From 1 July 2025, the Victorian Government will remove the regulated minimum feed-in tariff for solar exports. Electricity retailers will now have full discretion over what they pay for solar energy exported to the grid – provided the rate remains above zero.

While this may seem like a technical adjustment, it could have real consequences for businesses that export solar – particularly those relying on feed-in tariffs to support the return on investment for their solar infrastructure.

Here’s what you need to know.

Why Deregulate Feed-in Tariffs?

Historically, Victoria’s Essential Services Commission (ESC) set a minimum feed-in tariff each year. This gave solar customers a guaranteed baseline payment per kilowatt-hour exported, regardless of market conditions.

But in recent years, the value of solar exports has declined. Daytime wholesale electricity prices (when most solar is exported) have fallen, leading the ESC to set a near-zero minimum feed-in tariffs for 2025–26. In response, the Victorian Government has opted to deregulate the feed-in tariff altogether, arguing that the existing mechanism no longer provides meaningful benefit.

Opportunities

For forward-thinking businesses, deregulation may open the door to more flexible, market-aligned value streams:

• Tailored feed-in tariffs
  Larger energy users may be able to negotiate bespoke feed-in tariffs as part of broader procurement agreements – especially those with high export volumes or embedded networks.
  
• Time-based and incentive-driven structures
  Expect more feed-in tariffs that reflect real-time grid conditions. Exports during periods of high demand (e.g. late afternoon or during peak pricing events) may attract higher rates.
  
• Alignment with market dynamics
  Businesses with batteries or flexible load profiles can benefit from feed-in tariffs that reward well-timed exports – or optimise for solar arbitrage by storing energy when prices are low and exporting or consuming it when prices are high.
  
• Strategic contracting
  With no regulated minimum in place, energy consultants can help businesses negotiate feed-in tariffs that better reflect their usage patterns, export volumes, and overall energy strategy

Risks

Without a minimum rate in place, solar-exporting businesses face greater variability and complexity:

• Lower baseline rates
  Retailers may offer minimal tariffs during midday oversupply, when wholesale prices are lowest – reducing export value.
  
• Difficult comparisons
  With no standard benchmark, it becomes harder to compare offers. Tariffs may now vary based on time, usage patterns, or broader contract terms.
  
• Uneven outcomes for SMEs
  Smaller businesses may lack the visibility or leverage to access competitive rates – particularly without regular contract reviews or expert support.
  
• Reduced solar ROI
  Businesses that relied on strong export income to justify solar investments may need to revisit financial assumptions and shift focus toward self-consumption or storage.

Potential Unintended Consequences

While deregulation is designed to remove red tape and enable innovation, it may also create ripple effects regulators haven't fully anticipated:

• Reduced confidence in solar
  Sharp drops in export value, without clear explanation, could weaken trust in solar as a viable commercial investment – slowing future uptake.
  
• Disadvantage for SMEs and embedded networks
  Businesses without scale or specialist support may see diminishing returns. For embedded networks, this could disrupt how value is shared across tenants.
  
• Widening performance gap
  Proactive, well-advised businesses are likely to optimise returns – while less engaged users may be left behind.
  
• Peak demand pressure
  If feed-in tariffs don't encourage exports at the right time (e.g. late afternoon in summer), the grid may still rely heavily on centralised generation – and face tight supply margins during heatwaves or high-demand periods.
  
• Loss of visibility for policymakers
  Without a minimum feed-in tariff as a reference point, it may become harder to track export value across the market – limiting future regulatory insight or intervention

Repositioning for Value

The removal of Victoria’s minimum feed-in tariff won’t automatically eliminate value for solar-exporting businesses – but it is likely to shift where that value lies. From 1 July, tariffs will be shaped by market dynamics and retailer discretion, meaning businesses may need to be more strategic to maintain or improve their return.

If your business exports solar, now is the time to start reassessing:

• Will your current retail plan remain competitive after deregulation?
• Is your solar system configured to support your actual usage patterns?
• Could storage, arbitrage, or contract restructuring create new value streams?

Utilizer can help you prepare for what’s ahead – with clear advice, tailored insights, and strategies designed to help you navigate this shift with confidence. Reach out to one of our expert energy consultants today.

More power to you.