Changes to solar FiTs in August will include a tariff reduction

From 1 August a set of changes to the feed-in tariff (Fit) scheme will see solar subsidy tariff levels endure another cut, with the current generation tariff of 21p/kWh due to drop to 16p/kWh. 

The announcement puts to bed weeks and weeks of speculation and rumour that has been surrounding the solar scheme, with the Government hoping the reforms will help to deliver growth within a once booming industry.

The latest round of cuts were due to be introduced from 1 July however the Department of Energy and Climate Change (DECC) last week announced plans to extend the current FiT rates for one more month. Therefore end users looking to install small-scale solar PV systems have more time to benefit from the higher tariff levels before the reduction comes into force.

But it’s not just tariff levels changing. DECC has confirmed a few other ‘tweaks’ including:

  • The scheme’s lifetime will be reduced from 25 years down to 20 years for new solar PV installations.
  • FiTs will be frozen or reduced every three months, depending on the amount of solar installations in the preceding quarter.
  • The export tariff will go up from 3.2p/kWh to 4.5p/kWh.

“The sector has been through a difficult time, adjusting to the reality of sharply falling costs, but the reforms provide a strong, sustainable foundation for growth for the solar sector,” said Greg Barker, Energy and Climate Change Minister.

“UK solar continues to be an attractive proposition for many consumers considering microgeneration technologies and that having placed the subsidy support for this technology on a long-term, sustainable footing, industry can plan for growth with confidence,” he added.

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