Renew supports changes to Vic feed-in tariff

Renew has expressed general support for new solar feed-in tariffs expected to start in Victoria on July 1, 2018.

The Essential Services Commission has published its draft decision on the minimum feed-in tariffs. The most important aspects are:

• The minimum tariff is to be reduced from 11.3 cents to 9.9 cents a kilowatt hour. This is because major increases in the size and number of solar systems and the imminent opening of several solar farms in the next 12-18 months will appreciably lower wholesale electricity prices during the solar generation period
• The introduction of a time-variant tariff, with peak, shoulder and off-peak rates for different times of day. Energy retailers will be required to offer at least one of the two new tariffs in 2018-19. Time variant rates are 29 cents/kilowatt hour for peak (3pm-9pm), 7.2 cents off-peak (10pm-7am) and 10.3 cents shoulder (all other times). From 2019-20 only a time-variant tariff will be offered.

The ATA broadly supports the new feed-in tariffs. However, we have some concerns in the following areas:

• Consumers and the renewable energy industry will need guidance on how to best account for time-variant tariffs when calculating bill savings or payback periods when installing a new solar system.
• The methodology for determining solar-weighted energy value (used to calculate the single-rate tariff) needs to be verified against changes in average system size since the data it was based on was collected
• The Commission needs to explain more clearly why it uses a different methodology for calculating the energy value for each tariff
• The Commission needs to explain how the new tariffs will apply to customers still on the premium feed-in tariff.

Renew also commented on some aspects of the tariff regime that are relevant but may fall outside the scope of this decision:

• Urging the commission to introduce a critical peak component to the tariff as soon as possible
• Advocating for including the value of avoided human health costs when remunerating owners of distributed renewable energy systems for the value they create
• The ATA recommends that the Commission and the Victorian government take these points into consideration when finalising and communicating the new tariffs

Click here to read the ATA’s submission to the Victorian Essential Services Commission on solar feed-in tariffs.