Summary of DECC’s proposed changes to the solar FiT

Last week DECC announced a raft of measures intended to improve the feed-in tariff framework and secure the long-term future of the scheme.

Below is a summary of all the changes announced last week that will directly affect the solar feed-in tariff rate and the manner it operates.

EPC requirement level D

In order to receive the full FiT value, properties must hold a level D Energy Performance Certificate (EPC) from April 1, 2012.

Following the announcement, some installers have contacted SPP to find out whether or not the solar installation will contribute to bringing the property up to EPC level D.

A DECC spokeswoman told SPP: “A generator must be able to demonstrate as part of their application for FiTs that the building to which the solar PV installation is attached or wired to provide electricity is rated at EPC level D or above. The FiTs requirement doesn’t prescribe how level D should be met.”

DECC clarified that people who want to use solar PV towards obtaining an EPC rating of D would need to “have the solar panel system installed, conduct an EPC and then apply for the FiTs scheme. The EPC must be sent with the documentation relating to registration for FiTs.”

Tariff rates

The tariff rates are exactly as DECC confirmed on January 19, as laid out below:

*Due to the ongoing legal dispute, the tariff rate for the lifetime of solar PV systems cannot be guarenteed. However, 43.3p will be paid for all systems registered between December 12-March 3 until April 1, regardless of the appeal.

The tariff level is then set to change in July. The tariff rate from July 1 will depend on the level of capacity installed during March and April. The new tariff options are outlined in the table below:

A further five percent reduction on the July level of tariff will be enacted in October, with 10 percent reductions being introduced every six months thereafter. The automatic baseline transgression of 10 percent every six months can be triggered early if deployment exceeds pre-determined levels. The system will be reviewed annually to ensure that it is performing well against its objectives.

Multi-installation tariff

Anyone who owns or receives FiT payments from 25 or more solar installations will be subject to a new multi-installation tariff. The tariff will be set at 80 percent of the standard tariff, to reflect the lower costs that such installations benefit from. However, DECC is consulting on a proposal that would allow social housing, community projects and distributed energy schemes to be exempt from the reduced multi-installation tariff rates.

Tariff lifetime reduction

The lifetime of the solar PV feed-in tariff is set to be reduced from 25 years to 20 years, to bring it back in-line with other FiT technologies. DECC maintain that a reduction in the tariff lifetime will allow potential users of the scheme to better compare technologies.

Inflation linking

DECC are consulting on whether the current RPI inflation linking should be removed or changed to the consumer price index (CPI). DECC argue that the current model does not reflect the actual investor behaviour being seen in the FiT market, as technologies tend to be capital intensive with costs loaded towards the start of the project with low ongoing operational costs.

Consultation response

DECC’s full response to the phase 1 consultation, ‘Phase 2A’ consultation on cost control measures for PV and ‘Phase 2B’ on all other FiT technologies can be read here. DECC requires responses to Phase 2A to be submitted by April 3. Responses to ‘Phase 2B’ need to be submitted by March 23.