Fit Announcement

On 31st October 2011 DECC announced its intention to cut the Solar PV Feed-In-Tariff rate by up to 50% from 1st April 2012, with a cut-off date of 12th December 2011. This reference date was criticised from all sectors of the industry & public (because it was two weeks before the end of the consultation) and has since been challenged by judicial review, consequently held up in the High Court. A judge ruled that the 12th December 2011 reference date was “unlawful”. The Government launched an appeal immediately. However, leave to appeal was not immediately granted and, as a result, uncertainty flooded into the UK Solar Photovoltaic market, which saw many people pulling out in fear of what the future holds & other keen homeowners looking to install being frozen until a decision! On the 19th January 2012, the Department of Energy & Climate Change announced an update on the Government Feed-In-Tariff. DECC is laying before Parliament a new draft licence modification, which makes provision for a new rate to go through from 1st April 2012, with an eligibility date on or after 3rd March 2012. “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,” said Secretary of State, Chris Huhne. If the Government appeal is granted by the high court, then the Government holds the right to force through the original proposal date of 12th December 2011. “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. However, we are still pressing ahead with our appeal and if successful, we retain the option of introducing a December reference date. In the circumstances we believe this gives the industry as much certainty as is possible. And it puts us in a better position to protect the budget for everyone involved,” The first phase of the Government FITs consultation closed on 23rd December 2011 having received 2,000 responses. It is believed that DECC will announce the outcome of this by 9th February 2012, which gives sufficient times for any resulting legislative changes to come into effect from 1st April 2012. The UK Solar Industry and we at ISO Energy expect that this announcement will be accompanied by a complete set of reform proposals for the next phase of the review of the FITs scheme, which once again will be under review by the industry, public & high courts.The new generation tariffs that have been set out in the DECC draft licence modification are as follows and would apply to all installations with an eligibility date on or after 3rd March 2012.

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