Photovoltaics in UK: new FIT cuts from August 2012

04/06/2012 - New cuts from August 1, 2012, for the feed-in-tariffs that aimed to incentive the development of solar energy in UK.

For a second time this year, the U.K. government has revealed a new photovoltaic feed-in tariff (FIT) scheme, aimed at establishing a more "predictable, certain and sustainable" industry.

Under the changes, a new 16 pence (p) FIT will be introduced from August 1. According to STA (Society of Technical Analysts), there are now provisions to install 800 MWp to one GWp annually.

Under the changes, scheduled to come into effect on August 1, 2012, small domestic solar installations (between 0 and 10 kWp) will receive 16p per kilowatt hour, down from 21p.

Moreover, all tariffs will decrease on a three month basis, starting on October 1, 2012. A reduction of 3.5% will be made, unless "rapid uptake occurs". In this instance, reductions of up to 28% could be made. On the other hand, should uptake be low, tariff cuts will be "skipped" for up to two quarters. The monthly digression will depend on which band the installation falls into: domestic (0 to 10 kWp); small commercial (10 to 50 kWp); or large commercial (above 50 kWp and standalone installations).

"All tariffs will continue to be index-linked in line with the Retail Price Index (RPI) and the export tariff will be increased from 3.2p to 4.5p" said DECC in a statement released. The new tariffs are expected to reap a return on investment of between 6 and 8%.

In addition to the lower tariffs, other changes include:

  • The multi-installation tariff – for organizations with over 25 installations – will receive 90% of the standard applicable tariff, up from 80%;
  • The export tariff will be increased from 3.2p to 4.5p/kWh for those installations with an eligibility date on or after August 1, 2012; 
  • The FIT lifetime will be reduced from 25 to 20 years for those installations with an eligibility date on or after August 1, 2012;
  • Tariffs for installations that do not meet the energy efficiency requirements will mirror the tariffs for standalone installations.

More details and information on the Department of Energy & Climate Change site.


Source: PV Magazine

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