Victoria's Feed-in Tariff Has Collapsed — Here's What Actually Saves You Money Now

If you installed solar in Victoria a few years ago, you probably did the maths expecting a tidy cheque from your retailer for every kilowatt-hour you sent back to the grid. Those days are over. The Victoria feed-in tariff in 2026 has collapsed to almost nothing — the regulated minimum is now just 0.04c/kWh, down from 3.3c/kWh only a year earlier. For many households that single change has rewritten the economics of rooftop solar.

The good news is that solar in Victoria is still very much worth it. What has changed is where the savings come from. Exporting power to the grid is no longer the prize; using your own power is. This guide explains what happened, why, and what actually saves you money now.

What happened to Victoria's feed-in tariff

The feed-in tariff (FiT) is the rate your electricity retailer pays you for surplus solar you export to the grid. In Victoria, the Essential Services Commission sets a regulated minimum retailers must offer.

For 2024-25, that minimum was a flat 3.3c/kWh. It was never generous, but on a typical 6.6kW system it added up to a meaningful slice of the annual benefit.

For 2025-26, the regulated minimum has been cut to a flat 0.04c/kWh. That is not a typo — four hundredths of one cent per kilowatt-hour. In practical terms, the guaranteed floor for exported solar is now effectively zero.

Retailers can offer more than the minimum, and some do. Time-varying feed-in plans pay up to around 6.57c/kWh during the evening peak — but roughly 0c during the middle of the day, precisely when your panels produce the most. A handful voluntarily offer a few cents more (in the order of 5–10c) on certain plans, often as a marketing hook. But the era of a reliable flat rate you could bank on has gone.

It's worth keeping the scale in perspective. Even at 3.3c/kWh, the feed-in tariff was always the smallest lever in your solar economics, sitting against grid usage rates many times higher. The collapse to 0.04c/kWh removes that modest credit almost entirely but leaves the far larger benefit — avoiding grid purchases through self-consumption — untouched. That distinction is the single most important idea in this guide.

Why the feed-in tariff collapsed

This is not retailers being stingy. It is basic supply and demand playing out across an entire state.

Victoria, like the rest of Australia, has installed an enormous amount of rooftop solar. On a sunny day, hundreds of thousands of homes all export power into the grid at once, in the middle of the day, when demand is relatively low. When everyone is selling and few are buying, daytime wholesale prices collapse and at times go negative. The feed-in tariff broadly tracks what exported energy is worth on that wholesale market, so when midday power is worth almost nothing to the grid, the rate follows. The evening peak — after the sun sets and demand climbs while solar drops off — is the only window where exports still command a real price, which is why time-varying plans pay more then. In short, rooftop solar has become a victim of its own success: so widely adopted that the daytime export it produces is now abundant and cheap.

The duck curve, explained simply

Energy market analysts have a name for the shape this creates: the "duck curve." Picture the electricity the grid needs from large power stations across a day. As the sun climbs, rooftop solar floods in and meets demand straight from people's roofs, so the amount needed from big generators slumps through the middle of the day — the duck's belly. Then the sun sets, solar drops away within an hour or two, everyone gets home and switches on lights, cooking and heating, and demand rockets back up — the duck's steep neck.

The price story follows the shape. In the belly of the day the grid is practically drowning in cheap solar, so one more exported kilowatt-hour is worth close to zero, sometimes less. In the early-evening neck, solar has vanished but demand peaks, so power is genuinely scarce and valuable. Your feed-in tariff is just this curve on your bill: near-nothing when you have most to export, and worth a few cents only in the narrow evening window when you typically have nothing left to sell. That is the whole reason "use it, store it, or lose it" has become the new rule for rooftop solar.

What this means if you already have solar

If you are reading your latest bill in dismay, take a breath. A near-zero feed-in tariff reduces one component of your solar benefit — the credit for exported energy — but does nothing to the much larger benefit: the power you generate and use yourself.

Every kilowatt-hour your panels produce that you consume on-site is one you don't buy from the grid. With Victorian usage rates sitting well above 25–30c/kWh on most plans, avoiding that purchase is worth far more than the old 3.3c export credit ever was, let alone the new 0.04c.

So the headline shift is this: your solar system has quietly changed from an income-generating asset into a bill-reduction asset. The dollars are still there; they've just moved from the "feed-in credit" line of your bill to the "usage" line.

If you already own a system, the takeaway is that you don't need new hardware — you need new habits. The self-consumption tactics below are aimed squarely at existing owners, because they cost little or nothing and recover most of what the collapse appears to have taken; the one piece of hardware worth re-examining is a battery, covered below. (A few very early adopters are still on grandfathered premium feed-in schemes — if that's you, confirm your position with your retailer before assuming the new minimum applies.)

Why solar is still worth it in Victoria

Let's put numbers on it. A typical 6.6kW system in Victoria still saves a household roughly $1,000–$1,600 a year and pays for itself in about 3–5 years. Treat those as estimates, not a quote — your figures depend on your usage pattern, your plan, your roof and how much generation you can soak up yourself.

