Solar Feed-in Tariff Rate Confirmation

Wednesday 25th January 2012

The Department of Energy and Climate Change (DECC) have lost their appeal over ‘unlawful’ cuts to the Solar PV Feed-in Tariff (FIT), in the Court of Appeal.

DECC’s consultation to half the FIT – the rate of payment for units of Solar Energy generated – from 43.3p to 21p, launched on 31st October 2011. However, the High Court ruled that the cuts – implemented 11 days before the consultation end date – were “legally flawed”, which the Court of Appeal has upheld.

How does this affect the FIT rate?

Technically, the Court of Appeal ruling should see the FIT rate return to 43.3p; however, DECC have announced their intention to appeal to the Supreme Court. Until this is heard, the FIT rate is guaranteed to be at least 21p for Solar Panels up to 4kWp installed before April 2012.

This FIT rate was confirmed in a Written Ministerial Statement presented to Parliament on Thursday 19th January 2012. The Statement, which is also available on DECC’s website, establishes that all Solar Panels installed before April 2012 are guaranteed to receive the FIT rate of at least 21p for 25 years.

DECC and the Energy Saving Trust have also both confirmed to EnergyLink that the FIT rate is currently 21p, unless confirmed otherwise.

What FIT rate are energy providers paying?

EnergyLink have contacted the main energy providers to find out what FIT rate they will be paying until April 2012. Two confirmed that they will be paying 21p unless they hear otherwise from DECC, while three were uncertain. Crucially, none of the energy providers said that they would pay 43.3p until official confirmation was given by DECC.

Below is an excerpt of an email to EnergyLink from one of the ‘big six’ energy suppliers:

"Currently, the generation tariff rate remains at 21.0p per kWh as the Department of Energy & Climate Change (DECC) are now escalating their appeal to the Supreme Court. Until an official announcement is made by DECC, please treat the tariff as 21.0p per kWh.

Hopefully, an update on this will be made public soon so that all affected are able to proceed accordingly, but at this point we cannot say anymore than the tariff is currently set at 21.0p per kWh.

Should it go up to 43.3p per kWh, your first payment would be backdated at that rate to the installation date."

Could the Supreme Court ruling affect the FIT rate?

Yes, it is possible that the FIT rate of 43.3p will be reinstated if DECC lose their appeal in the Supreme Court. If this is the case, payments would be backdated to the date that the Solar Panels were installed and would remain at 43.3p for the remainder of the 25 year FIT period.

Is now a good time to apply for Solar Panels?

Yes, despite the FIT debate, now is an excellent and viable time to invest in Solar Panels.

This is because customers who have Solar Panels installed before April 2012 will be in a double win situation. The rate of 21p – giving an estimated lucrative Return on Investment between 7.3% and 9.3% - is guaranteed, while there is also the potential added bonus of the FIT rate increasing to 43.3p.

Try our Feed-in Tariff Calculator to find out how much you can earn and save from Solar Panels and a guaranteed FIT rate of at least 21p. If you like what you see, complete the online Application Form to receive three free no-obligation surveys from MCS accredited Solar installers.

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