Is the Feed-In Tariff affected by inflation?
Feed-In Tariffs are index linked to the Retail Prices Index (RPI), which means the tariff is subject to inflation.
Each year the set level of the tariff, both the generation and export, will be adjusted pro-rata to the Retail Prices Index.
The updated tariff levels will be published by the tariff administrators, who are responsible for overseeing the whole scheme and maintaining the register of eligible systems and the tariffs paid to them.
Retail Prices Index explained
The Retail Prices Index (RPI) is a general purpose domestic measure of inflation in the UK. It provides information about indices, percentage changes, weights, average prices and historical data.
The uses of the RPI include the adjustment of index-linked gilts, which is where the Feed-In Tariff comes in as this insures the tariff coincides each year with the rate of inflation.
Basically, if the inflation rate increases or drops then so will the tariff.