The Essential Services Commission in Victoria has released a new framework for time-varying feed-in tariffs, with rates varying from 29c/kWh during peak and 7.2c/kWh for off-peak periods.

The current minimum rate for solar energy from rooftop systems exported to the grid is a flat 11.3c/kWh.

The new tariff structure will apply from July 1, 2018.

Clean Energy Council director of energy independence Darren Gladman says a time-varying feed-in tariff will improve the business case for batteries without the need for any subsidies.

“Time-varying feed-in tariffs will provide an incentive for investment in batteries, leading to a reduction in electricity costs to other consumers,” Gladman said.

“By paying the fair value of electricity fed into the grid at peak times, households and businesses will have the incentive to invest and will support the system by providing power when the system needs it most.”

Wholesale power prices can increase to more than a hundred times the average price during peak periods when demand is high and the system is under strain, he said.

As an example of peak prices influencing the bills of all consumers he pointed to a Productivity Commission estimate that in NSW peak demand events occurring for less than 40 hours per year (or less than 1% of the time) account for around 25% of retail electricity bills.

“By providing an incentive to households and businesses to generate at peak demand periods, the electricity bills of all customers will be reduced,” Gladman said.

“Other states should follow the Victorian Government’s lead and pay battery owners a fair value for the electricity they feed into the grid at peak periods.

“Time-varying feed-in tariffs enable households and businesses to compete to supply power at peak times. Electricity in Victoria will be cheaper and more reliable as a result of these sensible feed-in tariff reforms.”