PHASE 1 & 2 FITS ANNOUNCED

Phase 1 and Phase 2 Feed-in Tariff summary announced - February 9, 2012

Renewable Energy News Alert

Phase 1 – Solar PV

Phase 1 (Phase one) proposes that the tariff rate of 21p/kWh for solar PV will take effect from 1^st April 2012 for domestic installations (<4kW), with an eligibility date on or after 3^rd March 2012.

For installations which take place on or after 1^st Aril 2012, properties will be required to meet Energy Performance Certificate (EPC) ‘D’ rating to qualify for the full Feed-in Tariff (FITs) rate.

The Department of Energy and Climate Change (DECC) estimate that half of all UK properties are already eligible for the ‘D’ rating.

From 1^st April 2012, a new ‘multi-installation’ tariff rate will be set. This will be set at 80% of the tariff for solar PV installations where an individual or organisation has more than 25 installations of solar panels (e.g. at various properties).

DECC are also consulting on a proposal that social housing, community projects and distributed energy schemes be exempt from these multi-installation tariff rates and will therefore still be eligible to receive the individual tariff.

Phase 2 A – Solar PV cost control

The consultation for Phase 2 A (Phase two) proposes the implementation of a ‘cost-control’ mechanism, whereby the tariff for solar PV is reduced by 10% every 6 months.

However, this will be dictated by the level of take-up for solar PV – a ‘deployment trigger’ – to ensure that subsidy levels are in line with solar PV costs. This is inspired by the German system, and is designed to remove the need for emergency reviews and create a stable, predictable future for solar PV and the FITs scheme. It is also intended to keep the long-term costs of installing solar panels down in order to increase the number of people able to benefit from the FITs over time.

This consultation will be open for 8 weeks from 9^th February to 3^rd April 2012.

Phase 2 B – Tariffs for non-PV renewable technologies and scheme administration issues

Phase 2 B (Phase two) is reviewing the tariffs for the four non-PV renewable energy products: wind turbines, Hydro, Anaerobic Digestion and micro-CHP.

This will also introduce a digression mechanism dictated by ‘cost evidence’ – past and future trends in the costs of equipment and installation.

It will propose the ‘tariff guarantees’ for wind turbines, anaerobic digestion and hydro projects so that consumers of these technologies can have certainty about the rates of return they will receive.