The Victorian Competition and Efficiency Commission (VCEC) review of the state’s solar feed in tariff, currently Australia’s most generous, was submitted to the Victorian Treasurer a short time ago.
According to a statement from the VCEC:
“The Commission is required to provide a final report to the Victorian Treasurer. The Government then chooses when it will release the report. The Order-in-Council which established the Commission specifies that the Treasurer should publicly release the final report, and the Government’s response, within six months.”
“Within six months” means changes to the program could be announced at any time from this point on. At the time of writing, the Victorian Department of Treasury and Finance website gives no specifics as to when the report will be made available to the public or when any changes may be announced.
The VCEC says it “is unable to provide information or advice on current or future FiT arrangements”; however, a draft VCEC recommendation in May suggested only a 6 – 8c per kilowatt hour benefit for new applicants, plus whatever additional rate solar households are able negotiate with their electricity retailer.
A guaranteed 6 – 8c credit or payment for surplus solar electricity generated, if part of the final recommendation and implemented, would be far less than the possible 33c that is available to households acquiring a system now (25c per kilowatt hour + up to 8c electricity retailer contribution).
Eligible households signing up the current Transitional Feed-in Tariff (TFiT) program before any changes come into effect will receive the guaranteed rate until the end of 2016.
Another trigger that could end the TFIT program for new applicants with short or no notice relates to a 75MW cap for the program; a quota that may be very close to being reached.
Victorians considering going solar should note there have been instances in the past where solar incentives in Australia have been subject to “sudden death” announcements; providing little or no warning of changes. Even when notice is given, many choose to leave acquiring a solar power system until the last minute; causing a rush that results in some missing out as solar providers become overwhelmed with enquiries.
With Victorians enduring two major electricity price hikes in the past 12 months, the case for making the switch to solar has grown stronger. By the end of March, approximately 128,013 solar panel systems were installed in the state.
A good quality entry-level 1.52kW solar power system installed in Melbourne can generate electricity bill savings of up to $600 a year under current feed in incentive arrangements. A 3kW solar array can save around $1,140 per year and a 5kW system approximately $1,900.
