Victorian households and businesses with rooftop solar are navigating a significantly altered landscape for feed-in tariffs (FiTs) in the 2026-27 financial year, with average minimum rates dropping below 1 cent per kilowatt-hour (c/kWh). This shift follows the Essential Services Commission (ESC) ceasing to set a minimum FiT from July 1, 2025, leaving electricity retailers to determine their own rates – a change that continues to impact solar owners today.
For the 2025-26 and now 2026-27 financial years, the absence of a regulated minimum FiT has led to a substantial reduction in the payments solar owners receive for excess electricity exported to the grid. While the ESC previously set a minimum FiT of 3.3 c/kWh for 2024-25, recent analysis indicates that the average minimum rate offered by retailers for 2025-26 was around 0.8 c/kWh, a trend that is extending into 2026.
This dramatic decline directly affects the financial returns for Victoria’s more than 2 million solar-equipped properties, prompting a re-evaluation of solar investment strategies and energy consumption habits. The core benefit of solar now lies more firmly in self-consumption rather than exporting surplus power.
Why Victorian FiTs are Falling
The primary drivers behind the plummeting feed-in tariffs are multifaceted, reflecting broader changes in the National Electricity Market (NEM) and the rapid growth of rooftop solar in Victoria.
“Higher solar generation across the state has reduced wholesale prices during daylight hours. Although feed-in tariffs are generally lower than they were years ago, installing solar remains one of the smartest investments because the biggest savings come from using your own solar electricity, not exporting it.”
Firstly, the sheer volume of rooftop solar installations across Victoria has led to a significant increase in electricity supply during daylight hours. This abundance of solar power has driven down wholesale electricity prices, particularly during the middle of the day when solar generation peaks. Since FiTs are typically linked to wholesale prices, this surplus generation directly translates to lower export payments.
Secondly, the amendment to the Electricity Industry Act 2000 removed the ESC’s responsibility for setting the minimum feed-in tariff from July 1, 2025. While the ESC now maintains an oversight role to ensure retailer fairness and transparency, the competitive market has seen retailers offer increasingly lower rates to reflect the reduced value of exported energy during high-solar periods.
Impact on Victorian Solar Households
For many Victorian households that installed solar systems with the expectation of higher FiT returns, the current rates represent a considerable shift. The focus has decisively moved from earning significant credits for exports to maximising self-consumption.
Consider the historical context:
| Financial Year | ESC Minimum Single Rate FiT (c/kWh) | Retailer Average Minimum FiT (c/kWh) |
|---|---|---|
| 2023-24 | 4.9 | - |
| 2024-25 | 3.3 | - |
| 2025-26 | Not set by ESC | ~0.8 |
This table illustrates the stark change. While some retailers may offer promotional or time-varying FiTs that are marginally higher during evening peak periods, the overall trend for daytime exports is downwards.
Strategies for Maximising Solar Savings in 2026
With export payments diminishing, the most effective strategy for Victorian solar owners is to maximise their self-consumption of generated electricity. This means using as much power as possible directly from your panels instead of drawing from the grid or exporting it for minimal return.
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Shift Energy Usage: Run high-energy appliances like washing machines, dishwashers, and pool pumps during the middle of the day when your solar system is generating the most power. Smart home energy management systems can automate this process, potentially slashing your electricity bills by up to 30%. [cite: /articles/smart-home-energy-management-systems-australia-2026-guide]
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Invest in Battery Storage: A home battery system stores excess solar energy generated during the day for use in the evening or during blackouts. While the upfront cost can be significant (systems typically start from $7,000), they drastically increase self-consumption and provide energy independence. For a detailed guide, see Home Battery Backup for Blackouts in 2026: Systems & Costs from $7,000.
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Optimise System Sizing: Ensure your solar system is appropriately sized for your household’s actual consumption patterns, rather than oversized for export. An oversized system without battery storage will export more electricity when feed-in tariffs are low. Consider your future energy needs, especially if you plan to electrify your home or purchase an EV. Consult our guide on What Solar System Size Do You Really Need in Australia 2026? Future-Proofing for EVs & Electrification.
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Shop for Best Retailer Offers: Although minimum FiTs are low, retailers still offer varying rates and plans. It’s crucial to compare different electricity plans that might offer slightly better FiTs, or more importantly, better overall retail electricity rates, as the main benefit of solar is avoiding higher retail import prices.
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Consider Time-of-Use Tariffs: Some retailers offer time-varying FiTs, where export rates are higher during peak demand periods (e.g., late afternoon/evening). If you have battery storage or can strategically manage your exports, a time-of-use tariff could be beneficial. However, be aware that higher export rates often come with higher import rates during those same peak times.
While the era of high solar export payments in Victoria has largely passed, rooftop solar remains a valuable investment. The focus for 2026 and beyond is firmly on intelligent energy management and maximising the direct use of self-generated power to offset rising retail electricity costs. The ESC’s ongoing oversight aims to ensure retailers offer transparent and reasonable overall energy plans, but active consumer engagement is now more critical than ever.