Consultation outcome

Solar PV cost controls comprehensive review (phase 1)

This consultation was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

This consultation has concluded

Download the full outcome

FITs comprehensive review phase 1 – tariffs for solar PV - government response

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FITs comprehensive review phase 1: tariffs for solar PV - government response - impact assessment

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FITs comprehensive review phase 1 – tariffs for solar PV - explanatory memorandum

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Feed-in Tariff licence modifications

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Feed-in Tariffs: modifications to the standard conditions No 1 of 2012

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Feed-in Tariffs: modifications to the standard conditions No 2 of 2012

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Detail of outcome

Final decisions on the details of the new energy efficiency requirement, and of the new multi-installation tariff rates.

Original consultation

This consultation ran from to

Summary

Seeking views on a new tariff for schemes up to 4kW and reduced rates for schemes between 4kW and 250kW.

Documents

Feed-in Tariffs - comprehensive review phase 1 – solar PV

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FITs - solar PV - draft impact assessment

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REAL email to solar PV installers

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Consultation description

On 31 October 2011 the Government published a consultation on phase 1 of the Feed-in Tariffs comprehensive review.

An announcement on 19 January 2012 confirmed the new tariffs for solar photovoltaic (PV) that will continue to provide a competitive return on investment for householders, communities and others. The new tariffs are (from 1 April 2012) designed to apply to all installations with an eligibility date from 3 March 2012 onwards. To implement the new tariffs, the government laid before Parliament draft modifications to the standard conditions of electricity supply licences in line with the process set out in the Energy Act 2008. These modifications have now been made and came into force from the 3 March 2012.

On 9 February 2012 the government responded to the other aspects of the phase 1 consultation. This response sets out the government’s final decisions on the details of the new energy efficiency requirement, and of the new multi-installation tariff rates. We have listened carefully to concerns raised in response to the consultation and have decided that the energy efficiency requirement should be based on an Energy Performance Certificate (EPC) rating of level D or above, not level C or any other option as previously mooted.

We have also decided that the threshold at which the multi-installation tariff rates apply should be increased from generators with more than one PV installation to those with more than 25. This aims to help community groups, small businesses and councils who do not benefit from the economies of scale that larger aggregators can obtain.

To enact these decisions, on 9 February we laid before Parliament draft licence modifications to the standard conditions of electricity supply licences in line with the process set out in the Energy Act 2008. These modifications have now been made and came into effect for new PV installations with an eligibility date on or after 1 April 2012.

Phase 1 consultation

A consultation was launched on Phase 1 and ran until 23 December 2011. The proposals were subject to an 8-week consultation period and they introduce a new tariff for schemes up to 4kW in size of 21.0p/kWh – down from the current 43.3p/kWh. Reduced rates are also introduced for schemes between 4kW and 250kW, to ensure that those schemes receive a consistent rate of return.

The table of solar PV tariffs is below.

Band (kW) Current generation tariff (p/kWh) New generation tariff (p/kWh)
≤4kW (new build) 37.8 21.0
≤4kW (retrofit) 43.3 21.0
> 4-10kW 37.8 16.8
> 10-50kW 32.9 15.2
> 50-100kW 19 12.9
> 100-150kW 19 12.9
> 150-250kW 15 12.9
> 250kW-5MW 8.5 8.9
stand alone 8.5 8.9

Renewable Energy Assurance Limited (REAL) has written to installers with information about the proposed changes: REAL email to solar PV installers (PDF, 68.6KB, 4 pages)

If you are considering generating your own electricity, the Energy Saving Trust website also offers information about your options.

Energy Savings Trust helpline: 0800 512 012

Fast-track review

We have previously given fast-track consideration to the tariffs for large-scale (over 50 kilowatts) and stand-alone solar PV projects and farm-scale anaerobic digestion (AD) projects (up to and including 500 kilowatts). A consultation on the fast-track review was held from 18 March to 6 May 2011.

The outcome of this consultation was announced on 9 June 2011. This confirmed that, having carefully considered the responses received, the Coalition Government has decided to proceed with the proposed tariff reductions for large-scale solar PV (over 50 kilowatts), all stand-alone PV projects and increases for farm-scale AD projects (up to and including 500 kilowatts). The detail of this decision and the analysis underpinning it are set out in the fast-track review of Feed-in Tariffs consultation.

The new tariffs for large-scale (over 50 kilowatts) and stand-alone solar PV came into force on 1 August 2011. The new tariffs were introduced through Modifications to the Standard Conditions of Electricity Supply Licences. These modifications also include the new higher tariffs for farm-scale AD projects (up to and including 500 kilowatts). However, the implementation of the new AD tariffs was conditional on state aid approval.

The European Commission has now made its decision on the new AD tariffs. New tariffs for AD will apply to installations with an eligibility date from 30 September 2011, which is the date on which the Commission made the decision.

Extensions

Since announcing the outcome of the fast-track review, DECC became increasingly aware of evidence some large-scale solar PV developers were intending to use provisions in the FITs legislation on the accreditation of extensions to installations, to take advantage of the current tariffs beyond 1 August 2011. This was not the intended effect of the extension rules and was clearly inconsistent with the objective of the fast-track review.

Therefore, a consultation on the treatment of extensions was held from 27 July to 31 August 2011. The outcome of this consultation was announced on 27 September 2011 and confirmed the decision to amend the rules on extensions.

These amendments have been made through the Feed-in Tariffs (Specified Maximum Capacity and Functions) (Amendment No.3) Order 2011, which was laid in Parliament on 27 September 2011 and came into force on 18 October 2011.

The new rules mean that if the extension takes an existing installation over a tariff band boundary, the extension would immediately receive the new tariffs for the larger band, but the original installation would continue receiving the current tariff for its current band.