Feed-in tariffs scheme consultation launched

Updated October 2011

Since the Feed-In Tariff (FIT) scheme was introduced 18 months ago, it is reported that over 100,000 homes now generate their own electricity and that the costs of an average PV system are 30% less than when the scheme started. The Department of Energy and Climate Change (DECC) has now published the outcome of the comprehensive review of the FIT scheme which incorporates a further fast track review for solar PV projects.

The consultation proposes introducing new tariffs for all new solar PV installations with a totalled installed capacity of less than 250kW. For eligible installations commissioned on or after 12 December 2011, the new proposed generation tariffs range from 12.9p/kWh for installations with a capacity of more than 100kW, (currently 19p/kWh), to 21p/kWh for systems with a capacity of 4kW or less, (currently 43.3p/kWh). The estimated rate of return will therefore be reduced to 4.5-5%.

The proposed tariffs will apply from 1 April 2012 to all new solar PV installations with an eligibility date on or after 12 December 2011. In order for an installation to continue to be eligible for the current generation tariffs it must be commissioned and have its accreditation request received by a FIT licensee (schemes up to 50kW) or Ofgem (more than 50kW) by 12 December 2011. Installations with an eligibility date between 12 December 2011 and 31 March 2012 will move on to the new tariff from 1 April 2012.

The consultation also proposes the introduction of new multi-installation tariff rates for aggregated solar PV schemes, where a single individual or organisation owns or receives FIT payments from more than one PV installation, located on different sites. The new tariffs would be set at 80% of the standard tariffs for individual installations and would range from 10.3p/kWh for installations with a capacity of more than 100kW, to 16.8p/kWh for systems with a capacity of 4kW or less. The proposed tariffs are intended to apply to all new aggregated solar PV schemes with an eligibility date on or after 1 April 2012.

The consultation is also seeking views on the introduction of a new energy efficiency requirement for FITs for solar PV, either by reaching an Energy Performance Certificate level C or by basing it on measures potentially eligible for Green Deal finance. This requirement would apply to all new solar PV installations with an eligibility date on or after 1 April 2012 which are attached or wired to provide electricity to a building. If the building does not meet the energy efficiency requirement the installation would receive a lower FITs rate of 9p/kWh.

Responses to the Feed-in Tariff proposals are due by 23 December 2011.

DECC also launched a consultation on the Renewables Obligation (RO) Banding Review on 20 October 2011. The consultation proposes levels of banded support for different renewable technologies for the period 1 April 2013 to 31 March 2017. The proposals include the reduction of support for onshore wind from 0.9 ROCs/MWh (currently 1ROC/MWh) and the reduction of degression for solar PV. Responses to the consultation are due by 12 January 2012.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at October 2011. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.

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