3.5% FIT degression announced for small-scale UK solar

Small-scale solar PV installations eligible for the U.K. feed-in tariff (FIT) will be subjected to a rate 3.5% lower from January 1, 2015.

The U.K.’s Office of Gas and Electricity Markets (Ofgem) confirmed that the lower tariff for all installations in the <50 kW band will be triggered in the new year after insufficient solar deployment in this range in 2014 failed to spark an automatic degression.

Instead, Ofgem has pre-empted the degression despite some industry experts predicting that sterong growth in the third and fourth quarters would have been sufficient to trigger the 3.5% degression unaided.

The new lower rate stands at £0.1171/kWh for the >10-50 kW band (down from £0.1213/kWh), £0.1257/kWh for the >4-10 kW band and £0.1388/kWh for the 0-4 kW band.

Changes to the U.K.’s subsidy scheme for large-scale solar announced earlier this year were intended to shift support towards the smaller-scale domestic sector, but despite encouraging signs of growth in recent weeks, ground-mount PV capacity is poised to overtake installed rooftop capacity before the end of 2014.

Deployment between the two sectors will likely end the year close to 50:50, with approximately 2 GW in each. However, the first quarter of 2015 is likely to see ground mount activity pull ahead, according to NPD Solarbuzz.

The untapped potential of the commercial-scale sector – thus far untouched by FIT degressions and still eligible for the attractive Renewable Obligations Certificate (ROC) could adopt a leading role in the U.K. solar landscape in 2015, but experts are unsure just how strong this market can become.

To see the latest FIT rates for the U.K. and other countries, visit our dedicated FIT page.