the power you consume from the grid.
We set the minimum that they must pay for the feed-in tariffs. This means retailers have to offer you at least the minimum tariffs, but they are free to offer you above this minimum.
Retailers can offer solar customers a choice between a single rate or time-varying tariffs.
Feed-in tariffs from 1 July 2022 to 30 June 2023
The 2022-23 'flat rate' minimum feed-in tariff is 5.2 cents per kilowatt hour
The flat rate feed-in tariff applies regardless of the time of day or day of the week.
The 2022-23 'time-varying' minimum feed-in tariffs are between 5.0 cents and 7.1 cents per kilowatt hour
Under the time-varying feed-in tariffs, customers are credited between 5.0 cents and 7.1 cents per kilowatt hour of electricity exported, depending on the time of day.
The time-varying tariff for certain times of day is outlined in this table:
|Period||Weekday||Weekend||Rate: cents per kilowatt hour (c/kWh)|
|Overnight||10 pm to 7 am||10 pm to 7 am||7.1 c/kWh|
|Day||7 am to 3 pm, 9 pm to 10 pm||7 am to 10 pm||5.0 c/kWh|
|Early Evening||3 pm to 9 pm||n/a||6.9 c/kWh|
We have reviewed the minimum feed-in tariffs to apply from 1 July 2022
We released our final decision on 24 February 2022 on the minimum feed-in tariffs to apply from 1 July 2022.
View our information session on the minimum feed-in tariff
We held an information session on 28 October 2021 to explain our role, how we must set the minimum feed-in tariff, how people can contribute to our review and to answer questions from attendees.
Why the minimum feed-in tariff changes each year
The minimum feed-in tariff changes each year mostly because of changes in wholesale electricity prices. Wholesale electricity makes up around half of the costs covered by the minimum feed-in tariff.
We estimate the wholesale electricity prices using the latest information available at the time of publication of each decision. In recent years, wholesale electricity prices during the middle of the day when most solar is exported have been going down.
The wholesale price is set in a competitive national market, based on the supply of and demand for energy. The wholesale price is not set by government or a regulator.
The chart below shows how the estimated wholesale electricity price and the flat minimum feed-in tariff have changed since 2015.
|Wholesale electricity prices||Minimum feed-in tariffs|
Why the minimum feed-in tariff is different to the retail electricity tariff
The minimum feed-in tariff is a payment you receive for generating electricity.
When retailers provide electricity to their customers, they must cover costs including:
- transporting electricity (the poles and wires connecting customers to electricity generators)
- operating a retail business (for example, billing and revenue collection systems, information technology systems, call centre costs, human resources, finance, legal services, regulatory compliance costs, licence costs and marketing)
- the ‘spot price’ of energy in the national energy market paid to generators.
- complying with environmental programs.
These additional costs mean the minimum feed-in tariff will always be lower than the retail electricity tariff.
How we calculate the minimum feed-in tariff
Legislation controls how we regulate the minimum feed-in tariff. The costs we must include are set out in the Electricity Industry Act 2000. By no later than 28 February each year, we must set the minimum feed-in tariffs to apply for the next financial year.
We calculate the minimum feed-in tariff by forecasting the wholesale price of electricity for the year ahead. This has the following affect on the minimum feed-in tariffs:
- The forecast includes wholesale electricity market information available up to the time of the decision. This means that for each decision effective from 1 July, the forecast wholesale prices is based on market information up to February of that year.
- Any changes in wholesale electricity market after the publication of the final decision in one year are included in the next decision. This means any changes in the wholesale electricity market after the final decision will be incorporated in the wholesale electricity price forecasts for the feed-in tariffs for 1 July of the next financial year.
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’.
In our calculation, we also include:
- avoided transmission and distribution losses: the value of energy saved by not transporting the energy long distances from large scale generators.
- other fees and charges: the value of market fees and ancillary service charges that retailers avoid when energy is produced by solar customers.
- avoided social cost of carbon: the value associated with avoiding carbon emissions when energy is produced by solar customers. It is currently set at 2.5 cents per kilowatt hour (c/kWh) by the Victorian government.
For more information about our methodology and review process for the minimum feed-in tariff 2022-23, see our final decision paper.