Projects such as Yackandandah’s solar grid are difficult to implement because users still have to pay to access the wider electricty grid.

A parliamentary inquiry into community energy projects recommended the Victorian government change this legislation, after hearing evidence from groups such as Totally Renewable Yackandandah.

But the government response handed down this week found “regulatory changes to network pricing is not necessarily the most effective or equitable way” to reward renewable energy projects because their impact was too varied.

“This variability would make a mandatory scheme too complex and costly to implement, or else overpay some consumers who are not providing network benefits while undervaluing the benefits provided by others,” the report stated.

The government committed to exploring other options to create a “market-based approach” to the pricing issue.