Crucially, that payback now assumes most of the value comes from self-consumption, not exports — a system sized and used to maximise self-consumption can land in that range even with a feed-in tariff of effectively zero. If you've been wondering whether the collapse changes the answer to is solar worth it in Victoria, the short version is yes, it still stacks up — the case has simply moved from selling power to not buying it.

If you don't yet have a system, the upfront solar costs are the other half of the equation, and they have fallen substantially over the past decade. Lower install costs plus high grid prices keep the payback short, even as feed-in tariffs disappear.

How to read your electricity bill and compare plans properly

Before you can optimise anything, you need to understand the three numbers that drive a solar household's bill. Every plan has them, and they now matter in very different proportions.

• The daily supply charge. A fixed fee in cents per day for being connected to the grid, regardless of usage. Solar can't reduce it, it varies meaningfully between retailers, and a high one quietly erodes the savings you create elsewhere.
• The usage (buy) rate. What you pay for every kilowatt-hour you import, generally around 25–30c/kWh in Victoria. For a solar home this dominates the bill, because you import morning, evening and overnight when the panels aren't producing. Shaving cents off it, or importing fewer kilowatt-hours at it, is where the real money is.
• The feed-in (export) rate. What the retailer pays you for surplus solar, now a regulated minimum of 0.04c/kWh — close to a rounding error on most bills.

These three numbers move independently, and retailers know which one customers instinctively chase. To compare two plans fairly, take your annual import in kWh from past bills, multiply by each plan's usage rate, add a year of the daily supply charge, and only then subtract the small export credit. The lowest total wins — and for a solar home that almost always comes down to the usage rate and supply charge, not the feed-in tariff.

How to lift your self-consumption (the part that actually pays now)

Because the money is now in using your own power, the single most effective thing you can do is shift energy-hungry tasks into daylight hours, when your panels are generating for free. Every load you move from the evening (bought from the grid) to midday (made on your roof) is a direct saving. Practical ways to do it:

• Heat your hot water during the day. Electric hot water is often the biggest single load in a home. Set it to heat in the early afternoon rather than overnight; if you're on a controlled-load/off-peak tariff, ask your retailer about switching to a daytime solar soak. A storage tank is in effect a cheap thermal battery — heat it while the sun is up and it stays hot for your evening showers at no extra cost.
• Run the pool pump in the middle of the day. Pool pumps draw a lot of power over long hours. A timer running it from late morning through early afternoon turns one of your bigger costs into a free one.
• Time the dishwasher and washing machine for midday. Use the delay-start function so they run while the sun is up rather than after dinner. Line-drying clothes by day instead of running an electric dryer at night is the same principle at its simplest.
• Pre-cool or pre-heat the house while the sun is up. Air conditioning and heating are among the heaviest loads in a Victorian home. Use solar hours to bring the house to temperature and let the building's thermal mass coast through the early evening — pre-cool on a hot afternoon, pre-heat before the sun drops. You're storing energy in the fabric of the house instead of exporting it for 0.04c.
• Charge your EV during the day where you can. Charging off your own solar is dramatically cheaper than grid power at night, and smart chargers can be set to draw only when there's surplus. For many households an EV is the single largest controllable load they have, making daytime charging one of the highest-value habits here.
• Put a timer on everything you can. Cheap plug-in or built-in timers align your discretionary consumption with your generation curve, which peaks around midday — and a heat pump for heating, cooling or hot water can be scheduled the same way, doing the bulk of its work on free solar then coasting into the evening.

None of these require new hardware beyond a timer or two, making them the highest-return, lowest-cost moves available to any solar household in 2026. Stack several together and a typical home can lift its self-consumption substantially — and because each kilowatt-hour displaces power you'd otherwise buy at 25–30c, the yearly effect dwarfs chasing a slightly better feed-in rate. Our savings checker lets you test what those changes do to your numbers.

The battery argument: shifting solar into the peak

There is a limit to how much you can self-consume during the day — most homes use the bulk of their power in the evening, after the panels stop. That gap is exactly what a battery fills, storing cheap daytime solar and discharging it in the evening when you would otherwise buy expensive grid power. Think of the duck curve again: a battery fills the belly and empties into the neck. It soaks up midday surplus that would otherwise flow to the grid for 0.04c, and releases it when grid power costs 25–30c or more. The wider that gap between export value and import cost, the more each stored kilowatt-hour is worth — and that gap has never been wider. This is the core reason batteries have climbed so many Victorian households' lists in 2026: the collapse didn't just cut export income, it sharply raised the value of not exporting.

The federal rebate

The economics of home batteries have also improved. The federal Cheaper Home Batteries Program, live since 1 July 2025 and running through to 2030, knocks roughly 30% off the cost of an eligible battery, bringing typical payback into the range of about 5–12 years, depending on your system size, usage and how hard you shift load into the peak. Treat those as estimates, not firm quotes.

The discount is applied up front through your installer rather than claimed back later, keeping the out-of-pocket price lower from day one, and stacks on top of the case Victorian households already have from high usage rates and near-zero feed-in. Our home battery cost guide walks through how the program works and what to expect to pay.

