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FITs: consultation on solar PV

PLEASE NOTE: Information in this article is correct at the time of publication, please contact DFA Law for current advice on older articles.

On 24 May 2012, the Department of Energy and Climate Change (DECC) published the government response to the consultation on Phase 2A of the Comprehensive Review of feed-in tariffs (FITs), which covers solar photovoltaics (PV) cost control. The key decisions are:

  • A delay of one month, until 1 August 2012, in introducing further generation tariff cuts.
  • A new degression cost control mechanism from 1 November 2012, which will cut tariffs regularly according to solar PV deployment in three bands.
  • Multi-installation tariff for organisations with more than 25 installations is set at 90% of the standard generation tariff.
  • The export tariff is increased from 3.2p to 4.5p/kWh to reflect the real value of electricity exported to the grid better.
  • The lifetime of solar PV FITs will be cut from 25 years to 20 years.
  • Tariffs will continue to be linked to the Retail Prices Index (RPI).

The solar industry generally welcomed the changes to the consultation proposals and the degree of certainty that the degression mechanism will give.

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