Changes to the government’s Feed-in Tariff (FIT) scheme, which provides cash-back for every kilowatt hour (kWh) of energy produced by renewable technology like solar PV panels, have now been announced. These changes involve decreasing the current tariff rate for new customers and requiring that homes meet set levels of energy efficiency to be eligible for the scheme.
Currently, the FIT rate for homeowners with solar PV installations up to 4 kilowatt (kW) in size sits at 42.3p per kWh, which produces earnings of around £1,190 per year. From the 1st April, all solar PV systems with an eligibility date on or after 3rd March 2012 will receive a 21p per kWh rate instead, making around £640 a year on average.
From April 1st, new applicants will also need to submit an Energy Performance Certificate to prove their home is rated D or above in terms of energy efficiency. Currently, around 51% of buildings fall into this category and will therefore be eligible for the FIT scheme.
Another key change, which won’t affect normal domestic installers, is the introduction of a multi-installation tariff, which means anyone who installs 25 or more solar PV installations located on different sites will receive only 80% of the standard tariff rate.
Climate Change Minister Greg Barker says: “Our new plans will see almost two and a half times more installations than originally projected by 2015 which is good news for the sustainable growth of the industry. We are proposing a more predictable and transparent scheme as the costs of technologies fall, ensuring a long term, predictable rate of return that will closely track changes in prices and deployment.”
Last year the government caused controversy by trying to slash FIT rates before the proposed review date; a court subsequently ruled this action would be illegal and rates stayed the same. However, the government are again trying to appeal this decision. Until the outcome of this appeal has been reached, tariff rates for solar installations with an eligibility date of between 12th December and 3rd March cannot be confirmed.