Government wants to keep cutting solar feed-in tariffs

Household money

Updated on 09 February 2012 | 7 Comments

Plans to reduce amount paid for electricity generation by 10% every six months unveiled.

The Government has announced plans to continue to cut the amount homeowners and businesses can receive from solar feed-in tariffs (FITs).

It is proposing to cut the amount paid out for excess electricity sold on to the National Grid by 10% every six months. This is to offset its spending on the scheme, which was threatening to spiral out of control due to higher than predicted installations.

It also wants the new tariffs to be based on the level of take-up of the scheme. But this means that the proposed tariffs for homeowners coming into the scheme in the future could be reduced from their current level of 43.3p per kilowatt hour (p/kWh) to as little as 7.7p p/kWh by April 2015.

A consultation on these proposals is now open until 3 April.

Meanwhile, the Government has reiterated its deadline of 3 March for the latest batch of installations to potentially receive the current 43.3p p/kWh tariff.

However, if it successfully overturns a High Court verdict that its plans to impose an earlier deadline were “unlawful” at the Supreme Court, the deadline could be backdated to its original 12 December date. That could mean anyone installing between 12 December and 3 March may only be eligible for a rate of 21p p/kWh. The lower rate will definitely come into force on 1 April, regardless of the court verdict.

The Department for Energy and Climate Change has also confirmed some other changes to the scheme. It said that homeowners installing solar panels on or after 1 April will need to produce an Energy Performance Certificate rating of D or above to qualify for the full FIT.

Also from 1 April, a new ‘multi-installation’ tariff rate, set at 80% of the standard tariff, will be introduced for installations where homeowners or organisations are already receiving FITs. But this only applies if more than 25 installations are already in place.

More: Government loses appeal on solar feed-in tariffs | Free solar panels: The small print exposed

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