Feed-In Tariffs

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Contingent degression: corridors, triggers and levels

The contingent element of degression is related to trigger points of capacity deployed under the FITs

The level (or sometimes the timing) of degression can be varied depending on the capacity actually registered for tariffs in the given period.

Two degression approaches have been set; one for solar PV, and one for hydro, wind and AD. The timing and default degression percentages are shown here.

Tariffs for larger-scale wind and hydro are not subject to degression in the same way, but linked to pricing under the RO.

Contingent degression factors

The default degression levels can be adjusted, depending on the actual new capacity installed.

If actual installations are within the default ‘corridor’ the default degression (3.5% per quarter for PV, 5% per annum for others) will apply.

If deployment is below this, a lower degression level applies; and above the default corridor are 2/3 higher triggers where increased degression levels would be used, as shown below.

Technology Low corridor Default corridor High 1 corridor High 2 corridor High 3 corridor
Degression factors based on deployment
AD biogas 2.5% p.a 5% p.a 10% p.a 20% p.a
Hydro 2.5% p.a 5% p.a 10% p.a 20% p.a
Solar PV 0% 3.5% p.q 7% p.q 14% p.q 28% p.q
Wind 2.5% p.a 5% p.a 10% p.a 20% p.a

Contingent ‘degression bands’

The deployment corridors are assessed in various system size bands:

Installed capacity ‘trigger levels’ which define the applicable degression corridor
Technology and band Low corridor Default corridor High 1 corridor High 2 corridor High 3 corridor
AD biogas
<=500kW 0-2.3MW 2.3-4.5MW 4.5-9MW >9MW
>500kW 0-19.2MW 19.2-38.4MW 38.4-76.9MW >76.9MW
Total 0-12.5MW 12.5-25MW 25-50.1MW >50.1MW
Solar PV
<=10kW 0-100MW 100-200MW 200-250MW 250-300MW >300MW
>10kW<=50kW 0-50MW 50-100MW 100-150MW 150-200MW >200MW
>50kW 0-50MW 50-100MW 100-150MW 150-200MW >200MW
<=100kW 0-3.3MW 3.3-6.5MW 65-13.1MW >13.1MW
>100kW n/a 0-36.7MW 36.7-73.4MW >73.4MW

For solar PV, the relevant deployment period is the 3-month period ending three months before the degression applies. For other technologies, it is the calendar year ending three months before the degression rate changes. (See applicable degression dates here).

The actual levels achieved in period which have already completed are shown at the bottom of this page.

Emergency adjustments

In addition to all that the government can impose an emergiency degression at the half year for those technologies which are degressed annually.

It has tried to explain thecircumstances on when and how this would be done, if required.

Anyone remember the time we advised government to “keep it simple”?

Actual deployment levels and related degression %

Th government publishes the relevant deployment figures here, and Ofgem uses them to calculate the revised tariffs, which we show in the blue columns here.

Relevant figures published to date, and future estimates where available, are:

Technology and band Deployment (MW) Corridor Degression rate
Actual (and provisional) deployment figures and relevant contingent degression
Solar PV 1st May to end Jul 2012 – official from 1st Nov 2012
<=10kW 163.769 Default 3.5%
>10kW<=50kW 57.091 Default 3.5%
>50kW 13.938 Low 0%
Solar PV 1st Aug to end Oct 2012 – official from 1st Feb 2013
<=10kW 61.048 Low 0%
>10kW<=50kW 12.563 Low 0%
>50kW 24.657 Low 0%
Solar PV 1st Nov to end Jan 2013 – estimated from 1st May 2013
<=10kW 80.000 Low 0%
>10kW<=50kW 30.000 Low 0%
>50kW 40.000 Low [A] 3.5% [A]

[A] Sometimes default degression is applied even though deployment has been below the level where no degression should apply, because there can only be zero degression for two consecutive periods as detailed here.

Provisional and estimated figures

Where provisional or estimated figures are quoted above, these are taken from the same sources that the government uses for its official figures:

Estimated figures are derived before the quarter has ended based on published deployment figures for the first months of the quarter. The calculated totals take into account the fact that installations tend to increase towards the cut-off dates as shown by the weekly deployment graph.

Some statistics are added to the register late, so the provisional figures, which are derived from the first published data, may change.

Because the MCS figures are published weekly, there will be a small adjustment in reaching the official figures to allow for the partial weeks at the beginning and end of the period.

It is only when the final official figures are published by DECC that the degression percentages are finalised.

As predicted in our press release the February 2013 degression will be zero. The estimated figures above suggest that deployment is staying low and should again justify zero degression from 1st Mat 2013. However if this were the case PV systems over 50kW would see 3.5% degression anyway.