Compare the Market is warning that some Victorian households with solar will see their solar feed-in tariffs dramatically decrease from 1 November, with a scheme that saw tariffs of at least 60 cents/kWh to be discontinued across the state.
While these customers will have already been notified by their retailer of the upcoming changes, there are fears some households will experience bill shock as the warm weather approaches and they no longer have a high feed-in tariff payback to offset their electricity usage.
The solar premium feed-in tariff (PFIT) scheme, which was first introduced in 2009, was intended to provide support for Victorians when the costs of installing solar panels were relatively high. It meant that solar customers with a small-scale system of less than 5kW received a minimum of 60 cents/kWh for electricity they sent back to the grid. However, the scheme is ending, meaning participating households will be rolled onto lower feed-in tariffs.
Compare the Market’s Head of Energy, Meredith O’Brien, said these households would benefit most from utilising their solar energy, rather than exporting it.
“Energy retailers will be required to offer these customers one of the minimum feed-in tariff rates set by the Essential Services Commission, but these rates are significantly less than the minimum PFIT tariff,” Ms O’Brien said. “The flat minimum rate is currently 3.3 cents/KWh, which is a 94.5% reduction. If customers stay on this minimum rate, they’ll be credited 56.7 cents less for every kWh exported back to the grid. It’s quite dramatic.
“Time-varying minimum rates may also be available and can be as high as 8.4 cents/KWh, but this is still 86% less than the PFIT rate. Customers may be able to use comparison sites to search for a more competitive solar feed-in tariff than the minimums, but any rate offered will be less than the previous PFIT.
“Now’s the time to start getting into the habit of using your solar electricity during the day when your solar panels are generating electricity. Utilise timers and run power-guzzling appliances such as dishwashers, washing machines and dryers during the day or charge laptops, mobile phones, tablets and other devices when your solar system generates power.
“If you’re not using electricity during the day and you have a battery, you can store solar electricity to utilise during the evening or export it overnight or during peak periods on time-varying tariffs, where the rate may be higher.
“Of course, batteries don’t come cheap and can cost anywhere from a few thousand dollars to almost $20,000 for systems with more storage and inverter chargers.”
Ms O’Brien said the end of the PFIT scheme was a sign of what’s to come, with solar feed-in tariffs expected to decrease further and two-way pricing to be implemented across Victoria from 2026.
“Two-way pricing has been dubbed the ‘sun tax’ by many and will see households charged for exporting solar electricity at certain times. The rollout is different across Australia, but is expected to come into effect from 1 July 2026 in Victoria,” Ms O’Brien said.
“When two-way pricing is introduced, families will likely be charged a fee to export during low-demand times, such as the middle of the day when solar electricity is generated. However, you could earn more for exporting solar power when demand is high, such as afternoons and evenings.
“Households across Victoria are already seeing the price they’re paid to export electricity back to the grid decline, so we’re encouraging people to start changing their solar habits now.
“But it’s important to know that retailers can offer solar feed-in tariffs above those set by the Essential Services Commission. Spending some time comparing options on services like Compare the Market will be vital in looking for a deal that works for your circumstances.”
For more information, please contact:
Phillip Portman | 0437 384 471 | [email protected]
Compare the Market is a comparison service that takes the hard work out of shopping around. We make it Simples for Australians to quickly and easily compare and buy insurance, energy, and home loans products from a range of providers. Our easy-to-use comparison tool helps you look for a range of products that may suit your needs and benefit your back pocket.
