Energy Saving Trust FIT review fact sheet
Fact Sheet on the proposed changes to Solar PV Feed-in-Tariff rates
Last updated 26 October 2011
The UK Government is proposing to reduce Feed-in Tariffs (FITs) for new solar photovoltaic (PV) installations as part of their comprehensive review consultation. See www.decc.gov.uk/fits
If you install solar PV and your FITs application is received by your FIT supplier (also known as FIT Licensee) on or after 8 December 2011, you could be affected by the proposals.
Please note that these proposals are currently under consultation and are therefore not final.
However, we recommend customers should use the figures in the consultation if they are planning to install after 8 December 2011.
Only PV systems are covered by the UK Government’s current FITs consultation. Other FIT-eligible technologies will be considered as part of the second phase of the comprehensive review due to be published shortly.
Summary of proposals
The UK Government proposals which affect householders most are:
- A reduced rate of 21p/kWh for solar PV installations <4kW – tariffs will be introduced from 1 April 2012 and will affect all installations with an eligibility date on or after 8 December 2011. See definition of eligibility date below. This tariff rate is designed to provide householders with a rate of return of around 4%.
- New domestic energy efficiency requirements – from 1 April 2012, domestic installations must be accompanied by an Energy Performance Certificate (EPC) with a level C or above/which has completed all „Green Deal. measures. Where a domestic property does not meet these energy efficiency requirements, the Solar PV installation may receive a lower tariff.
The table below compares typical income and savings made for an average sized solar PV system in the UK along with simple payback period (cost divided by combined income and savings)
||Total annual earnings and savings with a 2.9kW system
||Simple payback (years)
- 2.9kWp system, install cost of £11,500
- Total earnings and savings include income from the generation tariff, export tariff on 50% of total generation and up to 25% of generation used on site.
- Simple payback will depend on capital cost so the simple payback periods may vary depending on quotes received. Cost of solar PV has come down significantly over the years so we would expect the simple payback period to come down gradually.
- Annual generation has been calculated as 853kWh/kWp using the Energy Saving Trust Solar Energy Calculator (see below) using the postcode SW1A 0AA (Westminster Palace)
To find out more about how this will be implemented, please download the full fact sheet:
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Feed-in Tariffs: Written Ministerial Statement by Gregory Barker, Minister of State
18 MARCH 2011
I am today announcing a consultation as part of the fast-track review of Feed-in Tariffs (FITs) for small scale low carbon electricity generation.
On 7 February, I announced the start of the first comprehensive review of the FITs scheme for small scale low carbon electricity generation which would:
- assess all aspects of the scheme including tariff levels, administration and eligibility of technologies;
- be completed by the end of the year, with tariffs remaining unchanged until April 2012 (unless the review reveals a need for greater urgency);
- fast-track consideration of large scale solar projects (over 50kW) with a view to making any resulting changes to tariffs as soon as practical, subject to consultation and Parliamentary scrutiny as required by the Energy Act 2008; and
- alongside the fast track review of large scale solar PV, undertake a short study into the take-up of FITs for farm based Anaerobic Digestion plants.
The document published today deals with the last two of these points, and seeks views on proposals to changes tariffs for solar photovoltaic (PV) installations larger that 50 kilowatts and farm scale anaerobic digestion (AD) of up to 500 kilowatts. The proposed new bands and tariffs are as follows:
For large PV installations:
- >50kW – ≤150kW: 19p/kWh
- >150kW – ≤250kW: 15p/kWh
- >250kW – ≤5MW: 8.5p/kWh
And for farm scale AD installations:
- ≤250kW: 14p/kWh
- >250 – ≤500kW: 13p/kWh
The FITs scheme has been a success since its launch in April 2010 with over 27,000 FITs installations registered to date, of which 92% are domestic-scale solar PV generators, which are not affected by the proposed changes in the fast track review. The FITs scheme rewards generators for the green electricity they produce, use and sell back to the grid. We want to protect the diversity of the FITs scheme, and ensure that it benefits homes, small businesses and communities, and the full range of innovative technologies.
In these financially challenging times, it is even more important that we get the balance of the scheme right. The projections for take up of FITs published by the previous government failed to anticipate any large or small scale non-domestic solar PV installations until 2013. These projections have clearly proved to be flawed. Current market indications are that a rapid increase in the number of larger solar installations entering the scheme could distort funding for smaller and domestic scale installations as well as other technologies. Conversely the current tariff levels have failed to spur a meaningful uptake for anaerobic digestion which means that this technology is not fulfilling its potential contribution to our energy mix.
Decentralised renewables are a vital part of green growth and the FITs scheme has proved highly successful at stimulating growth, driving innovation, creating jobs and cutting carbon. We must act now to ensure that the scheme continues to deliver and we are able to achieve both our Spending Review commitment to improving the efficiency of the scheme, which will deliver £40million of savings (around 10%) in 2014/15, as well as ensuring that the benefits of a faster fall in technology costs are shared as widely as possible rather than captured in higher returns for a small number of individual investors.
We are seeking views on proposed tariffs until 6 May 2011. The Government will not act retrospectively and any changes to generation tariffs implemented as a result of the review will only affect new entrants into the FITs scheme. Installations which are already accredited for FITs at the time will not be affected. We propose that these changes take effect from 1 August 2011, subject to the outcome of this consultation and Parliamentary scrutiny.
We are also seeking views on the scope of the comprehensive review by 12 April 2011.
The consultation document can be accessed on the FITs Consultation page of the DECC website