DECC announces new solar pv FITs

4.1MWp ground mounted solar pv farm in Derby (for British Gas)

The Department of Energy and Climate Change (DECC) has announced the new solar pv Feed-in Tariff rates, following the latest phase of consultation.

In a bid to re-establish consumer confidence and to generate attractive return on investing as initially intended, the new rate for 4kW systems will be set at 16p/kWh, aligned with existing installation figures.

The DECC has also confirmed that the new FiT rates will now apply from August 1, as expected, to encourage further demand, with the original deadline set as July 1. A consequence of declining installation prices – in excess of 50 percent reductions over the last 2 years – as well as decreased demand and reduced installations from approximately 71MW to 17MW each month, the delays were welcomed across the solar industry.

Despite a reduction from the original rates, the DECC expects that the new rates will boost investment in the solar market, aiming for installation figures to total 800MW over the next 18 months, as well as up to 1,000MWp each year to 2015, and a total of 22GW for 2020. In addition, larger schemes under ROCs could generate a further 300-600MWp of installations by April 2013.

As well as confirming the date for the new rates to take effect, Greg Barker, Minister of State, also announced additional changes to the current FiT scheme, including:

  • A less complex degression management model, including reduced quarterly degressions, which are linked to market deployment, as opposed to the current automatic degression
  • Uptake will be viewed in three different bands: domestic (0-10kW); small commercial (10-50kW); and large commercial (above 50kW and standalone installations). Reductions will be established within each bands and applied on a quarterly basis
  • New FiT rates will now be paid over 20 years, as opposed to the original 25 years
  • Return on investment is expected to be over 6 percent for conventional schemes, with up to 8 percent for the larger bands
  • Export tariffs will increase from 3.1p to 4.5p, boosting large scale solar pv investor income
  • Organisations with more than 25 solar pv installations will now receive 90 percent of the standard applicable tariff.

Mr Barker’s message was focused on building consumer confidence and reaffirming that solar is still a viable investment: “I want to send a very clear message today. UK solar continues to be an attractive proposition for many consumers considering microgeneration technologies and that having placed the subsidy support for this technology on a long-term, sustainable footing, industry can plan for growth with confidence.”

Meanwhile, the DECC has also published the long anticipated draft energy bill, which includes the  Electricity Market Reforms (EMR), aimed at helping the UK to decrease reliance on conventional fuel and work towards a low carbon economy. The EMR posed keeping the lights on, reducing consumer energy bills, and generating clean electricity to address climate change as the most significant issues it aims to tackle. The reforms are expected to provide investors with transparency, longevity and certainty, in the hope to attract around £110bn investment to the UK.

JPCS is the largest and most experienced UK based installer of domestic, commercial, and industrial solar pv ground mounting systems. With a portfolio of low-carbon energy projects contributing to a sustainable future, ranging from small photovoltaic solar array projects, right through to some of the UK’s largest commercial solar PV farms, JPCS is a leading provider of renewable energy services in UK for the private and public sectors, with tried and tested quality outcomes and exceptional service delivery. JPCS also delivers services in the highways and rail markets.