Solar certainty: DECC confirms future FiT rates

After Solar Power Portal this morning reported confirmation of the new feed-in tariff rates, the Department of Energy and Climate Change (DECC) has published a ministerial statement confirming the new feed-in tariff rates for solar photovoltaics installations completed between December 12 and April 1, 2012. In a bid to provide certainty to the somewhat frustrated industry, Government has set out its ‘Plan B’ feed-in tariff proposal in the event that it loses its current court appeal.

On October 31 last year Government outlined its intention to cut feed-in tariff rates from April 1, 2012, but with a cut-off date of December 12, 2011. This reference date has since been challenged by a judicial review, to which the Government has responded with an appeal of the decision of the High Court, which has yet to be granted.

The furore surrounding this court case has caused a lot of uncertainty in the UK solar market, with many pulling out in fear of what the future holds, with others are simply frozen until a decision is made either way.

Today, after calls from industry to bring some clarity to the situation, DECC is laying before Parliament some draft licence modifications which, subject to the Parliamentary process set out in the Energy Act 2008,  make provision for a the new rates to go through from April 1, 2012 with an eligibility date on or after 3 March.

“We continue to stand by our original proposal. However, I know that the uncertainty while we await the Court’s decision is difficult for the industry. A retention of the 43p tariff could also create substantial risks to the FiTs budget if our appeal is unsuccessful. For these reasons, we believe it is prudent to bring forward our decision on one aspect of the consultation: the proposals for new solar PV tariffs,” said Secretary of State, Chris Huhne.

Alternatively, if DECC wins the appeal, it plans to go ahead with the original proposal to enforce cuts from December 12.

“It is very important that we reserve this as an option because these 43p payments will take a disproportionate share of the budget available for small-scale low-carbon technologies. We want instead to maximise the number of installations that are possible within the available budget rather than use available subsidy to pay a higher tariff to a smaller number of installations,” continued Huhne.

After speaking with DECC this morning about this news, Solar Power Portal also heard from Greg Barker, the Energy and Climate Change Minister, who said, “I know this is a difficult time for the sector and I want to do as much as I can to end the current uncertainty created by the legal challenge.

“We must reduce the level of FiTs for solar panels as quickly as possible, to protect consumer bills and to avoid bust in the whole feed-in tariffs budget. We’re appealing against the court ruling that’s challenged our proposal for a December reference date.  This remains our aim, and we are waiting for the judgment of the Court of Appeal. But this is too important for us to sit and do nothing while we wait. Today we’re putting in place a contingency that will bring a 21p rate into effect from April for installations from 3 March.

“However, we are still pressing ahead with our appeal and if successful, we retain the option of introducing a December reference date. In the circumstances we believe this gives the industry as much certainty as is possible. And it puts us in a better position to protect the budget for everyone involved,” he concluded.

The first phase of the FiTs consultation closed on December 23 last year and received more than 2,000 consultation responses. DECC intends to announce the outcome of this consultation by February 9, in time for any resulting legislative changes to come into effect from 1 April 2012.

Our aim is that this announcement will be accompanied by a set of reform proposals for the next phase of the comprehensive review of the FITs scheme, which will be the subject of a further consultation.

The new generation tariffs set out in the draft licence modifications being laid today are set out in the table below and would apply for all installations with an eligibility date on or after March 3, 2012.

Band (kW Declared Net Capacity (DNC)

Current generation tariff (p/kWh) 

New generation tariff from 1 April 2012 (p/kWh)

≤4kW (new build)



≤4kW (retrofit) 





















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