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
Introduction
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)
| FIT Rates | Total annual earnings and savings with a 2.9kW system | Simple payback (years) |
| Current 43.3p/kWh | £1,190 | 10 |
| Proposed 21p/kWh | £ 640 | 18 |
- 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)
