The proposed regular review mechanism is welcomed, as it will give certain windows of two months before a change in the FIT’ comes into effect for solar PV projects.

On 9th February, the Government published their response to the consultation published 31st October 2011 as well as the Comprehensive Review on Phase 2A: FiTs for solar PV, going beyond April 1st 2012.

Headlines

From the October 31st 2011 consultation- FIT reductions from 1st April to all tariffs; an EPC rating above 'D' required to be submitted with the FIT application; multi-installation tariffs for those who own over 25 solar PV installations.

From comprehensive review phase 2- further FIT reductions from 1st July 2012; three future rates depending upon amount installed in March and April 2012; 20 year FIT period, down from 25 years; CPI instead of RPI indexation; increased minimum export payment.

Strutt & Parker view

The proposed regular review mechanism is welcomed as it will give certain windows of two months before a change in the FIT' comes into effect for solar PV projects. For schemes up to 50kW this is a manageable time frame. For larger schemes a longer period is required as the bigger projects take longer to plan and deliver.

As the price of solar PV continues to fall the rational for reducing FIT's is sound; but six monthly reductions may not be the correct periods if the price of solar PV does not fall as rapidly and ultimately could halt
deployment.

The requirement to achieve a 'D' on an EPC is an interesting one; particularly for older or Listed properties. We will be issuing some guidance on how the installation of solar PV will improve the EPC rating.

We believe solar PV is a good technology that performs as expected and we hope that these proposals will give a more stable environment than that seen during 2011.

Read the full Resources & Energy Briefing.