The Essential Services Commission (ESC) of Victoria in Australia has announced an increase in the FiT rates for small renewable energy sources. The revised rate now stands at AU$11.3 cents per kWh ($0.09). The new rate will come into effect on July 1, 2017.
This is good news for households and businesses with solar panels that stand to benefit the most from this announcement. It is an increase of AU$6.3 cents from the existing FiT of AU$5.0 cents per kWh. "Of that increase, AU$3.8 cents is a result of wholesale market price increases and AU$2.5 cents is attributable to the avoided social cost of carbon," stated ESC.
The new rate has been set after the Electricity Industry Act 2000 went through some changes. The amendments require the FiT to be calculated based on wholesale electricity market prices, distribution and transmission losses avoided by the supply of small renewable energy generation, and avoided social costs of carbon and also human health costs owing to reduction in air pollution.
Calling it a 'fairer price', Shani Tager of Solar Citizens commented, "We hope to see other regulatory bodies in Australia correcting the market failure that is seeing, in some states, solar producers being paid next to nothing for the power they produce. We are determined to see them follow the lead of Victoria and get a fair price for their solar – right across the country."
According to community based solar advocacy group, Solar Citizens, nearly all states and territories in the country have a FiT of around AU$5.00 cents to AU$6.00 cents per kWh for rooftop solar. This it says is 'less than a quarter of the cost of electricity the retailer charges for electricity accessed from the grid'.
As per these changes in the Act, ESC was at liberty to set multi-rate tariffs, instead it has set a flat rate. The new rate will be applicable for the first
year after the new legislation. It gives enough time to the commission to consult energy retailers on the implementation of multi-rate FiTs in future years.
The ESC will be making the final minimum rate determination for every year on February 28.