This is the start of the review of the Feed-In Tariffs mechanism covering reductions in PV tariffs from 3rd March 2012
Government consultation and its response
The consultation was published at the end of October 2011 and the response published on 9 February 2012.
Consultation (31 Oct 2011): You can see the original here and our further assessment here.
Government response (9 Feb 2012): You can see the original here. The ministerial statement relating to this is here.
This ill-fated review focussed entirely on solar PV, and ways to slow down its deployment, despite the original brief, this is another emergency review (similar to the Fast-Track review). And there’s still more to follow!
There was substantial opposition to the changes, including a judicial review which ruled against the government, followed by an appeal, which the government also lost, and subsequent refusal by the Supreme Court of a further appeal.
PV Tariff reductions
The major effect is drastic reductions to the tariffs for PV as follows (there will also be the introduction of energy saving requirements and multi-installation tariffs – see below):
| Band (kW) | Old – pre 3rd March 2012 – tariff (p/kWh) |
New – post 3rd March 2012 – 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* |
These new tariffs will effectively apply to all installations registered from 3rd March (the government originally wanted 12th December 2011 but this was declared unlawful in a judicial review). See the government statement here.
… though, in a fit of unparalleled generosity, the government will allow systems installed between 3rd March (or 12th December) and 31st March to get the old tariff level until 1st April 2012.
New eligibility restrictions
The following further proposed restrictions eventually led to the introduction of ‘higher’, ‘medium’ and ‘lower’ rates as further detailed here.
Energy efficiency requirements (EPC rating of D or above)
In the government’s words: “We have decided to proceed with an energy efficiency requirement for new solar PV installations with an eligibility date on or after 1 April 2012, as a pre-requisite of eligibility for the standard solar PV tariff rates. This will mean that new FITs applications for solar PV will need to demonstrate that the building to which the solar PV installation is attached or wired to provide electricity has an Energy Performance Certificate rating of Level D or above.”
Multi-installations
Again, in the government’s words: “We have decided to proceed with multi-installation tariff rates which will apply to all new solar PV installations with an eligibility date on or after 1 April 2012 where the FIT generator or the nominated recipient for FIT payments receives FITs income from more than 25 solar PV installations, located on different sites. This is also a change to the original proposal, under which any FIT generator or nominated recipient with more than one installation would have received the multi-installation tariff.” For the multi-installation tariffs, please see here.
Later consultations
On 9th February 2012, the government also announced two further consultations: 2A on controlling the cost of the PV portion of the FITs, and 2B non-PV tariffs and administration issues.
Background
The Feed-In Tariffs regulation always envisaged a full review.
DECC had a web-page for this review.
Terms of Reference
The review was intended to be comprehensive and, as set out when the FITs scheme started, would consider all aspects of the scheme including:
- Tariff levels
- Degression rates and methods
- Eligible technologies
- Arrangements for exports
- Administrative and regulatory arrangements
- Interaction with other policies
- Accreditation and certification issues
In practice it was just another ’emergency’ slashing of the support for PV as described above. The government seems to have totally ignored the 260 responses it says it received to the last question in the original fast-track consultation. These suggested that the comprehensive review should look at issues under all of the following headings:
- 1. Objective and role of FITs
- 2. Scheme reviews
- 3. Tariff levels and design
- 4. Spending Review commitment and levy control framework
- 5. Degression
- 6. Eligibility
- 7. Accreditation and certification
- 8. Administrative and regulatory arrangements
- 9. Interaction with other policies
Timetable
The government originally said:
The review will be completed by the end of 2011, with tariffs remaining unchanged until April 2012.
… but the Fast-Track review changed some PV tariffs from 1st August, and the comprehensive review now changes the rest effectively from 12th December 2011 (see above).
The consultation was originally promised in the summer, but actually came out on 31st October 2011 and responded to on 9th February 2012.
Any legislative changes will need to go through parliament in time to enable them to come into effect by 1st April 2012.