Government confirms 16p FiT from August 1

The Department of Energy and Climate Change (DECC) has today announced the long-awaited changes to the Feed-in Tariff.

The tariff for domestic PV installations will be 16p/kWh from August 01, down from 21p, and be reviewed at three month intervals thereafter.

DECC says that the new tariff should typically yield return on investments of over 6 per cent for well-sited arrays and up to 8 per cent on larger installations. It expects average tariff reductions of 3.5 per cent every three months to reflect falling costs in technology but adds that reductions could be much bigger in the event of ‘rapid uptake’. There will also be the option of skipping planned reductions in the opposite circumstances, however, where uptake is low.

Climate change minister Greg Barker said: “Today starts a new and exciting chapter for the solar industry. The sector has been through a difficult time, adjusting to the reality of sharply falling costs, but the reforms we are introducing today provide a strong, sustainable foundation for growth for the solar sector.

“We can now look with confidence to a future for solar which will see it go from a small cottage industry, anticipated under the previous scheme, to playing a significant part in Britain’s clean energy economy.

“I want to send a very clear message today. UK solar continues to be an attractive proposition for many consumers considering microgeneration technologies and that having placed the subsidy support for this technology on a long-term, sustainable footing, industry can plan for growth with confidence.”

Other details include a multi-installation tariff set at 90 per cent of the stand-alone rate, an increased export tariff from 3.2p – 4.5p/kWh and a reduction in the scheme from 25 years to 20 years of guaranteed payments.

Decisions on Feed-in Tariff rates for non-PV technologies are expected to be announced in the next few months.