Virtual power plants and their trade-offs

There's one more piece worth understanding: virtual power plants, or VPPs. A VPP links thousands of home batteries together and draws on them during peak demand, paying you for the energy or capacity it uses — a revenue stream on top of your own peak-shifting savings that can meaningfully shorten payback. The trade-off is control: you're letting the operator discharge your battery at times that suit the grid, not necessarily you, so on the very evenings you most wanted your stored solar it may have been partly emptied. Different VPPs set different caps and payments, so read the fine print and weigh the extra income against losing the certainty of a full battery. For a household focused on resilience, a standalone battery may be preferable; for one chasing the fastest payback, a well-chosen VPP can help.

Whether a battery makes sense ultimately comes down to your evening usage and the install price after the rebate. For many Victorian households, the feed-in collapse is precisely what tips a battery from "nice to have" to "worth modelling seriously," because the stored energy no longer competes against a worthwhile export credit.

Choosing a retailer plan now that the FiT barely matters

When feed-in tariffs were 3.3c flat, shopping for the highest FiT made sense. That instinct is now dangerous, because some retailers dangle an eye-catching feed-in rate while charging well-above-market usage and supply rates to claw it back. Here's how to compare plans sensibly in 2026:

• Weigh the whole plan, not the FiT. Look at the daily supply charge, the usage rate and the feed-in rate together. For most solar homes the usage rate dominates, because you buy power in the evening and export it for almost nothing during the day.
• Don't chase a high feed-in tariff at the expense of high usage rates. A plan with a headline feed-in rate but a usage rate several cents above a competitor will usually leave you worse off, because you import far more than you export.
• Consider whether a time-varying plan suits you. Time-of-use plans that pay more at the evening peak only help if you have surplus solar to export then — which, without a battery, you generally won't. A time-of-use buy rate can work in your favour if you've shifted consumption into solar hours and a battery covers the evening, but it punishes you if your usage is concentrated in the peak.
• Model it against your own bill. The right plan depends on your consumption shape. You can estimate your savings under different assumptions before you commit, rather than trusting a marketing headline.

The principle is simple: optimise for the lowest total annual cost, not the biggest feed-in number.

Sizing implications: build for self-consumption

The collapse also nudges how you should think about system size, especially if you're installing fresh or expanding. When exports paid reasonably, oversizing your array to "sell the surplus" had some logic. Now that surplus earns almost nothing, the value of every extra panel depends on whether you can actually use what it produces — which argues for sizing to your daytime consumption, recognising that energy you can neither use, store nor profitably export is worth very little.

A battery changes that calculus: pair a larger array with storage and the midday surplus has somewhere valuable to go — into the evening peak instead of the grid for 0.04c. So the two decisions are linked: for self-consumption alone, modest is sensible; with a battery, a larger array that fills it each day can pay off.

Timing matters too. Because the Cheaper Home Batteries Program runs through to 2030, you don't have to add storage on day one. A reasonable path is to size the panels to feed both your shiftable daytime loads and a future battery, choose the inverter and wiring with storage in mind, then add the battery later once you've seen your real usage and the after-rebate price. Either way, model your usage curve, size for what you can use or store, and choose a plan with low usage rates. If you'd like installers to do that modelling for your roof and bills, you can get free quotes and compare what they propose.

Is solar still worth it? A balanced verdict

Does all of this add up to a recommendation, or just a list of caveats? The honest answer is that solar in Victoria remains a strong investment for most households — but the case is no longer automatic, and it rewards households that engage with it. The reasons it still works are concrete: install costs have fallen for years, grid usage rates are high with no sign of dropping, and the value of self-consumption scales directly with those rates. The estimated $1,000–$1,600 a year on a 3–5 year payback already assumes the feed-in tariff contributes essentially nothing, so the collapse is baked in and the case still holds.

The caveat is equally concrete. If you can't shift any load into daylight — say an all-electric household that's empty every weekday and uses everything at night — your self-consumption will be low, and without a battery a chunk of your generation flows out for 0.04c. Solar still helps, but the returns are softer and a battery (or a real change in habits) is closer to essential than optional.

So the balanced verdict: for a household that will shift even a few major loads into the day, and ideally add a battery over time, solar in Victoria is still clearly worth it. For one unwilling or unable to change when it uses power, the benefit is real but more modest, and worth modelling carefully against your own bill first. The technology hasn't got worse; the rules have simply changed to reward using your own power rather than selling it.

The bottom line

Victoria's feed-in tariff has, for all practical purposes, gone to zero — 3.3c/kWh in 2024-25 to a regulated minimum of 0.04c/kWh in 2025-26 — because abundant daytime rooftop solar has crushed wholesale prices. That's a real change, and it stings on the bill.

But it doesn't break the case for solar. A 6.6kW system still saves an estimated $1,000–$1,600 a year and pays back in roughly 3–5 years — the value has simply migrated from exporting power to consuming your own. Compare plans on total cost rather than a flashy feed-in figure, shift your hot water, pool pump, dishwasher and EV charging into daylight, and seriously consider a battery to carry cheap daytime energy into the expensive evening peak. Do those things, and solar in Victoria still pays — just on different terms than it used to.