Victorians with rooftop solar will get virtually nothing for feeding power to the grid

“Policies should continue to seek to expand rooftop solar production because, by far, it’s the best thing governments can do,” he said.

“But sadly many of them drag their feet, and I don’t know why. Politically, its extraordinarily popular, reduces the need for masses of transmission, land for wind and solar farms … Both [federal] major parties have put in place policies that are going to deliver an energy crisis.”

The Essential Services Commission is legally required to set a minimum rate that energy retailers must pay their solar customers – but companies can offer to pay more. The proposed rates are open for consultation until the end of this month, with the commission to finalise its decision at the end of February.

While feed-in tariffs were initially implemented to increase rooftop solar and provide an incentive for households, the need for profit incentive has come down since installation costs have also fallen.

The future of the solar network will rely on people conserving surplus energy in batteries and households being encouraged to consume more power during the day.

In handing down the draft decision on Friday, Brody said independent analysis from the St Vincent de Paul Society showed households with rooftop solar had bills up to $900 a year cheaper.

The Australian Energy Council, the peak body for electricity retailers, said it did not expect the lower wholesale price for solar power to be fully passed onto consumers because of the complex nature of calculating costs.

A council spokesman said 80 per cent of Australians’ bill were made up of the cost for generating and distributing that power, which would not be affected by the price of feed-in tariffs.

“The challenge the grid has got now with the transition [to renewable energy] is how we best make use of that,” the spokesman said.

“How can we tap more out of solar, get better use out of it? How can we tap electric vehicle batteries and household battery storage?

“People have to consider their own economics, and whether they need storage.”

Energy Minister Lily D’Ambrosio said applications for solar panel rebates had lifted by 15 per cent in the past financial year.

However, Victoria was significantly behind its annual target for rebates, according to the Department of Energy, Environment and Climate Action’s most recent annual report, which revealed finalising loan agreements and meeting responsible lending obligations had caused delays. Solar Victoria approved 2036 applications in the past financial year – well short of its target of 4500.

“The huge uptake of solar in Victoria has helped push daytime wholesale prices to historic lows – meaning lower power bills for everyone,” D’Ambrosio said.

Opposition energy and resources spokesman David Davis said the decision to slash tariffs would “pull support from people who in good faith had invested in solar rooftop systems”.

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