Victorian solar households are now operating under a new landscape for maximising their energy savings, with the 2026-27 Victorian Default Offer (VDO) introducing a specific ‘solar soak’ period from 11 am to 4 pm. This strategic window, effective since July 1, 2026, is designed to encourage electricity consumption during peak solar generation times, fundamentally reshaping how solar owners can reduce their power bills in a state where minimum feed-in tariffs are no longer regulated.

Since July 1, 2025, the Essential Services Commission (ESC) has ceased setting minimum feed-in tariffs (FiTs) in Victoria, following an amendment to the Electricity Industry Act 2000. This deregulation means electricity retailers now determine their own FiT rates, which can range significantly, from as low as 0.04 cents per kilowatt-hour (c/kWh) to as high as 12 c/kWh from some providers like Origin Energy. The average minimum rate offered by retailers for 2026-27 has been observed around 0.8 c/kWh, a stark contrast to the ESC’s last set minimum of 3.3 c/kWh for 2024-25.

The VDO’s ‘Solar Soak’ and Its Purpose

The Victorian Default Offer serves as a safety net and reference price for customers who haven’t chosen a specific market offer. For the 2026-27 financial year, the ESC’s final decision on the VDO included a new three-part time-of-use network tariff structure, which explicitly incorporates an 11 am to 4 pm ‘solar soak’ period. This initiative aims to incentivise households to shift their energy use to the middle of the day, directly aligning with the times when rooftop solar systems generate the most electricity and wholesale prices are typically at their lowest due to abundant supply.

The rationale behind this structural change is rooted in the substantial growth of rooftop solar across Victoria. With increased solar penetration, daytime wholesale electricity prices have been driven down. By encouraging self-consumption during the ‘solar soak’ period, the VDO seeks to balance grid demand, reduce network strain, and allow solar owners to maximise the value of their self-generated power by avoiding higher retail import charges.

Strategies for Maximising Savings Amidst Deregulation

For Victorian solar households, adapting to this new energy landscape is crucial for optimising savings. With deregulated and often low feed-in tariffs, using your own generated power becomes far more valuable than exporting it to the grid. The ‘solar soak’ period provides a clear directive:

  • Shift Energy Consumption: Program or manually run high-energy appliances such as dishwashers, washing machines, clothes dryers, and pool pumps between 11 am and 4 pm. Charging electric vehicles (EVs) during this window can also significantly reduce household energy costs. This direct consumption of solar power avoids purchasing electricity at retail rates, which can range from approximately 26 cents to 35 cents per kWh, depending on the distributor.
  • Invest in Battery Storage: A home battery system allows excess solar generation during the ‘solar soak’ period to be stored and used during evening peak times, further reducing reliance on grid electricity when prices are highest. Households considering this option should be aware that the Clean Energy Regulator’s Small-scale Technology Certificate (STC) factor for batteries is set to step down from 6.8 per kWh of useable capacity (May-December 2026) to 5.7 (January-June 2027). This means installing a battery before January 1, 2027, could yield approximately 19% more certificates, impacting the upfront discount. For guidance on available support, see our guide: Secure Your $3,500+ Home Battery Rebate: Federal Discount Reduces Jan 1, 2027.
  • Optimise System Performance: Regular maintenance of your solar panels ensures maximum output, contributing more power for self-consumption. Refer to our comprehensive guide: Maximise Your Solar Output by 25% in 2026: Your Essential Australian Maintenance Guide.
  • Shop Around for Retailer Offers: With no minimum FiT, comparing competitive market offers from different retailers is more important than ever. While the VDO offers a baseline, many retailers provide market offers with varying FiT structures and rates that may better suit your consumption and export patterns.
  • Improve Home Energy Efficiency: Reducing overall energy demand lessens the amount of electricity you need to draw from the grid, making your solar generation go further. Comprehensive electrification strategies can lead to significant savings. Learn more here: Electrify Your Home in 2026: Real Costs, Rebates & Savings Up to $15,000+.

“The introduction of the ‘solar soak’ period in the Victorian Default Offer is a clear signal to solar owners: the value is increasingly in self-consumption. Those who strategically shift their energy use will see the greatest benefits on their power bills.” — Daily Energy News Analyst

VDO Price Reductions and Future Outlook

Beyond the ‘solar soak’, the 2026-27 VDO also brought overall price reductions. Domestic customers on the VDO are expected to save approximately $46 per year (3% on average), while small business customers could save around $172 per year (5% on average). These reductions are primarily driven by lower wholesale, network, and environmental costs. However, for solar owners, these general savings are amplified by proactive management of their solar generation and consumption patterns.

The ESC continues its oversight role to ensure retailers’ terms and conditions remain fair and reasonable, even without setting a minimum FiT. As Victoria’s energy market evolves, leveraging smart energy management and considering battery storage will be key for solar households to maintain and enhance their financial returns.