The government announced a consultation on changes to the Feed-in Tariff in October last year. It's been the subject of a High Court challenge fronted by Friends of the Earth and two solar panel installation companies which was upheld in January 2012. DECC sought to appeal this decision in the Supreme Court, but that appeal was thrown out on 23 March 2012.

We’ll be keeping you updated on how this situation develops and how it might affect you. For more information in the meantime we’ve gathered together the guidance below. If you don’t find the answer to your question here, please don’t hesitate to email homegen@goodenergy.co.uk. Someone from the team will be happy to help.

Already a FIT customer? Don’t worry. The rulings only affect new installations. You will continue to receive your current rate – subject to Retail Price Index changes – for the full 25 years.

What’s the latest?
The Supreme Court has rejected the government's appeal against the High Court challenge by Friends of the Earth and two solar panel companies. That ruling had stated that the 12th December 2011 deadline put in place for solar PV installations to claim the full 43.3p/kWh FIT rate was illegal.  The fact the government have not been granted leave to appeal by the Supreme Court means that this ruling now stands.

In February 2012 the government also announced a new consultation, focussing on the future of the Feed in Tariff.

So what's the situation now?

• Solar installations below 4kW in size registered between 12th December 2011 and 3rd March 2012 will receive the original 43.3p/kWh rate for 25 years, rather than the 21p/kWh rate proposed by the government.
• Solar PV installations below 4kW in size registered between the 3rd and 31st of March 2012 will receive the higher 43.3p FIT rate for their generation from the 3rd of March until the 31st of March. On the 1st of April 2012  their payments will decrease to the new lower rate of 21p for the rest of the 25 eligibility period
• Installations after the 1st of April and before the 1st of July will get 21p/kWh for 25 years.
• Solar PV installations registered on or after the 1st of April will qualify for 21p/kWh rate if the site has an Energy Performance Certificate rated D or above. If the property doesn’t meet this level it will receive a ‘standalone’ tariff.

What is still under consultation?

• The lifetime of the Feed-in Tariff for future installations could drop from 25 to 20 years.
• Rates for solar PV installations below 4kW in size could fall twice – once after the 1st of October 2012 and again after the 1st of April 2013.
• Multi-installation rates may only be available for community schemes, the definition of which is part of the consultation, but in principle excludes commercial “PV for Free” arrangements, which will only be entitled to the ‘standalone’ rate.

How will other technologies be affected?
New tariffs for other renewable technologies could apply from the 1^st of October. The proposals are laid out below.

• Tariffs for hydro and anaerobic digestion technologies will remain roughly static
• Wind installations above 100kW could be cut to 21p/kWh. Wind installations above 1.5MW could drop to 4.5p/kWh.
• Rates could reduce by 5% each year.

Why does the government want to cut the rate?
Since its launch in April 2010, the Feed-in Tariff has seen a phenomenal rate of uptake that the government significantly underestimated. This combined with the falling price of solar panels forced new spending restrictions to be placed on the scheme not long after its launch. There is now concern that the new spending restrictions will be breached. To prevent this happening, the government is introducing emergency measures. It is these that are currently under discussion.

What is Good Energy doing about it?
Good Energy is in regular contact with DECC so that we can bring you the latest information on developments related to the scheme.

The FIT is the most important vehicle we have for a more decentralised energy market in the UK and we're committed to ensuring that the FIT is reformed so that its budget is put on a sustainable footing. However it’s important that this isn’t done in a way which compromises its ability to transform the way that people can control the energy they use. We are working with DECC, both through this review and through the government’s Electricity Market Reform programme, to ensure that the FIT has a long-term future in UK energy policy. 

I have an existing installation which I am considering extending - which rate will my new panels receive?
Extensions are now treated as new installations, so the new tariffs will apply to your new panels. Depending on how soon after the original installation the extension is fitted, the price received on the whole installation may be affected. 

The ongoing court case around the FIT will determine which installations these will be. DECC has confirmed, however, that any installation registered before 1st April 2012 will receive the new 21p/kwh rate from that date.

If the extension is less than 12 months after the application for the original panels the rate of your existing panels may also be reduced. Please contact us with specific details of your extension and we will be able to give further guidance on tariffs.

How will the changes to the Tariff affect my return on investment (ROI)?
The government is targeting around a 4% ROI which will change the payback period from approximately 8 years to approximately 16 years for a sub-4kw scheme. For an accurate ROI please contact your installer who should provide forecasts on costs and the income you will receive.