Government delays next wave of solar PV FIT cuts to August 1

May 24, 2012

Climate Change Minister Greg Barker has today confirmed the next wave of cuts
to solar feed-in tariff incentives will come into effect from August 1, cutting
payments for small scale installations from 21p/kWh to 16p/kWh.

In a statement in the House of Commons accompanied by the release of the government’s response to its most recent consultation on the
feed-in tariff incentive scheme, Barker said the government had finalised
reforms to the scheme that would provide the industry with “TLC: transparency,
longevity, and certainty”.

He also underlined the government’s long term commitment to the sector,
confirming that solar technologies will be added to the UK’s Renewables Roadmap,
announcing the formation of a dedicated PV Cost Reduction Task Force, committing
to the development of a new Solar Enterprise Strategy, and trailing the launch
of a new solar technology centre in Cornwall.

The confirmed cuts are at the lower end of the range originally proposed by
ministers and will mean that incentives for installations with under 4kW of
capacity will fall by around 24 per cent. However, the period for which
businesses and households will receive payments from the feed-in tariff has been
reduced from 25 to 20 years.

Cuts to larger scale installations were also at the lower end of those
proposed by ministers in the consultation in February, with the Department of
Energy and Climate Change (DECC) confirming that 10-50kW installations will
receive 13.5p/kWh, 50-150kW sites will get 11.5p/kWh, and 150-250kW will receive
11p/kWh.

In addition, the rules regarding multiple installations such as social
housing projects have been relaxed so that they will receive 90 per cent of the
standard tariff rate as opposed to the 80 per cent originally proposed.

Moreover, the export tariff for installations exporting energy to the grid
will be increased from 3.2p/kWh to 4.5p/kWh.

Significantly, Barker also announced a new mechanism for reducing feed-in
tariff that gives the government an option to cut the tariff every three months
from November, based on the level of deployment in the preceeding months.