Feed-in Tariffs: Solar PV Review

This note covers feed-in tariffs for solar photovoltaic electricity generation, including the review of tariffs announced in October 2011 for installations of 250kW or smaller. This follows on from a review earlier in 2011 which covered all solar projects larger than 50kW.

The reason for the second review was the unexpectedly high uptake of the scheme. The Government was concerned that the rates of return for generators were much higher than were projected, and about the impact high uptake would have on energy bills. Critics, including the industry, were unhappy at the short timescale involved, as any new tariffs would be applicable from 12 December 2011, two weeks before the consultation closed.

The High Court and the Court of Appeal have ruled that the proposal to cut rates from 12 December was retrospective and therefore illegal but the Government lodged a request to appeal against this in Supreme Court, which was denied on 23 March 2012. As a contingency, it had produced draft regulations that would reduce the tariffs for solar from 3 March 2012 instead, which is when the cuts will now come into effect.

There were also proposals to reduce the level of return for generators who own multiple installations and proposals to link the ability to qualify for tariffs to the energy performance of a building. The Government announced that it would be going ahead with these measures in February 2012 when it also published a third consultation on solar PV setting out proposed tariff levels from July 2012.

For an overview of the scheme and details of the Feed-in Tariffs for all renewables please see Library Note SN06200. For details of support for large-scale renewable generation see Library Note SN05870 on the Renewables Obligation