The Feed-in Tariff – How it Stands Now
On March 23rd the Supreme Court returned a verdict on whether it would allow the government to appeal the decision of the High Court concerning its deadline of December 12th for the new tariff rate of 21p per kWh.
The court rejected the government’s position and so consequently all those people who installed their solar PV systems after December 12th and before March 3rd will continue to receive the higher rate of 43p per kWh. Meanwhile, the new, lower, rate will apply from 1st April.
In addition to the new rate there are changes to the eligibility criteria for the feed-in tariffs (FiTS) with regard to household energy efficiency. Essentially, in order for householders to be eligible for the new rate, they have to ensure that their Energy Performance Certificate (EPC) is upgraded to Level D.
The installation of a solar PV system may count towards such an upgrade but if it is a ground mounted array or a system mounted on an outbuilding, the main dwelling in receipt of the generated energy still has achieve Level D on its EPC. Any householder whose EPC falls below Level D will only be able to claim 9p per kWh instead of the new standard rate.
Finally there is also a ‘multi-installation’ tariff which is set at a level of 80% of the standard rate. This applies to anyone who has installed 25 or more installations, the rate being reflective of economies of scale which multiple installations enjoy.
The government is continuing to consult on various issues and may make a further cut in the tariff rate in future years in accordance with market trends and the future uptake of solar PV. It is also looking at the situation with regard to social housing and community solar PV schemes.
The resolution of the legal wrangle over FiTS has meant there is much more confidence in the industry at present. Indeed, some are predicting that alongside an expected period of growth over the next few years, conditions could favour the appearance of large solar farms such as those found on the European continent. Such expectation has been encouraged by the Renewables Obligation Scheme (ROCS) which does not limit the size of such plants providing they remain under 5 MW.
In order to maintain confidence in the solar industry, the news gathering site Comtex has pointed out that 21p per kWh for domestic solar PV is still generous in comparison to lower European rates and that the government is aiming at managing FiTS in order to preserve a general return on investment of around 5%.