August Feed-in Tariff Rate Announcement: Rates and Positive Feedback

by Jarrah Harburn on May 24, 2012

Solar Feed-in Tariff, FiT, DECCThe Department of Energy and Climate Change (DECC) has today released the official solar feed-in tariff rates for 2012. On the 1st of August 2012 the new rates will come into play, one month later than earlier expected. The rates are better than expected and pave the way for a long and healthy growth of the UK solar industry.

The New August Rates

The new rates are as follows:

Band (kW) Standard generation tariff (p/kWh) Multi-installation tariff (p/kWh) Lower tariff (if energy efficiency requirement not met) (p/kWh)
4kW (new build) 16 14.4 7.1
4kW (retro-fit) 16 14.4 7.1
4-10kW 14.5 13.05 7.1
10-50kW 13.5 12.15 7.1
50-100kW 11.5 10.35 7.1
100-150kW 11.5 10.35 7.1
150-250kW 11 9.9 7.1
250kW-5MW 7.1 N/A N/A
Stand-alone 7.1 N/A N/A

Terms

  • The Feed-in Tariff (FiT) rates will be reviewed and reduced every 3 months by 3.5% for domestic (0-10kWp), small scale commercial (10kWp to 50kWp) and large commercial (>50kWp).
  • The length of tariff contract is now 20 years instead of the previous 25 years.
  • The return on investment (ROI) is expected and hoped to be maintained at 6% for typical installations and 8% for larger installations.
  • The Export Tariff is being increased from 3.1p per kWh to 4.5p, a significant and welcome adjustment.
  • All FiT rates will continue to be linked with the Retail Price Index (RPI).
  • The Multi-Installation tariff rate will apply to organisations with more than 25 installations and will be effectively 90% of the standard rate. This is an increase over the initial 80% that was proposed.

Summary

Overall the rates are very positive news for the industry. Greg Barker, Minister of State for the DECC, stated these new rates place the industry on a long and sustainable growth forecast and that much can be seen from the proposed layout. Large scale commercial solar is certainly becoming a highly viable and attractive investment sector and the new export rate and continued presence of Renewable Obligation Certificates (ROC’s) support this.  The domestic PV market will certainly be buoyed by these rates given how low pricing is already for the 2kWp – 4kWp market.

A 4kWp system will earn approximately £832.74* per year from the new rates. Given pricing is now under £6,000 inc VAT installed for such a system, returns are going to still provide attractive rates for home and business owners.

*Using the MCS approved SAP system and assuming 50% use at 12p per kWh and 50% export at the new 4.5p per kWh rate from 3,434kWh per year.

We here are very pleased with the new rates and believe the solar energy industry now has the tools to grow into a fantastic, thriving market in the UK. All those on board will continue to earn thousands of pounds from the sun’s energy at great returns and that certainly is reason to embrace the new summer weather.

Written by Jarrah Harburn

jarrah@solarselections.co.uk

T: 020 7205 2267

© 2012 Solar Selections Ltd

The ability to decide their problems are not transmitted by mail, and sell them as possible but not levitra coupons are the daydream of many boys who have decided on a strange act levitra coupon are online and fully accessible.

{ 2 comments… read them below or add one }

david August 16, 2012 at 9:05 pm

I’m a home owner who has a 4kw system up and running and I’m told the new domestic size is up to 10kw ? I can increase my size to 7kw with the roof space I have ! I’m paid at the 45p rate as I had my system installed on 16/11/11 so if I increased it what would I be paid for the new 3kw !!!! No one seems to be able to answer me ?????

Reply

admin August 28, 2012 at 11:01 am

Hi David,
If you were to install more of your system that would require re-registering the capacity of your inverter with your DNO (Distribution Network Operator). They need this to occur so the the grid is monitored and not over-loaded in certain areas where new sources of power, such as your solar panel system, are commissioned. The issue you have with this is that this would violate the terms of your current feed-in tariff agreement and essentially give your new total capacity system a new commencement date. This would lose you your 43.3pence tariff rate and sign you up to the new tariff rate which is far less at 14.5pence per kWh for the entire 7kWp system.
The only possible way to get around this would be have two meter boxes registered at the address, thereby installing a further 3kWp on the new rates without affecting your old 4kWp system. I assume you do not have this and if not, a new meter box is an expensive and complicated process of establishing.
The ‘Domestic’ rate is indeed up to 10kWp but this is just a label used by Ofgem to make sense of the different feed-in tariff rates. My advice would be to consult with your DNO if you are still unsure and look at other properties if you have them. The 43.3p rate is brilliant and not worth compromising through this further installation.
Best regards,
Jarrah Harburn
jarrah@solarselections.co.uk

Reply

Leave a Comment

Previous post:

Next post: