Tariffs are indexed to the Retail Price Index
Each year the set level of the generation and export tariffs will be adjusted pro-rata to the retail price index change in the previous calendar year. The Tariff administrators then publish the updated tariff levels.
When does the index-linking apply?
Aaahh! You’ll be sorry you asked. All tariffs used to go up every year in April based on the RPI in the previous calendar year. But now:
After a system is installed and the tariff is set:
The tariff will index with effect from 1st April in the following year. Therefore for a system is installed in January 2013, the tariff was not indexed until April 2014. Why?
Indexing tariffs for future installations:
This got mixed up with the degression mechanism in April 2013, when the non-PV tariffs were increased in line with RPI, but the PV tariffs were not. Why?
Historical index-linking factors
The indices used so far are:
| Year beginning | RPI Index | Cumulative |
|---|---|---|
| 1st April 2010 | [base year] | 0% |
| 1st April 2011 | 4.8% | 4.8% |
| 1st April 2012 | 4.8% | 9.8% |
| 1st April 2013 | 3.1% | 13.2% |
| 1st April 2014 | 2.7% | 16.3% |
| 1st April 2015 | 1.6% | 18.2% |