The time-varying tariff for certain times of day is outlined in this table:

Period	Weekday	Weekend	Rate: cents per kilowatt hour (c/kWh)
Off peak	10 pm to 7 am	10 pm to 7 am	6.7 c/kWh
Shoulder	7 am to 3 pm, 9 pm to 10 pm	7 am to 10 pm	6.1 c/kWh
Peak	3 pm to 9 pm	n/a	10.9 c/kWh

Since 1 July 2018, retailers have the option to offer customers either a single rate feed-in tariff and/or a time-varying feed-in tariff.

How does the tariff affect me?

Your energy bills give you information on the feed-in tariff your retailer is paying you.   Every plan is different, so you should always check to make sure your energy retailer offers you one that best suits your circumstances.

How to maximise the benefit of solar power

The main financial benefit for customers with solar is the savings from using the electricity they generate in their home or business – rather than paying retail electricity rates. Changing the pattern of electricity usage is key to maximising savings.

Energy efficient products, use of a timer and changing your pattern of usage means using more of your solar generated electricity rather than importing from the grid at higher rates, saving you money.

View the ESC’s fact sheet on how to maximise the benefit of solar power (PDF) in your home, or visit Solar Victoria’s page on getting the most out of your solar system.  

Tariffs and solar panels

If you are thinking about installing solar panels, remember that the minimum feed-in tariffs change each year largely following changes in wholesale electricity prices. Wholesale electricity prices are set in a competitive market by the demand for and supply of electricity. 

Why the minimum tariff changes each year

The feed-in tariff fluctuates each year because the ESC calculates the value of solar energy based on the energy market’s (ASX Energy) wholesale price for energy. For 2021-22, we forecast a lower price. 

Your retailer is free to offer a feed-in tariff above the minimum the Electrical Services Commission sets.

The price of wholesale energy is set in a competitive national market, based on the supply of and demand for energy. The price is not determined by government or a regulator.

Why the minimum tariff is lower than the retail electricity tariff

The minimum feed-in tariff is a payment you receive primarily for generating electricity.

When retailers provide electricity to their customers, they must cover costs including:

• the ‘spot price’ of energy in the national energy market paid to generators 
• transporting electricity (the poles and wires connecting customers to electricity generators)
• complying with environmental programs
• operating a retail business (for example, billing and revenue collection systems, information technology systems, call centre costs, human resources, finance, legal services, regulatory compliance costs, licence costs and marketing).

These additional costs mean the minimum feed-in tariff will always be lower than the retail electricity tariff.

How the ESC calculates the minimum tariff

The ESC calculates the minimum feed-in tariff by forecasting the wholesale price of electricity for the year ahead. The wholesale price varies across different times of the day due to changing supply and demand. As solar panels generally export power between certain hours of the day, the ESC only uses the forecast wholesale price for electricity during these ‘solar hours’.

In their calculation, they also include:

1. Social cost of carbon: the price retailers pay to cover the avoided social cost of carbon (because of your home’s solar panels). This rate is currently set by the Victorian Government at 2.5 cents per kilowatt hour (c/kWh).
2. Avoided transmission fees: the costs that are avoided when your retailer buys your solar power instead of power from a large scale generator (including the cost of power normally lost when it travels long distances through the transmission network from a large central generator).
3. Avoided market fees: the cost of the fees and charges your retailer would normally pay to the Australian Energy Market Operator when they buy wholesale energy.

For more information about the ESC’s methodology and review process for the minimum feed-in tariff 2021-22, see their final decision paper.

Legislation controls how the ESC regulates the tariff

The ESC’s role in regulating the minimum feed-in tariff is determined mainly by the Electricity Industry Act 2000, Section 40FBB.