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What is the solar premium feed-in tariff and when is it ending?
The solar premium feed-in tariff (PFIT) started in 2009 to provide extra support for Victorians installing rooftop solar power at a time when solar panels were relatively expensive. It closed to new applicants at the end of 2011.
The scheme offered eligible solar customers with small-scale systems of 5kW or less a credit of at least 60 cents/kWh for electricity fed back into the grid.
The PFIT scheme will end on 1 November 2024, and retailers are no longer obliged to pass on PFIT credits. From 2 November 2024, solar customers will receive at least one of the minimum feed-in tariff rates set annually by the Essential Services Commission.
If you are a PFIT customer, your retailer will contact you to discuss your feed-in tariff options before the scheme ends.
You will continue to receive the premium rate until 1 November 2024, however there are some scenarios where changes to your system or your circumstances may mean your premium rate will end before the scheme does.
Switching electricity companies
You can switch electricity companies or contracts and continue to receive the PFIT rate until 1 November 2024. Before switching, check if there are any exit fees under your existing contract.
Adding extra solar panels
You will no longer receive the premium rate if you add additional solar panels, even if the overall system size remains 5kW or under.
Now is a good time to explore new opportunities to bring down your energy costs after the PFIT scheme ends
Solar technology has improved rapidly since 2009. You could consider upgrading to a new, more efficient system to bring down your energy costs after the scheme ends. Solar Victoria has expanded its eligibility criteria for solar panel (PV) rebates to households with systems over ten years old. If this eligibility change applies to you, a solar panel rebate can bring down the cost of replacing your solar panels or expanding the number of solar panels you currently have. You may also be eligible for a hot water rebate and a solar battery loan. More information on what you can do to save on bills when your PFIT ends can be found at Feed-in tariff ending? You still have ways to save | solar.vic.gov.au.
Replacing damaged panels
Until the scheme ends, you can replace existing panels for maintenance reasons, for example, due to storm or fire damage, without losing the PFIT. You just need to make sure the replacement panels do not exceed the original generating capacity of your system. Net metering must continue.
'Net-metered' means that the electricity generated by the solar PV system at the property is offset by the electricity consumed at the property.
Renovation or demolition of your house
Until the scheme ends, you can remove your solar panels due to renovations or the demolition of a house without losing the PFIT, as long as the capacity of your solar panels post-renovation or demolition does not exceed the original generating capacity of your system. Net metering must continue.
You may be required to re-lodge the Certificate of Electrical Safety with the distribution business after the panels have been reinstalled, as well as other paperwork, including the solar connection form and the Electrical Works Request. Please check with your distribution business before you get started.
Moving house
The PFIT is linked to the property where the solar panels are installed, so if you move house you cannot take the PFIT with you. Any house which is signed up to the PFIT scheme will remain eligible to receive premium credits until the scheme ends, even if the house is sold and new residents move in.
Adding battery storage
Solar customers that install small-scale batteries as part of their current PV system are eligible to receive feed-in tariffs for the electricity generated and exported by their system to their retailer.
This also means that you can install a battery and still receive the PFIT until the scheme ends, as long as you maintain your eligibility requirements as outlined in your contract.
Rates after the PFIT scheme ends
In Victoria, minimum solar feed-in tariff rates are determined every financial year by the Essential Services Commission (ESC) in accordance with requirements in the Electricity Industry Act 2000. You can read more about how the ESC sets minimum feed-in tariff rates and its most recent decision at Minimum feed-in tariff | Essential Services Commission.
Electricity retailers must offer at least one of the minimum feed-in tariffs, and are free to offer above (but not less than) these minimum rates.
Rationale for the scheme closure
The PFIT scheme was legislated in 2009 to provide early adopters of solar panels with a guaranteed feed-in tariff for 15 years. Under the legislation, the scheme is due to end on 1 November 2024. The PFIT scheme was funded by electricity distribution businesses which pass on the costs of the scheme through increases in the tariffs they charge all Victorians, including non-solar customers.
Minimum feed in tariff rates have also been decreasing over time due to declining daytime wholesale electricity market prices. This reflects the changing value of solar exports, given increasing solar generation across Victoria and low wholesale electricity prices during daylight hours (when most excess solar generation is being sent back into the grid). The ESC highlights that if retailers were required to pay solar customers more than the value of solar exports, this would increase retailers’ costs and be reflected in higher prices for their other electricity customers.
Page last updated: 17/09/24