Feed-in Tariff Update

On October 31st 2011 the UK government announced a review of the feed-in tariffs (FiTs) scheme introduced on 1 April 2010. Payments under the scheme are set to be reduced as of December 12 2011. Additionally, from April 2012, only properties that meet minimum energy efficiency standards will qualify for the FiT, tying the scheme into the Government’s ‘Green Deal’ initiative which is intended to encourage homeowners to invest in energy saving home improvements.

Homeowers who have photovoltaic (PV) panels retrofitted by an approved installer before December 12 2011 remain eligible for the higher tariff rate of 43.3p/kWh (for panels fitted on a new build the rate is 37.8p/kWh). Installations on or after that date will get the reduced tariff rate of 21p/kWh. Other microgeneration technologies in the FiT scheme are set to have a review of their tariffs in the new year. 

Although the generation tariff will reduce by more than 50%, and will decline further for new installations in the future, once in place FiT payments are guaranteed for 25 years and increase with inflation through a link to the Retail Price Index (RPI). The increase on April 1st 2011 was 4.8%.

Those who invest in microgeneration technology will still benefit from reduced fuel bills, and from the export tariff paid by their electricity supplier for excess electricity generated which is sold back into the grid.

The change in the tariff will weaken the economic argument for investing in microgeneration. However, the cost of some installations, on particular PV is falling and likely to continue to do so, as there is an oversupply of PV units and more competition in the sector.

To calculate the potential value of the FiT for your home visit www.solarjuice.com. To find out more information on microgeneration visit The Energy Saving Trust www.energysavingtrust.org.uk