Solar PV feed-in-tariff fiasco – update
On Wednesday 25th January it was reported that the Government had lost their right to appeal the earlier judgement that a reduction in solar pv feed-in-tariffs was unlawful. The government were refused the right to appeal which led Solar industry professionals and consumers to believe that the higher rate of 43.3p would apply for installations up to 4kWp made before 3rd March 2012. However recent activity has led to yet more uncertainty within the sector.
Background:
Solar PV feed-in-tariffs were introduced in April 2010 as an incentive for individuals and businesses to generate their own electricity. There are three levels to the feed-in-tariff scheme – Generation tariff, export tariff and electricity savings. The tariff in question here is the generation tariff.
With the generation tariff, a payment is made for every kilowatt hour (kWh) of electricity your solar PV system generates. It does not matter whether you use this or not, it is based purely on what your panels produce. In April 2010 this was set at 43.3p for every kWh produced for systems up to 4kWp. Reductions in the feed-in-tariff were always expected, with a small drop expected from 1st April 2012.
Government Changes
On October 31st 2011, the Department of Energy and Climate Change (DECC) released details of a proposed change in the feed-in-tariff which would reduce the 43.3p down to 21p. In addition to this, they proposed an earlier cut-off date of 12th December 2011 – giving the industry just 6 weeks to prepare for such a dramatic change. The consultation period for this proposal was due to end on 23rd December 2011 – 11 days after the proposed new cut-off date.
Two solar companies, along with Friends of the Earth, took DECC to court accusing their actions of being illegal. The court ruled that the action of imposing an earlier date whilst the consultation period was still in progress, was in fact unlawful. DECC appealed and on the 25th January it was announced that their appeal had not been granted.
The news that the 43.3p rate had been reinstated travelled quickly throughout the industry, with news sites and Solar PV installers reporting that the higher tariff would now apply. Planet Solar were also led to believe this and reported these facts to customers. We also highlighted the fact that although the government had lost their right to appeal by the Appeal Court, they could still go direct to the Supreme Court and appeal – which is exactly what they have done.
This basically means that DECC have started the process of appeal and the feed-in-tariff rate remains at 21p throughout this process. They have 28 days to launch the appeal and the overall process can take up to a year before it is heard in the Supreme Court (if they are granted an appeal). The decision as to whether or not the Supreme Court can hear the appeal may take up to 6 weeks too.
So, to cut a long story short – at present the rate still stands at 21p.
So what does this mean for customers?
We would encourage consumers to proceed with your Solar PV installation as soon as possible to get your systems installed and commissioned before the 3rd March 2012. Decisions should be based on a 21p feed-in-tariff rate until an official announcement is made. A tariff of 21p still offers a fantastic return on investment, and should the rate of 43.3p per kWh be confirmed, your first payment would be backdated at that rate to the installation date if you install prior to 3rd March 2012.
At Planet Solar we currently have 50 slots available in our installation schedule before the March deadline.
We would suggest you contact us as soon as possible to arrange a survey and confirm your order to ensure you do not miss out.
Keep checking our news pages for further updates – you can also check our feed-in-tariff news section for any other details relating to the payment scheme.
