Breaking News – Feed-in Tariff Changes Confirmed

After weeks of uncertainty the Department of Energy and Climate Change (DECC) have today announced the results of the consultation on Solar Feed-in tariffs. Here’s a brief overview of the changes which will come into effect from 1st August 2012:

  • Generation  Tariff for systems up to 4kWp will be 16p / kWh (currently 21p).  See table below for other rates.
  • Export Tariff will increase from 3.1p / kWh to 4.5p / kWh
  • Feed-in Tariffs will now be guaranteed for 20 years rather than the current 25 years.
  • Tariffs will still be index linked to RPI
  • Future Tariff reductions will be quarterly at a rate of 3.5% and will be linked to deployment i.e. if the market slows beyond certain thresholds, reductions may be delayed.

Greg Barker in his statement to Parliament said: “I want to send a very clear message today. UK solar continues to be an attractive proposition for many consumers considering microgeneration technologies and that having placed the subsidy support for this technology on a long-term, sustainable footing, industry can plan for growth with confidence.”

The new tariffs will deliver a return on investment of around 6% for domestic/small commercial installations and up to 8% for larger systems which is in line with how the scheme was initially set up in April 2010. 

So it’s good news for the Solar industry in that we finally have clarity and a subsidy scheme that we can work with for the long term.

Band (kW) Standard generation tariff (p/kWh) Multi-installation tariff (p/kWh) Lower tariff (if energy efficiency requirement not met) (p/kWh)
•4kW (new build) 16.0 14.4 7.1
•4kW (retrofit) 16.0 14.4 7.1
>4-10kW 14.5 13.05 7.1
>10-50kW 13.5 12.15 7.1
>50-100kW 11.5 10.35 7.1