Energy blog

Significant reductions in Solar PV Feed In Tariffs

Published by geoffbrickell on 03 November 2011

What started last week as rumour and mistaken early announcements, is now official with a press notice issued by DECC on 31st October that the Feed In Tariff for Solar PV is being significantly reduced.

The DECC announcement which you can read here says it is a Phase 1 review with a consultation that will go on until 23 December - but it is pretty clear that the new regime has been decided, with a reduction in the 4kW or less FIT from £0.433/kWh to just £0.21. The biggest shock however is that under the proposals, the new tariffs would apply to all new Solar PV installations with an eligibility date on or after 12 December 2011.

This means that anyone who has not fully installed Solar PV by 11th December will now have a significantly longer pay-back period.

The reduction in tariff - as reported in an earlier blog post - was expected by everyone to be effective from next April, although I did suggest that there was a "small risk that an emergency reduction could be implemented sooner ". However I don't think anyone expected the reduction to be so large, i.e. greater than 50%, and to be introduced so quickly.

We will have to wait to see if the consultation does modify any of the new arrangements and we will post updates here as the situation becomes clearer.