As of 8 February 2016, domestic solar installations up to 10kW will receive 4.39p/kWh, based upon offering a return of 4.8%, under the Feed-in Tariff (FiT).
The new rates are as follows:
More than 1MW: 0.87p/kWh*
Stand alone: 0.87p/kW
Due to Christmas recess, the changes will not come into effect until 8 February 2016.
DECC has also announced that it will introduce a four-week pause on new FiT installations (15 January - 8 February 2016) in order to protect the new budget. Any installations made in this time will receive the new rate of 4.39p. The new rate will run from 8 February to 31 March, after which degressions will begin to occur.
The Government also detailed its roll out of deployment caps, stating that it considers these to be an effective method of cost control and that a total spend of £100 million per year from April 2019 to be an “appropriate” allocation.
A queuing system will be introduced, which means that if a particular cap is reached then all new installations will be placed in a queue for when the next cap opens. There is no guarantee that these installations will received FiT payments until they are registered under the following cap, nor is there a guarantee on which the rate they will receive.
There is however a “rollover” clause which means that any unused capacity from a particular deployment cap will be added on top of the next quarter. Clause 1.42 of the response also includes mention of a “budget reconciliation” which could open the door for a possible revisit of the rates on offer should deployment nose dive and it appear that the £100 million budget would not be utilised in full.
Although the announcement is not positive news for the solar industry, the tariff cuts are lower than previous forecasts. The consultation which ran from August till October, set out to cut the rates by as much as 87% and to ultimately withdraw subsidy support from January 2019.
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This article has been adapted from an article published by Solar Power Portal.