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DECC announces more changes to solar Feed-in Tariff scheme
Published:  24 May, 2012

DECC has today introduced more changes for the solar Feed-in Tariff scheme, which it says will put the industry on a "more predictable, certain and sustainable footing".

Following the Department for Energy & Climate Change's (DECC) confirmation last week that it was postponing its original plans to cut the FiT rate from 1 July, it has now confirmed a range of changes which will take effect from 1 August.

After consultation with industry, DECC believes these changes will 'provide better value for money and allow businesses and householders to plan with confidence. This is good news for the industry and for consumers and will ensure that as many people as possible benefit'.

The tariff for a small domestic solar installation will be 16p/kwh, down from the current 21p rate, and will be set to decrease by 3.5% on a three-month basis thereafter, with pauses possible if the market slows down. All tariffs will continue to be index-linked in line with the Retail Price Index (RPI), while the export tariff will be increased from 3.2p to 4.5p.

DECC said the new tariffs should give a return on investment of over 6% for most typical, well-sited installations, and up to 8% for the larger bands.

Energy & Climate Change Minister Greg Barker said: “Today starts a new and exciting chapter for the solar industry. The sector has been through a difficult time, adjusting to the reality of sharply falling costs, but the reforms we are introducing today provide a strong, sustainable foundation for growth for the solar sector.

“We can now look with confidence to a future for solar which will see it go from a small cottage industry, anticipated under the previous scheme, to playing a significant part in Britain's clean energy economy. I want to send a very clear message today. UK solar continues to be an attractive proposition for many consumers considering microgeneration technologies and having placed the subsidy support for this technology on a long-term, sustainable footing, industry can plan for growth with confidence.”

Alan Aldridge, chairman of the Solar Trade Association said: “We broadly welcome many of the government’s decisions for how solar PV will be treated in the FITs scheme and wholeheartedly welcome the inclusion of Solar in DECC's updated Renewables Roadmap; this should reassure consumers and solar companies alike that the Government recognises and stands behind a major role for the solar industry.

“Despite the currently slow market, the industry can have some confidence that the new Tariffs are tight but workable. Householders should be reassured the new tariffs will provide more attractive returns than can be found elsewhere today. The STA is now keen to work with government to get this positive message out."

Other changes being made will mean that the multi installation tariff will increase to 90% of the standard tariff.