Comprehensive review consultation No. 3

The government’s consultation on the first comprehensive review of the FITs is highly controversial

It was published on the 31st October 2011 and responded to on 9th February 2012.

See the government consultation here and the response here.

Comprehensive review – key proposals

Reduction in PV tariffs

The reduced tariff levels which the government proposes are shown below.

This shows reductions of up to 56% (greater than the cost reductions, which the government says are about 30%). The large scale tariffs at the bottom had already been reduced by 70% in the Fast-Track review, and are now unchanged, but the mid range tariffs (above 50kW) are again being reduced by up to 32% even after the reductions in the Fast-Track review.

To all intents and purposes, these tariffs apply from 3rd March 2012.

Even lower tariffs for aggregated projects

Where owners register more than 25 PV installations, they will get even lower tariffs, according to the last column of this table:

New tariffs

Band (kW) Current generation tariff (p/kW) Proposed generation tariff (p/kWh) Multi-installation generation tariff (p/kWh)
<4kW (new build) 37.8 21.0 16.8
<4kW (retrofit) 43.3 21.0 16.8
>4-10kW 37.8 16.8 13.4
>10-50kW 32.9 15.2 12.2
>50-100kW 19.0 12.9 10.3
>100-150kW 19.0 12.9 10.3
>150-250kW 15.0 12.9 10.3
>250kW-5MW 8.5 8.9* 8.9*
stand alone 8.5 8.9* 8.9*
* These are the current tariffs which were not changed through the phase 1 consultation but which, like all other current tariffs (but not the new tariffs) will be adjusted in line with the Retail Price Index from 1 April 2012 to the levels set out in the table.

New requirement for energy efficiency

The government also intends to introduce a new energy efficiency requirement for PV installations: From 1 April 2012, in order to achieve the full tariff, domestic installations must be accompanied by an Energy Performance Certificate at level D or above.

Our assessment

It is hardly worth going through the detail!

In summary this is an undisguised assault to drastically reduce the level of PV take-up under the FITs, to meet a financial limit which the government based on fundamentally flawed analysis.

Although the government has not come clean in the consultation, our analysis shows they are trying to reduce the take up of the FITs by a swingeing 85%.

The timing, and government’s protestation that this is not retrospective, is disingenuous, bordering on the cynical.

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