Government Cuts Solar PV Tariff to 4.39p/kWh From January 15th

The Government has announced cuts to the Feed in Tariff across all bands from 2016. Domestic installations up to 10kW in capacity will be reduced to 4.39p/kWh. Although this is a significant reduction on the current rate of 12.47p/kWh for domestic installations, it is also considerably better than the 1.63p that the government had been proposing.

The new rates cannot come in until the 8th of February but DECC will also enact a 4 week pause in the scheme. The pause will run from 15 January to 8 February 2016 and installations between those dates will not be eligible for the old rates. To qualify for FiT at the existing levels and avoid the cuts, installations will need to be completed and applications received before January 15th 2016. That doesn’t leave a lot of time for either consumers or already rushed installers.

The solar Feed in Tariff will fall from 12.47p/kWh to 12.03p/kWh from January 1st as part of the normal degression built into the scheme. For applications not received before January 15th however, the new rates will apply. There are also a number of other changes outlined by DECC including new degression rules going forward and an overall spending CAP for the scheme.

Installed Capacity Consultation Tariffs New Tariffs (Jan 2016)
<10kW 1.63 4.39
10 – 50kW 3.69 4.59
50 – 250kW 2.64 2.70
250-1000kW 2.28 2.27
> 1000kW 1.03 0.87
Stand alone 1.03 0.87

According to DECC and the Government’s final response to the consultation, the new scheme targets a 4.8% rate of return for solar. We’ll have to see how that holds up in the coming months.

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