Victoria solar incentives and feed-in tariffs 2021

We’ve collated the solar incentives available in 2021 to help homeowners the switch!

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Are you a VIC homeowner looking for solar? Below we’ve detailed the Victoria solar incentives available in 2021. 

Victoria offers a variety of electricity tariffs, to suit the needs of different users. According to a 2020 report from the Australian Energy Market Commission (AEMC), Victorian homeowners are charged on average 29.28 cents/kWh and during peak demand hours, prices reach up to 50 cents/kWh. Expensive electricity means high power bills for homes using energy from the grid, but a great opportunity to save with solar.

Victoria solar incentives 2021

Small-scale Technology Certificates (STC)

Currently, solar systems in Victoria (VIC) get Small-scale Technology Certificates (STC) from the SRES, plus a local government incentive of up to $1,850. After subtracting these incentives, VIC has some of the cheapest solar installation costs in Australia.

The SRES awards STCs based on the estimated electricity generation by the end of 2030. Since each passing year is subtracted from the calculation period, the STC incentive decreases gradually.

Example STC scenario: 

  • In 2021, a 6-kW solar system in Melbourne gets 71 STCs. 
  • This means the 6-kW system has an estimated output of 71,000 kWh over a 10-year period, if installed in Melbourne.
  • Considering an average STC price of $38, the solar incentive is equivalent to $2,698, or $450 per kilowatt.
  • The typical price of a 6-kW solar system is around $9,600 before incentives, and STCs can reduce it to $6,902, covering 28% of the cost.

Northern VIC is sunnier, and more STCs are awarded for higher solar capacity. For example, a 6-kW solar system in Mildura gets 82 STCs. In this case, the resulting incentive is $3,116, equivalent to $519 per kilowatt.

Remember, to be eligible for this benefit, a solar system must be installed by a Clean Energy Council Accredited Installer, such as Instyle Solar. The installer must also use solar panels and inverters from the CEC approved list, while following Australian and New Zealand standards.

If you need further information about the Small-scale Renewable Energy Scheme, please visit the Australian Government Clean Energy Regulator website.

Solar Victoria 

Thanks to the Solar Victoria program, PV systems can also get local incentives of up to $1,850 until 30 June 2021. For the 6-kW solar installation in the example above, the net cost is further reduced to $5,052. This incentive can be complemented with an interest-free loan of up to $1,850, which must be repaid in four years. Combining the Solar Victoria incentive and loan, the 6-kW system in the previous example has a net cost of only $3,202.

The Solar Victoria incentive and loan are available for both owner-occupied homes and rental properties. This benefit is available for households with an income of up to $180,000 per year, and where the property value is less than $3 million. The incentive can only be used for a new solar system, and not to expand an existing installation.

The Solar Victoria program is only available for homes as of early 2021, but the state government has also announced a solar incentive program for businesses.

If you need further information about this solar incentive in Victoria, please visit the Solar Panel Incentive website from the VIC government.

Solar Battery Incentive

The Solar Victoria program also offers battery incentives of up to $4,174 until 30 June 2021. This incentive does not come with an interest-free loan like the solar panel incentives, but is compensated by its higher value. At first, battery incentives were only available in some VIC postcodes, but they are now offered state-wide. This incentive is only available for owner-occupied homes, and not rental properties.

Eligibility conditions for the battery incentive are similar to those of solar panels: a maximum household income of $180,000, and a property value below $3 million. However, the property must also have a solar system with at least 5 kW of capacity, to ensure that batteries are charged with solar generation. Only batteries in the program’s approved list are eligible, and the connection must be authorized by the Distributed Network Service Provider (DNSP).

If you need further information about this solar battery incentive in Victoria, please visit the Solar Battery Incentive website from the VIC government.

Solar Hot Water Incentives

The Solar Victoria program also offers Incentives of up to $1,000 for solar hot water systems, which are useful in homes that lack adequate conditions for photovoltaic panels. This incentive is also an option for homeowners who already have a PV system, and cannot claim the solar panel incentives.

A solar hot water system can save on electricity or gas bills, depending on the type of heating system currently used. Solar water heating can save up to $400 per year according to the program website, and the conditions of the two previous incentives also apply – a maximum income of $180,000 and a property value below $3 million. There are also specific requirements:

  • The existing hot water system must be at least three years old.
  • The new solar hot water system must be on the Solar Victoria approved list.
  • New constructions are not eligible.

The solar hot water incentive is only available for owner-occupied homes and not for rental properties, just like the battery incentives.

If you need further information about solar hot water incentives in Victoria, please visit the Solar Hot Water Incentives website from the VIC government.

Victoria solar power feed-in tariffs

When surplus production from solar panels is exported to the electricity network, the rate paid to you is called the feed-in tariff (FIT). High FITs incentivise the use of solar since all the electricity produced becomes valuable, even if not consumed locally.  

The Victorian Government has established two minimum feed-in tariffs, which are applied depending on the user’s electricity tariff:

  • The single-rate FIT is 10.2 cents/kWh.
  • The time-varying FIT is 12.5 cents/kWh in peak hours, 9.8 cents/kWh in shoulder hours (hours bracketing the weekday morning and afternoon peak commute hours), and 9.1 cents/kWh in off-peak hours.

While these are the minimum FITs, electricity providers are free to establish higher tariffs. As a result, owners of solar systems in Victoria can get up to 20 cents/kWh. Below is an example of how the FIT affects the annual savings of a solar system:

  • Assume that a 6-kW solar PV system produces 7,800 kWh per year, but the owner only consumes 5,500 kWh of that total. The remaining 2,300 kWh are exported to the grid.
  • At 29 cents/kWh, 5,500 kWh are equivalent to $1,595 in power bill savings.
  • With the minimum FIT of 10.2 cents/kWh, the remaining 2,300 kWh are worth $235. However, a higher FIT of 14 cents/kWh increases the savings to $322.
  • The total annual savings are $1,830 with the minimum FIT, increasing to $1,917 with a higher FIT of 14 cents/kWh (around 5% higher).

For the latest feed-in tariffs and updates visit: https://wattever.com.au/retailer-solar-feed-in-tariffs-by-state-and-territory/ 

Am I eligible for a solar incentive? 

How much can I save with solar? 

Learn more via How Solar Works

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