Victoria Solar Feed In Tariff Update

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Victoria’s solar feed in tariff incentive – currently under review – could potentially meet the same sort of fate as Queensland’s program soon.
   
In January this year, the Victorian government tasked the Victorian Competition and Efficiency Commission (VCEC) with an inquiry into solar feed-in tariff arrangements in the state. 
     
The VCEC was to provide a final report to the Government by this Friday. However, late last month the Treasurer granted a two week extension and the Commission is now due to submit its final report to Government by 27 July 2012.
  
It’s believed the extension was provided to allow the VCEC time to consider additional information, some of which was provided by the solar industry. 
   
In May, a draft report from the Commission recommended solar households be guaranteed a payment of between just 6-8 cents per kilowatt hour for surplus solar electricity exported to the mains grid, plus whatever amount system owners can negotiate with their electricity retailer.
   
Currently, new solar households are signing up for the Transitional Feed In Tariff (TFiT) program. 
  
Participants receive 25 cents per kilowatt hour for surplus electricity generated by their rooftop solar power systems. With some electricity retailers offering an additional payment; it brings the total financial incentive paid up to as high as 33c per kilowatt hour. 
 
The TFiT is available to Victorian households with system capacity of five kilowatts or less. At the 33 cent rate, a 4.165kW solar panel system installed in Melbourne can generate electricity bill savings of up to $1,643 a year according to Energy Matters.
  
However, how much longer entry into the program will be available given the looming VCEC report is unclear. Unlike the recent situation in Queensland, it could potentially be a “sudden death” announcement, all too common with solar rebate and incentive changes in Australia.
 
Victorian households have been slammed with multiple electricity price increases in the last 12 months, strengthening the case for going solar. Electricity costs in Victoria increased 10% on average on January 1 and electricity prices jumped a further reported 8.2 – 14.8%  across Victoria’s five distribution areas at the beginning of this month.