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Feed-In Tariffs

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Feed-in tariffs (otherwise “The Clean Energy Cashback Scheme”) for electricity generated from solar PV installations are under review. The Department of Energy and Climate change has launched a consultation on the first phase of the review. The 8 week consultation period ends on 23rd December. The proposals under consultation would see new, substantially lower, FITs for smaller installations – down to 21p p/kWh for installations up to 4kW. On the assumption that the new rates are implemented they will apply to all new installations with an eligibility date on or after 12th December 2011. The details of the proposed tariffs are publishes on the DECC website.

The take up of PV has accelerated rapidly resulting in higher costs that anticipated. The cost of installations has reduced – by at least 30% according to the DECC – so the returns on investment have been higher than envisaged. There are also proposals for prioritising energy efficiency by linking PV tariffs to minimum energy efficiency requirements from 1st April 2012.

These proposals are the first phase of a wider review of tariff levels, eligible technologies, administrative and regulatory arrangements and other aspects of the FIT scheme.

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