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Australian state of Victoria to cut Solar Subsidies by 70% as previous 60% cut fails to dampen the Boom

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Solar Power/ Subsidies Victoria, Australia

Australian Solar Power  has seen a massive boom of rooftop solar power plants as various states in Australia have offered generous solar rebates. This has led to many state Governments cutting back sharply to reduce their subsidy burdens. But the collapse in solar panel prices has meant that even after cutting back the subsidies the boom has not stopped. The fall in solar module price from $2 watt a year ago to around 65c/watt now means that it is stil lucrative for solar homeowners to install solar panels in Australia.

Victoria has now cut the solar feed in tariff drastically to just 8c/kwh from 25c/kwh earlier which means that the FIT has now become lower than the price of electricity. This was done after a previous cut from 60c/kwh to 25c/kwh led to an increase in demand of for solar feed in tariff by 33%.

Solar Rebates in Victoria

Residential – The Solar Net  Feed-in Tariff will offer eligible properties with small-scale solar PV systems of up to five kilowatts in size a credit of at least 25 cents per kilowatt hour for excess electricity fed back into the grid. The scheme is expected to be available from 1 January 2012, replacing the Premium Feed-in Tariff. This scheme is intended to have a capacity cap of 75 megawatts of installed solar systems across the state, and provide eligible signed-up customers with guaranteed credits until the end of 2016. This new Transitional Feed-in Tariff replaces the Premium Feed-in Tariff was introduced in 2009 and offered 60 cents per kilowatt hour.


  • have a solar PV system no greater than five kilowatts in size
  • be claiming for your principal place of residence (if you are a household)
  • consume 100 megawatt hours or less of electricity per year (if you are a small business or community organisation) claim only one solar PV system per site (if you are a small business or community organisation operating across multiple sites, you can claim for one system per site)
  • have bi-directional metering in place that measures two-way electricity flows and records them on a half hourly basis

Read more here.


Energy Minister Michael O’Brien says a significant reduction in the tariff this year did not affect the take-up of solar energy.

“When we stepped down the subsidies from 60 cents a kilowatt-hour last year, to 25 cents a kilowatt-hour this year, we actually saw demand increase by 33 per cent,” he said.

He says the feed-in tariffs are not driving the growing popularity of solar energy.

“What’s driving the take-up of solar is people want to be more energy self-sufficient, the cost of solar systems has plummeted, the price of electricity is rising,” he said.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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