FiT and Retail             Click to enlarge

The Victorian government has just made a move unprecedented in recent Australian solar history – they have moved to mandate a higher minimum solar feed in rate than what was previously on offer. From 1 July 2017, the new mandatory minimum rate for solar feed into the grid will be 11.3c per kilowatt-hour (kWh) however this not a fixed  rate and will be subject to review every year. Victoria will lose 20% of its power generation with the closure of the Hazelwood power station which has prompted a steep surge in electricity prices. Solar PV owners in Victoria had been receiving a paltry Feed in Tariff (FiT) rate of around 5-6 cents/kWh for their surplus electricity going back into the grid. This was then on-sold to neighbours, sometimes travelling only a few metres down the poles and wires, for 29c on average

Unlike “Shirley”, of Box Hill, who was among the first to install solar power several years ago, received the same rebate as what is available today but in addition had a fixed FiT rate of 66 cents kwh. Her Premium Feed in Tariff (PFiT) will continue at this rate until 2024, provided she does not add extra solar panels to the system.

The Federal rebate, currently about a third of the total cost of installation, will be gradually phased out over the next 15 years, by which time new technology in battery development will make power storage more affordable, (currently too expensive at upwards of $10,000-00), and result in a large proportion of consumers going off-grid. Houses with solar panels installed could generate all the electricity they use, storing power generated during the day in batteries for use at night, or “on-grid” and still connected to the same network that non-solar households rely upon.

Off Grid ….. by Foyster
Click to enlarge

But what happens when the power utilities, which, after all, are in the business of selling electricity, continue to lose business? The more kilowatt-hours generated by rooftop solar panels, the fewer kilowatt-hours sold by utilities the more expensive it will be for consumers who can’t install solar panels such as those who live in apartment towers. With fewer kilowatt-hours sold, utilities will have a harder time justifying investments in new power stations, transformers and other types of capital investments that utilities earn money from.

The rules that determine electricity prices are based on an old, centralised model of electricity flowing one way from large coal-fired generators to passive consumers. But with more than 1.6 million homes and businesses now equipped with solar generators on their rooftops and battery storage about to take off, the future of “distributed energy” is now.

The price of rooftop solar is determined by state-based regulators who have had a very narrow view of what solar electricity is worth, based mainly on the average wholesale value of electricity.

Then there are the costs for the transmission infrastructure, (the large, ‘coat hanger’ high voltage lines) and distribution (the poles and wires along your street). Rooftop solar doesn’t actually travel along transmission lines at all. And it uses far less of the distribution infrastructure. So electricity from rooftop solar shouldn’t be charged transmission costs and should pay less for use of the distribution network. What’s more, around 8% of the electricity that travels from large coal and gas fired plants to homes get lost along the way, whereas “distributed” rooftop solar experiences a tiny fraction of these losses.



  1. Zebront says:

    I would want to have a fixed feed in rate before I would go solar. The new rate of 11.3 per Kwh does makes it more attractive but it could drop again because they don’t want to make solar panels too attractive otherwise there would be too few paying too much to keep the system going.

  2. Le Storm says:

    The solar power generated by the solar panels on a sunny day should be enough to directly power your home appliances without drawing power from the grid and whatever you don’t use, can be sold back to the supplier at the going rate. The catch is you have to be home to use and if you live in Melbourne you will only have 46 days of full sun and 139 days partly cloudy. You can’t store it unless you fork out another $10,000.00 for a battery. We are going to wait a few years when the equipment should be cheaper and more efficient.

  3. Sharkey T. says:

    The Finn Peacock website link below is a great guide for those considering installing solar panels.
    We had thought about it but unfortunately we have just been informed that the area where we live will a future apartment growth zone with heights of up 13.5 metres.

  4. Ruby says:

    Solar power is not an option for us as a couple. Providing we pay our electricity bill on time we are charged an average $230 per quarter to AGL including a supply charge of $100 per quarter which remains applicable while we are connected to the grid irrespective of the power we use or what electricity we could generate by installing solar panels. The cost of a 3.24KW system, less the rebate, would cost us approximately $5000-00.

  5. Russ says:

    We will now have difficulty in meeting our own electricity demand let alone importing power to South Australia during their periods of power disruptions and high demand. If Hazelwood power station was so dirty and such an economic absurdity why was there not an alternative being built in advance to replace its power output? It’s closure could mean instead of being an exporter of electricity we will be more like an importer.

  6. Everyman says:

    “We are the biggest coal exporter in the world. If anybody, any country has a vested interest in demonstrating that clean coal and cleaner coal with new technologies can make a big contribution to our energy mix and at the same time reduce our emissions in net terms — it’s us,” Mr Turnbull said.
    If Turnbull had said the above in 2009 he would have beaten Abbot for leadership of the coalition and would be PM today and saved us millions by retaining the cheap electricity we have today.
    You can say what you like but the fact is our growth and standard of living we currently enjoy could not have been achieved without coal and oil.

Leave a Response

Currently you have JavaScript disabled. In order to post comments, please make sure JavaScript and Cookies are enabled, and reload the page. Click here for instructions on how to enable JavaScript in your browser.