UK: Further Changes To The Feed-In Tariffs Scheme

On 9th February 2011, the Government published its response to the first phase of the comprehensive tariff review of the Feed-in Tariffs ("FITs") scheme and two further consultations on further changes to the FITs.

Government Response to Consultation on Comprehensive Review Phase 1

Cuts to Solar FITs

In its response to the October 2011 consultation on FITs for solar PV the Department of Energy and Climate Change (DECC) has published the final decisions on the details of the tariffs, the new energy efficiency requirement, and of the new multi-installation tariff rates. The draft licence modifications instrument implementing these changes was laid before Parliament on 9 February 2012.

The new tariffs are due to come into effect from 1 April 2012, subject to Parliamentary scrutiny as required by the Energy Act 2008 and will apply to solar PV installations with an eligibility date on or after 3 March 2012.

The Government has reserved its rights to cut FITs for installation with an eligibility date between 12 December 2011 and 3 March 2012 subject to the outcome of the legal proceedings and Parliamentary procedure in the Energy Act 2008. The Government has until 21 February 2012 to lodge its appeal in the Supreme Court against the decision of the Court of Appeal.

'Multi-installation' Tariff

A new 'multi-installation' tariff will apply for new solar PV installations with an eligibility date on or after 1 April 2012 where the FIT generator or nominated recipient owns or receives FITs payments for more than 25 solar PV installations. This 'multi-installation' tariff will be 80% of the standard tariff applicable to that installation and the rate will not be increased in the event that the FITs payments are subsequently transferred to an entity that does not meet the 'multi-installer' criteria.

Energy Efficiency Requirements

From the 1st April 2012 to qualify for higher rate FITs, all new solar PV installations attached or wired to provide electricity to a building will have to satisfy that the building holds an Energy Efficiency Certificate rating of 'D' or above.  Subject to very limited exceptions, failure to meet this requirement will result in the installation being eligible only for a lower tariff rate of 9p/kWh as from 1 April 2012. 

Two further consultations on the FITs Scheme were also announced: a consultation on Solar PV cost control and a consultation on tariffs for non-PV technologies and scheme administration issues. The consultations close on 3 April 2012 and 26 April 2012 respectively.

Consultation on Comprehensive Review Phase 2A: Solar PV cost control

Further cuts to Solar FITs

The Government has proposed further cuts to solar PV tariffs for solar PV installations with an eligibility date on or after 1 July 2012. This new tariff will depend on the rate of deployment of solar installations in March and April 2012 (and includes three additional options for new solar PV installations of ≤4 kW capacity. In setting the new tariffs the Government proposes that the tariffs that would broadly deliver 4.5% - 8% return on investment. This, in the Government's view would "remove the need for emergency reviews" and make way for a "stable, predictable future for solar PV and for the whole FITs scheme". Further cuts to Solar PV are proposed in the Phase 2B consultation document.

Tariffs for 'multiple installations' and stand-alone solar PV installations would be lower that these standard tariff rates in line with the licence modifications outlined above.

Tariff degression mechanism

DECC is also consulting on its proposed mechanism for changing tariffs after 1 July 2012. The Government's preferred mechanism would be to have automatic baseline degression with ability to bring forward the degression steps if deployment exceeds pre-determined levels and an annual check.

The baseline degression is proposed at 5% reduction in October 2012, followed by subsequent reductions of 10% every 6 months. A contingent degression mechanism would apply if the actual deployment levels exceed the expected deployment by 125% before the date of the relevant baseline degression. This degression mechanism and the contingent degression mechanisms may be reviewed when the tariffs reach 2 ROCs.

Tariff Lifetime

The Government also proposes to reduce the tariff lifetime for all new solar PV installations from 25 years to 20 years.  If adopted, the reduced period would run from the date of implementation of the Phase 2A consultation.

Consultation on Comprehensive Review Phase 2B: Tariffs for non-PV technologies and scheme administration issues

Tariff Levels for Anaerobic Digestion, Wind, Hydro and MicroCHP projects

The Government is consulting on a new FITs levels to take effect from 1 October 2012. The upper limit of support provided under FITs is proposed to be capped at 21p/kWh for generation tariffs and for the following tariffs to apply for the following technologies:

Anaerobic Digestion: The Government intends to freeze tariffs for AD up to 500kW capacity installations, subject to a rise in line with RPI in April 2012. AD installations above 500kW would be subject to the 2ROC equivalent level (currently, 9.0p/kWh).

Wind: The Government has re-based the tariffs for wind installations that are eligible for FITs (i.e. below 5 MW) based on its updated analysis of costs and performance. The consultation sets the following bands:

  • for up to 100kW wind installations, the tariffs would be capped at 21p/kWh;
  •  for wind installations above 1.5MW and below 5 MW the tariff will remain unchanged at 1 ROC equivalent level (currently 4.5 p/kWh), with the banding to be adjusted in accordance with the current RO banding.

Hydro: There are no short term proposals to amend the tariff rate for hydro project save for the 21p/kWh cap.  Installations of 2-5MW capacity would receive 1 ROC equivalent (currently 4.5p/kWh), subject to the current RO banding review.

MicroCHP: The Government has proposed to raise the tariff level for MicroCHP to 12.5p/kWh due to the high manufacturing costs of this technology.

This consultation also outlines the Governments proposals to set an automatic degression rate of no less than 5% per year from April 2014. This would include capacity based triggers to accelerate degression steps, based on three months notice periods.

The Government is proposing further cuts to solar FITs from October 2012. It proposes to cut the solar PV tariff for non-'community-owned' multi-installations to the level equivalent to the stand-alone tariff (currently 8.9p/kWh). Social housing, community projects and distributed energy schemes would be exempt from these multi-installation tariff rates and would continue to receive a tariff of 80% of that offered to generators with up to 25 solar PV installations.

Further Information

  • To view DECC's press release and for links to the consultation documents, please click here
  • To read our previous Law-Now on the First Review of Feed-in Tariffs, please click here

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 13/02/2012.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.