Feed-in Tariff updates


Changes to the Feed-in Tariff scheme that will come into force on 1 August 2012.  As you may be aware, the Government consulted on the future of the Feed-in Tariff scheme for solar PV systems (Phase 2A Consultation) on 9 February 2012. The Government published its Decisions on 24 May 2012.

Solar PV Feed-in Tariff rate changes

The significant changes to the Feed-in Tariff scheme and rates for solar PV that will take effect from 1 August 2012 are summarised below:

  • the tariff for domestic installations will be set at 16p;
  • the export tariff will be increased from 3.2p to 4.5p;
  • the RPI link will be maintained;
  • the Feed-in Tariff lifetime has been reduced from 25 to 20 years for new installations;
  • the multi-Installation tariff will be set at 90% of the standard generation tariff (rather than 80% at the moment);
  • the Mandatory FiT Licensees’ threshold has been increased from 50,000 customers to 250,000 customers.

Consumer Guidance on the Feed in Tariff scheme. Can be found here:  www.realassurance.org.uk/consumers/feed-in-tariffs

A more detailed summary can be found in DECC's consultation response: www.decc.gov.uk/assets/decc/11/meeting-energy-demand/renewable-energy/5386-government-response-to-consultation-on-comprehensi.pdf
DECC has also published FAQs on its website here: www.decc.gov.uk/en/content/cms/meeting_energy/renewable_ener/feedin_tariff/fits_faqs/fits_faqs.aspx

The Government's consultation response also set out the cost reduction mechanism that will govern the way Feed-in Tariff rates can be changed in the future.
tariff rate changes are scheduled to take place every 3 months - January, April, July and October each year

  • the tariff rate changes will be determined by the volume of deployment in the specified 3-month period;
  • the tariff rate changes will be announced 1 month following
  • the period in question and implemented 2 months later;
    if the threshold is breached a tariff rate reduction (from 3.5%-28%, subject to deployment) will be announced at
  • the end of the following month, and come into effect two months later;
  • if the deployment trigger is not reached, then no tariff rate reduction will take place;
  • two successive quarters without a tariff rate reduction will be followed by a guaranteed tariff rate reduction of minimum 3.5% in the third quarter.
  • there are three different degression bands
    domestic (0 - 10kWp)
  • small commercial (10 – 50kWp)
  • large commercial (over 50kWp and stand-alone).

(The tariff rate degression in each band is not linked to the deployment rates in the other bands.)

Non-PV technologies

The Government also consulted on the future of the Feed-in Tariff scheme for non-solar PV systems supported under the Feed-in Tariff Scheme (Phase 2B Consultation) on 9 February 2012. The Government published its Decisions on 20 July 2012. These Decisions are due to come into force on 1 December 2012, but they have not been laid before parliament yet. They include new rules for community solar PV installations. You can find more details here: www.decc.gov.uk/en/content/cms/meeting_energy/Renewable_ener/feedin_tariff/feedin_tariff.aspx

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