Victorian households are set to see their solar feed-in tariffs more than double, following a ruling announced today by the Essential Services Commission.
The move will see minimum feed-in-tariffs go from 5 cents a kilowatt hour to 11.3c/kWh from 1 July, and follows directions by the Andrews government to include “the avoided social cost of carbon and the avoided human health costs attributable to a reduction in air pollution” in the calculation of the tariff.
This has led the ESC to include an effective carbon price of $19.63 a tonne of CO2e (2.5c/kWh), however it said it did not have the necessary data to put a price on avoided health costs.
According to the government, the change will benefit around 130,000 households.
“With this new feed-in tariff, the Andrews Labor government is ensuring that households with solar panels are more fairly compensated for the power they send back into the grid,” energy, environment and climate change minister Lily D’Ambrosio said.
“This is a great win for the 130,000 solar households all over Victoria we promised a fairer system, and that’s exactly what we have delivered.”
A large proportion of the increase, however, is due to an expected rise in wholesale electricity prices, partly due to the closure of Hazelwood, with the “forecast solar-weighted average wholesale electricity pool price” going from 4.6c/kWh in 2016 to 8.1c/kWh in 2017.
The news adds to the growing friction between Labor and Coalition governments regarding renewables. Amongst continuing federal attacks on renewable energy, the state opposition recently announced plans to wind back the state’s ambitious renewable energy target if elected.
Ms D’Ambrosio said the Victorian coalition had voted against the bill to include social and environmental costs in the solar tariff calculation.
The announcement of the feed-in tariff puts Victoria at the top of the pack, in terms of minimum feed-in-tariffs, with only regional areas in some states offering more per kilowatt-hour.
Table: Other states FiT schemes
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