Rooftops with solar panels in Victoria

Victoria’s minimum solar feed-in tariff to drop from July 1

Victoria’s minimum solar feed-in tariff (FiT) will drop from 1 July 2022 – and wholesale electricity prices are to blame, according to the state regulator.

The Essential Services Commission (ESC) announced that the minimum single rate feed-in tariff will decrease from 6.7 cents per kilowatt-hour (c/kWh) to 5.2c/kWh. Customers on time-varying FiTs will also experience a drop.

A feed-in tariff is the rate a customer with solar panels receives for exporting power back into the grid, which is then applied as a credit to bills.

The rise in rooftop solar generation has placed downward pressure on electricity prices in Victoria, but this has also impacted feed-in tariffs, the ESC’s pricing director Marcus Crudden said.

“Unused power generated from rooftop solar goes into the wholesale energy market,” he said.

Mr Crudden noted that the long-term value of solar is from customers using energy that’s generated from their panels during the day, rather than relying on grid electricity. Mr Crudden also referred to a new report that found homes with solar saved on average $485 a year by avoiding buying power from the grid.

“The key is to tailor your consumption to be using your solar power at peak times, rather than the mains power,” he said.

“This way you use power straight from your solar panels to run power-hungry appliances during the middle of the day. Any leftover energy is then exported to the grid, and you get paid via the feed-in tariff.”

A reduction to the state’s minimum feed-in tariff was first proposed by the ESC in December 2021, and this decision means that the minimum FiT rates have now been determined for 2022-23.

How much are feed-in tariffs going to drop by?

Rate Time applicable Cents per kWh
Single All times 5.2c
Day Weekdays: 7am-3pm & 9-10pm
Weekends: 7am-10pm
Early evening Weekdays: 3pm-9am
Weekends: N/A
Overnight 10pm-7am all days 7.1c

Source: Essential Services Commission, Solar Value Remains Despite Drop in Feed-In Tariff Rates, February 2022.

As rooftop solar continues to climb in Victoria, it creates a surplus of solar-generated power that’s delivered to the grid, usually at a time when demand for electricity is low. This in turn drives wholesale prices down, with regulators and retailers alike adjusting FiT rates to reflect market conditions.

Is it time to compare solar deals?

The solar energy plans below generally have higher feed-in tariffs than standard products in market, however a higher FiT doesn’t necessarily mean cheaper bills. Always check the usage and supply rates along with the FiT to weigh up if these deals are suitable for your household.

Here are some of the cheapest solar-specific deals from the retailers on our database. These costs are based on the Citipower network in Melbourne but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Annual price estimates assume general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Price estimates exclude solar feed-in tariff credits. This table may include products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.

Image credit: ChameleonsEye/

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