Businesses Can Take Advantage of Delay to Feed-in Tariff Cuts

November 25, 2015

Businesses considering solar should be aware that their opportunity to take advantage of the existing feed-in tariff rates – before they are severely cut by up to 87% – will now go beyond the initially Government proposed enforcement date of 1st January, quite possibly now until 1st March.

In August this year, the Department of Energy & Climate Change (DECC) announced that the feed-in tariff scheme – implemented back in 2010 – has been a victim of its own success and therefore the cuts were necessary to ensure costs wouldn’t rise above budget. Other Government funding for renewable technologies such as CfD’s and ROC’s, were also subject to cuts.

The significant change to the feed-in tariff order was open to a consultation period which has stimulated over 55,000 responses to DECC and is still ongoing (as of 25th Nov). DECC are obliged to give 40 parliamentary days’ notice for any negative outcome to the consultation, and whilst they still intend to publish their response before the end of the year, each day that passes is extending the window beyond the 1st January for businesses to take advantage of the current feed in tariff rates.

For example, if the consultation response is published by DECC on 7th December, this would mean that businesses could still lock in the current rates – albeit subject to the pre-agreed regression of 3.5% – for new installations installed before 25th February. See the bottom of this article for more information on the current and proposed rates.

In October, EvoEnergy responded to the proposed cuts with a positive message, confident that solar will still be an attractive financial proposition to businesses, even without Government subsidy – a stance we still firmly take today. However, the delayed enforcement of the cuts will be welcome news for businesses knowing that the window of opportunity to take advantage of the existing rates has been extended whilst DECC formulate their response to the consultation.

EvoEnergy advise that this is an ongoing saga and further updates will be made via our news blog online. Despite the extended opportunity, EvoEnergy are also advising that businesses should not take this period for granted and any interest should be moved forward as quickly as possible as grid connection and planning applications will still need to be made and approved before the installation can go ahead.

What are the current feed-in tariff rates and what will they be from 1st Jan 2016?

Whilst DECC are formulating a response to the consultation, the table below shows what the current FiT rates are and what they will now be from 1st January, with all of the bands subject to the pre-agreed 3.5% regression.

Tariff BandCurrentfrom1st Jan
0-4 kWp 12.47p 12.03p
>4-10 kWp 11.30p 10.90p
>10-50 kWp11.30p 10.90p
>50-150 kWp 9.63p 9.29p
>150-250 kWp9.21p 8.89p
>250 kWp 5.94p 5.73p
Export Tariff 4.85p 4.85p

Until further notice, pending a response from DECC following the consultation, the intended rates – and changes to the bandings – for the reset of the feed-in tariff subsidies are as follows. These rates were originally set to come into force from 1st January, but as per the above article, these rates are unlikely to happen now until at least the end of February.

Tariff BandProposed
0-10 kWp 1.63p
10-50 kWp 3.69p
50-250 kWp2.64p
250-1000 kWp 2.28p
>1000 kWp1.03p
Export Tariff 4.85p

Visit the following link for more information on the feed-in tariff.

 

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