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DECC publishes response to FIT review

Posted: 18 December, 2015. Written by Mark

The Government has announced its decision following its review of the Feed-In Tariff (FiT) scheme. From 8 February 2016 the solar PV FiT rate will drop to 4.39p/kWh for the sub-10kWp band. By this time the Government estimates that the Regulations will have been adopted in Parliament. Even though this represents a sizeable reduction over and above the current tariff it is a considerable improvement on some of the proposals mooted in the Government’s consultation document.

The new FiT rate, although challenging, should allow our members to continue to offer solar PV to domestic consumers so long as the up-front cost is reasonable. This comes hard on the heels of the Government’s announcement that it will continue to fund the Renewable Heat Incentive (RHI).

Members should be aware, however, that the Government has added some important limiting factors to the tariff rates. They are as follows:

• Quarterly degression. This will have two components. Firstly there will be a ‘default’ degression each quarter in line with the figures set out in Table 8 in the Government’s response. Secondly there will be ‘contingent’ degression of 10% if the tight quarterly deployment caps are met. These are set out in Tables 10 and 11 in the Government’s response. If the capacity cap in any one quarter (expressed in MW terms) is reached, deployment above the caps will be prevented and a queuing system operate for places above the cap, for deployment in the following quarter. This will operate on a first come first served basis, with time and date stamping of applications to Ofgem determining the order of the queue.

• A ‘pause’ in the scheme from 15 January 2016 to 8 February 2016. Consumers will not be entitled to the current solar PV FiT rate of 12.03p/kWh for installations if their application for FiT registration is received by their electricity supplier (FiT Licensee) after 14 January 2016.

• A change to the requirement for an EPC level D. This will have to be met before the installation takes place and the solar PV panels will not be able to contribute to this rating.

You can access the full consultation response here.

Ofgem has published draft guidance which you can access here.