From 1st April to 1st July the feed-in Tariff generation rate will be 21p/kWh for domestic size solar panel installations with an eligibility date on or after 3rd March.
It’s also been confirmed that energy efficiency criteria is going to become a condition for receiving the full FIT rate. From 1st April full solar pv FIT can only be claimed on sites meeting an Energy Performance Certificate level D. Previously, DECC were considering an EPC level C, which would have meant that just 9% of the UK housing would have qualified.
Another decision came on multi-installation rates. Significantly for community and social housing schemes, multi-installation rates will be 80% of actual tariff from 1st April and this rate will apply to those with 25 or more sites. There are still some question marks around what exactly qualifies as ‘community’ scheme; these will hopefully be addressed in the coming consultation.
Both the EPC rating and multi-installation were areas that we have been campaigning on so it’s great to see the government have recognised some of these concerns. Commenting on the announcement, Good Energy CEO Juliet Davenport said,
"It's good that the government has listened on the level of the proposed energy efficiency standard and tariffs for community sites with multiple installations, such as social housing. Good Energy's research shows that micro-generation actually encourages people to improve the energy performance of their home, so these changes will allow a greater number of people to benefit from that."
Looking to the future of FIT, DECC have once again put forward a lot of proposals for consultation. Fundamental to their plan is a mechanism for lowering the FIT incentives by 10% every six months, in line with the reduction in the cost of pv technology. The structure is aimed at protecting the scheme's budget and creating long term certainty for consumers and investors about what the FIT rates will be. We think that overall this is a step forward. The industry was in desperate need of more clarity and the government has moved to provide that. As Juliet Davenport said,
"The rate changes proposed for solar pv are a reflection of the well-known problems with the FIT budget and it will take time to fully digest what they mean. The important thing is we now know how tariffs are going to change in future, helping give investors greater certainty.’
Finally, DECC also announced proposed tariffs for other technologies such as wind and hydro, to apply from 1st October. We expect these rates to be confirmed in the summer.
The Feed-in Tariff is the best tool we have for delivering the kind of decentralised energy system we need in this country to tackle the energy challenges we face. Today’s announcement is encouraging in that the government have set out to provide a long-term ambition for FIT. Once again, only time will tell if they have managed to get the scheme back on track.