UK FIT cuts to take effect from August

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Under the changes, scheduled to come into effect on August 1, small domestic solar installations (between 0 and 10 kW) will receive 16p per kilowatt hour, down from 21p.

Furthermore, all tariffs will decrease on a three month basis, starting on October 1. A reduction of 3.5 percent will be made, unless "rapid uptake occurs". In this instance, reductions of up to 28 percent could be made. On the other hand, should uptake be low, tariff cuts will be "skipped" for up to two quarters. The monthly degression will depend on which band the installation falls into: domestic (0 to 10 kW); small commercial (10 to 50 kW); or large commercial (above 50 kW and standalone installations).

"All tariffs will continue to be index-linked in line with the Retail Price Index (RPI) and the export tariff will be increased from 3.2p to 4.5p," said DECC in a statement released. It added that the new tariffs are expected to reap a return on investment of between six and eight percent.

Barker commented, "We can now look with confidence to a future for solar which will see it go from a small cottage industry, anticipated under the previous scheme, to playing a significant part in Britain’s clean energy economy."

In addition to the lower tariffs, other changes include:

  • The multi-installation tariff – for organizations with over 25 installations – will receive 90 percent of the standard applicable tariff, up from 80 percent;
  • The export tariff will be increased from 3.2p to 4.5p/kWh for those installations with an eligibility date on or after August 1;
  • The FIT lifetime will be reduced from 25 to 20 years for those installations with an eligibility date on or after August 1; and
  • Tariffs for installations that do not meet the energy efficiency requirements will mirror the tariffs for standalone installations.

New FIT rates at a glance

Band (kW)

Standard generation tariff (p/kWh)

Typical ROI

Multi-installation tariff (p/kWh)

Lower tariff (if energy efficiency requirement not met) (p/kWh)

Previous tariff (p/kWh)

4 kW (new build)

16.0

6.3%

14.4

7.1

21.0

4 kW (retrofi

16.0

6.3%

14.4

7.1

21.0

>4-10 kW

14.5

7.2%

13.05

7.1

16.8

>10-50 kW

13.5

7.2%

12.15

7.1

15.2

>50-100kW

11.5

6.8%

10.35

7.1

12.9

>100-150 kW

11.5

6.8%

10.35

7.1

12.9

>150-150 kW

11.0

7.4%

9.9

7.1

12.9

>250 kW – 5 MW

7.1

7.9%

N/A

N/A

8.9

Standalone

7.1

4.6%

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