Yesterday’s announcement by DECC gives the industry some clarity
The DECC is laying before Parliament some draft licence modifications which, subject to the Parliamentary process set out in the Energy Act 2008, make provision for a the new rates to go through from April 1, 2012 with an eligibility date on or after 3 March, and should give us all the ability to move on again.
The Ministerial statement says:
“The consultation sought views on whether to reduce the generation tariffs available for new solar PV installations to a more financially sustainable level. Among other things, it proposed applying the new generation tariffs from 1 April 2012 to all new solar PV installations with an eligibility date on or after an earlier “reference date”, which we proposed should be 12 December 2011. This reference date proposal has since been challenged by judicial review and the Government has sought an appeal of the decision of the High Court. We are now waiting for a judgment from the Court of Appeal and we cannot be sure of the date on which this will be issued.
We continue to stand by our original proposal. However, I know that the uncertainty while we await the Court’s decision is difficult for the industry. A retention of the 43p tariff could also create substantial risks to the FITs budget if our appeal is unsuccessful. For these reasons, we believe it is prudent to bring forward our decision on one aspect of the consultation: the proposals for new solar PV tariffs.
We are therefore laying before Parliament today some draft licence modifications which, subject to the Parliamentary process set out in the Energy Act 2008, makes provision for a reduced tariff rate (from 1 April 2012 onwards) for new PV installations with an eligibility date on or after 3 March 2012.
If the Court finds in favour of the Government’s appeal, we intend to stand by all our consultation proposals, including an earlier (December) reference date, subject to the Parliamentary procedure and consideration of consultation responses. It is very important that we reserve this as an option because these 43p payments will take a disproportionate share of the budget available for small-scale low-carbon technologies. We want instead to maximise the number of installations that are possible within the available budget rather than use available subsidy to pay a higher tariff to a smaller number of installations.
The consultation closed on 23 December 2011 and over 2,000 consultation responses were received which we have been analysing carefully. We are intending to announce the outcome of the consultation by 9 February 2012, in time for any resulting legislative changes to come into effect from 1 April 2012. Our aim is that this announcement will be accompanied by a set of reform proposals for the next phase of the comprehensive review of the FITs scheme, which will be the subject of a further consultation.
The new generation tariffs set out in the draft licence modifications being laid today are set out in the table below and would apply for all installations with an eligibility date on or after 3 March 2012. Further information on the Government’s response to this aspect of the consultation, together with a summary of the relevant consultation responses, is also being published today on the Department for Energy and Climate Change’s website and will be available from www.decc.gov.uk/FITs.”
The new tariff rates are as per the original consultation, as follows:
It means that we are all effectively able to go to clients with these new rates as an offering. It may be that clients installing systems before the 3rd March will receive the old rates, but we can say with certainty that they will definitely get 21p for domestic projects. The EPC C requirements as well as the aggregator tariffs are not included in this proposal, but there is still a chance that they could be from April 2012, that will depend on what they decide following the publishing of the full outcome of the Phase 1 consultation.