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DECC has announced a reduction to feed in tariffs
- 31 October 2011
The DECC has now announced that there will be a reduction to Feed In Tariffs. The press release and also the consultation document can be viewed through a link below. This was prceded by a leak in the Financial Times on Wednesday 26th October 2011, plus there was an administrative error whereby the EST had carried out a fact sheet on the proposed changes to Solar PV Feed in Tariffs rates for a brief period on Friday 28th October 2011, the proposals are summarised in a table below. Obviously, this rapid analysis is no substitue for reading the full document.
The analysis
In an attempt to avoid the situation that the industry faces today, the REA and STA had already called for cuts in tariffs across all scales of project, of 25%, as without action there was a very real danger that the budget would be exceeded.
|
Market segment |
Likely impact |
|
Domestic own-funded installations |
The market will slow |
|
“Free” domestic |
The market will cease |
|
New build domestic |
The market will continue to be driven by planning policy (Merton Rule, Zero Carbon Homes agenda etc.) |
|
Social housing |
We don’t want to comment yet, more time is needed for us to analyse this. |
|
Commercial roofs |
The market for over 50kw had already slowed, those under 50kW will now slow. |
|
“Free” commercial |
The market will cease |
|
RO projects |
Large scale projects in the most favourable locations may start to appear in the next year or so. |
The Summary of proposals
The propsed rates are as follows in this table
|
Band (kW) |
Current generation tariff (p/kWh) |
Proposed generation tariff (p/kWh) |
|
•4kW (new build) |
37.8 |
21.0 |
|
•4kW (retrofit) |
43.3 |
21.0 |
|
>4-10kW |
37.8 |
16.8 |
|
>10-50kW |
32.9 |
15.2 |
|
>50-100kW |
19 |
12.9 |
|
>100-150kW |
19 |
12.9 |
|
>150-250kW |
15 |
12.9 |
|
>250kW-5MW |
8.5 |
8.5* |
|
stand alone |
8.5 |
8.5* |
It will be a (almost) 8 week consultation, with a deadline of 23rd December
- Stations commissioning before 12th December get existing tariffs for the 25 year duration.
- Stations commissioning after 12th Dec but before 1st April get existing tariffs at first, but then go down to the lower tariffs from 1st April.
- Commissioning after 1st April get the new rates.
There will also be new energy efficiency requirements, from 1st April 2012 each domestic installation must be accompanied by a Energy Performance Certificate (EPC) with a level C or above, which has completed all "Green Deal" measures. If a domestic property does not meet these energy efficiency requirements, the Solar PV installation may recieve a lower tariff (9p/kWh is suggested)
There is also a question on new tariffs for aggregated schemes.
Clearly it is an unusual step to have a reference date occurring before the deadline sua may giat for the consultation. DECC’s objective here is to limit spending at the higher tariff rates by as much as possible.
Follow this link to find out more information about Feed-In-Tariff schem and Free on Roof Domestic changes:
http://www.decc.gov.uk/en/content/cms/news/gb_fits/gb_fits.aspx
