UK Solar feed-in tariff reduced by two-thirds from February 2016

The final date that feed-in tariff applications have to be received by Ofgem/Electrical companies to qualify for the current feed-in tariff rates is 14th January! Any application received after this date will be placed on the lower feed in tariff rate of 4.39p per kWh. This means that the final date AC Gold Energy can complete a solar PV installation will be Sunday 10th January. So please call 01786 849 099 to book your solar PV installation asap!

The UK government announced today that the solar feed-in tariff for domestic-scale solar power (<10 kilowatts) will be reduced by two-thirds (66.67%) from the end of January 2016. However, Ofgem will not be processing any new feed-in tariff applications after 14th January until 8th February, which means any application submitted after the 14th January 2016 will be on the lower feed-in tariff rate.

The current feed-in tariff payment is 12.47p per kilowatt hour for 4kW solar PV systems and is set to reduce to 12.03 pence per kilowatt hour on 1st January. The feed-in tariff will then change down to 4.39 pence per kilowatt hour for any feed-in tariff application receieved by Ofgem after 14th January, which means that on an average 4kw south facing solar PV system, the total income and savings will drop from £728.00 per annum to £468.00 per annum

The government also capped spending on the Feed-in-Tariff (FiT) scheme at £100 million a year for new installations from February 2016 to April 2019.

Under the feed-in tariff scheme, households and businesses which install solar PV panels are paid for the carbon-neutral electricity they generate and any unused electricity is sold back to the National Grid.

The British goverment admitted that a cut of that magnitude would scare off investors and a gradual decline in the subsidies would be better for the industry. Amber Rudd, Secretary of State for DECC said,

“We have to get the balance right and I am clear that subsidies should be temporary, not part of a permanent business model. When the cost of technologies come down, so should the consumer-funded support.”

The DECC published figures which show that the cost of the subsidies could reach £9.1 billion a year by the 2020/21 tax year compared with a proposed budget of £7.6 billion. Today’s announcement reduces the overspend by £500 – 600 million.

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