Victorian solar households are set to be given a choice on how they are paid for the excess power they send to the grid – albeit at reduced rates – with the state’s economic regulator proposing to make retailers offer either a time-varying or a set feed-in tariff from July 2020.
The Essential Services Commission said on Wednesday it wanted retailers to offer either a “single rate” feed-in tariff of a minimum 10c/kWh, or a FiT that ranges from 9c/kWh and 12.3c/kWh, depending on the time of day.
Both mark a reduction on the feed-in tariff rates of 2019-2020, which offered a minimum of 12c/kWh for the single rate and between 9.9c/kWh and 14.6c/kWh for the time varying setting.
The ESC said this reduction in the tariffs offered was based on the futures market for wholesale prices, although this time using a 12-month average of future wholesale electricity prices instead of the 40-day average used in 2019-20.
It also noted that “given the high share of rooftop solar in Victoria and our draft decision to mandate a time-varying FiT,” the wholesale electricity price used for setting the time-varying FiT should also be solar-weighted.
“This means that under the technology neutral time-weighting approach, solar owners under a mandated time-varying FiT are likely to be paid more than the true value of their exports to the grid,” the ESC’s draft decision document says.
“If all current solar customers were to switch to a time-varying FiT, this would entail additional FiT payments from retailers to customers with solar panels of about $12 million (upper bound), and ultimately these additional costs could be borne by retail consumers.”
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