en.Wedoany.com Reported - Australia's Victoria state solar feed-in tariff undergoes significant adjustments between the 2025-2026 and 2026-2027 financial years. The Essential Services Commission (ESC) will cease setting minimum feed-in tariffs from July 1, 2025, transitioning to a market-based model where retailers set their own rates.
Previously, the fixed feed-in tariff for 2024-2025 was 3.3 Australian cents per kilowatt-hour, a 32% decrease from the previous year; the time-of-use tariff was 0.00 cents during the day, with a maximum of 6.57 cents during evening peak hours. The decline is attributed to increased rooftop solar installations, driving daytime wholesale electricity prices close to zero. From July 1, 2025, retailers can freely set rates, but the legal floor remains at A$0.00 per kilowatt-hour.
Entering the 2026-2027 financial year, electricity subsidies are entirely determined by retailers, with the ESC retaining only a supervisory role to ensure fair and transparent terms. Some retailers offer up to 8 Australian cents per kilowatt-hour for the initial portion of daily exported electricity, while others offer lower rates. In its 2026-2027 draft, the ESC proposes a comprehensive reduction in the Victorian Default Offer (VDO): residential customers are expected to save approximately A$46 annually on average (3%); small business customers are expected to save approximately A$172 annually on average (5%). The new tariff structure introduces a three-period time-of-use network tariff, including an "solar absorption" period from 11:00 AM to 4:00 PM, encouraging households to use self-generated solar power during midday.
Key points of this policy change include: the government no longer sets minimum standards; retailers compete on feed-in tariff rates; default offer electricity prices are reduced; a new solar absorption period is added; and using self-generated solar power during the day becomes the most reliable way to save money. For users choosing retailers, it is necessary to compare multiple offers, noting that high subsidy rates may only apply to the first 10 kilowatt-hours of daily exported electricity, while also considering comprehensive costs such as import electricity prices and daily supply charges.
Information sources include the Essential Services Commission's "Victorian Default Offer 2026-27 Draft Decision Paper," official pages of the Department of Energy, Environment and Climate Action (Victoria), and relevant guidelines from Solar Victoria.
