Tariffs are indexed to the Retail Price Index
Each year the set level of the generation and export tariffs will be adjusted pro-rata to the retail price index change in the previous calendar year. The Tariff administrators then publish the updated tariff levels.
When does the index-linking apply?
Aaahh! You’ll be sorry you asked. All tariffs used to go up every year in April based on the RPI in the previous calendar year. But now:
After a system is installed and the tariff is set:
The tariff will index with effect from 1st April in the following year. Therefore for a system is installed in January 2013, the tariff was not indexed until April 2014. Why?
Indexing tariffs for future installations:
This got mixed up with the degression mechanism in April 2013, when the non-PV tariffs were increased in line with RPI, but the PV tariffs were not. Why?
Historical index-linking factors
The indices used so far are:
|Year beginning||RPI Index||Cumulative|
|1st April 2010||[base year]||0%|
|1st April 2011||4.8%||4.8%|
|1st April 2012||4.8%||9.8%|
|1st April 2013||3.1%||13.2%|
|1st April 2014||2.7%||16.3%|
|1st April 2015||1.6%||18.2%|