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Feed In Tariff Update 24th May 2012

The Department of Energy and Climate Change (DECC) yesterday published the findings of their review on Solar PV cost control covering the proposed changes expected for the 1st July.  The review covered two areas.  Firstly, the level of Feed in Tariff (FiT) rate as of the next reduction, and secondly, how the FiT payments will be controlled for future installations.  As a result of the consultation process, and feedback received from both industry and homeowners, the government has delayed the next reduction in tariffs until 1st August 2012.

The proposed changed to come into force from 1st August 2012

  • The generation tariff payments for PV systems 0-4kW will be reduced from 21p/kWh to 16p/kWh with an EPC band D or above (if band E or less the tariff will be dropped to 7.1p/kWh).  This is to reflect the ongoing reductions in the cost of installations.
  • The export tariff for new installations will rise from 3.5p/kWh to 4.5p/kWh.  This is to reflect a more accurate value of the energy exported back to the grid.
  • The durations of payments will reduce to 20 years from 25 years.  This is to keep to solar PV payments in line with other technologies in the scheme.
  • Companies who are claiming FiT payments for more than 25 installations will receive a reduced rate of 90% (a multi installation tariff).  This is to reflect the reduced cost of installing multiple systems.

Solar PV tariffs from 1st August 2012

Available Band (kW)

Standard Generation Tariff (p/kW)

4kW (new build) 16.0
4 kW (retrofit) 16.0
4-10kW 14.4
10-50kW 13.5
50-100kW 11.5
100-150kW 11.5

150-200kW

11.0
250kW-5MW 7.1
stand-alone 7.1

Future Changes to the Feed in Tariff (FiT)

  • Future reductions will be made every three months (November, February, May and August).
  • Depending on uptake the reductions can be delayed for up to six months.
  • The government have set an average reduction of 3.5% every three months, it will however be depend on the installed capacity during the three months prior to the announcement.
  • The announcement will be made two months before any changes are to be made.
  • The reduction can range from 0% to 28%.
  • There will be separate rates of reduction for  0-10kW, 10-50kW and >50kW.

Act now to get the best tariffs for 25 years

We urge those looking to install solar PV to act now and get the best rate for 25 years.  There are incentives to act sooner rather than later! 

With the current generation tariff at 21p/kWh the reduction to 16p/kWh as of August highlights the importance of installing before the August deadline.  Even with the increase in export payments to 4.5p/kWh there will be an annual deficit of over £146 compared to the current scheme.

In additions installations will only receive payments for 20 years in line with other technologies supported by the Feed in Tariff scheme.  Over a lifetime of the scheme this will reduce payments by 20%, which based on current energy prices and annual FiT payments equates to just under £8000.

If you are interested in a solar PV system contact us today on 0191 2952900.

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