Yesterday the government released a new consultation on the Feed in Tariff (FIT). The consultation makes clear its intent to support the industry and the future of renewable technologies whilst at the same time ensuring that the limited available financial incentives are deployed reasonably and fairly.
An overview of the proposals are as follows:
- A tariff of 21p/kWh will take effect from 1st April this year for domestic-size solar panels with an eligibility date on or after 3rd March 2012. The tariff is scheduled to reduce further in July 2012 (with several options put forward that build in a 2 month warning for the industry before changes are implemented)
- Properties installing solar panels will from 1st April have to have an Energy performance rating of D (they have bowed to industry pressure to lower it from C)
- Those properties that do not meet this energy efficiency requirement will receive a lower tariff level, starting at 8.9% in April 2012
- There will be a new ‘multi installation’ tariff to take into account the economies of scale achieved where there are more than 25 installations which will be 80% of the tariff applied to the individual solar PV installations
- The Government is proposing that ‘community-owned’ installations, such as those installed by social housing landlords, may be treated differently to commercial operators. The Government is seeking opinion on how community-owned installations are to be defined, and what fair and sustainable tariff rates may be applied
- The subsidy levels will be tied to falling costs (with suggested changes every 6 months to reflect falling prices, again with a warning system for the industry)
- The period of time that the tariff payments will be paid to be reduced from 25 years to 20 years
- DECC will appeal the High Court ruling – its case has to be lodged by February 21st
- The consultation closes on 3rd April
Because of the pending Supreme Court appeal, it is till unknown what rate any installations between 12th December 2011 and 2nd March 2012 will generate. Whilst the High Court ruling should mean that installs in this period would attract the higher 43.3p rate, the advice from REAL and the Energy Savings Trust is to use the 21p rate in preparing calculations.
If you want to read DECC’s press release and the consultation documents, they can be found at the DECC web site.