DECC is proposing to slash the Feed-in Tariff for microgeneration technologies by as much as 87 percent, as part of its long-running review of the scheme.
Now subject to an eight week consultation, the domestic 0-10kW solar PV tariff could be cut to just 1.63p/kWh from its current rate of 12.9p from 01 January, if the changes get the go ahead.
According to DECC, these drastic moves are needed to avoid an imminent breach of the Levy Control Framework, which limits the amount of money pegged on to consumer energy bills to fund low carbon generation.
The government also views that the objectives have, or will shortly have, been met by FiTs years ahead of schedule as deployment continues to exceed initial expectations. 680,000 PV installations are now supported by the tariff.
However, DECC’s own impact assessment accepts that proposed changes to tariffs and degression could cut deployment by as much as 6GW by 2020.
Other proposals include:
-The forced degression of tariff rates each quarter
-Changing the minimum EPC requirement from D to C
-A move from RPI-linked indexing to CPI
-Phased closure by 2018/19
-Overall FiT expenditure capped at £75m-£100m from Jan 2016 – Mar 2019
-If exceeded, the scheme could be closed to new applicants from as early as January 2016
DECC has stressed that no existing installations will be affected in anyway by these proposals.
The full consultation document, and details of how to respond with your feedback by October 23, can be accessed by clicking here.
Full industry reaction to follow