The Feed In Tariff (FIT) was first introduced on 1 April 2010 under powers in the Energy Act 2008. It was originally designed to produce a return on investment of around 5%. The Treasury agreed a set of annual FIT budgets covering the years 2010 to 2015. However, any overspend in one year had to come from the following year's allocation. It soon became clear that return on solar PV investments would be much better than 5% resulting in the uptake in the first year being phenomenal. A summary from the the Solar Power Portal asserts that the budget for the year 2011-12 was set at £80 million but uptake was actually £89.6 million. Consequently, the DECC began a process of reducing the FIT returns in order to bring the uptake into line with what they had originally planned.

The effect of these changes was to bring down  the cost of PV hardware. This, in turn, enabled returns on investment for typical PV installations to stay in the 8-9% range, thus enabling solar PV to remain an attractive investment. This led the DECC to having another go at 'cooling' the demand for solar PV. After a public consultation, and a court challenge over the proposed timetable, the DECC finally brought in a sliding scale of returns which is actually linked to the uptake in a given three month period. This came into effect on 1 August 2012. The starting FIT rate began at 16p per kWh to be revised downwards every three months. (This can be six months if uptake is low.) The length of the scheme has been reduced from 25 years to 20 years. However, the export tariff has been raised from 3.2p/kWh to 4.85p/kWh. Payments will continue to be tax free and RPI linked.

A Summary of the Changes

The website www.fitariffs.co.uk has monitored and published FIT data for all types of renewable energy. The solar PV figures are summarised below.

 

Eligibility Dates

Starting FIT Rate
(Systems < 4 kWp)
(pence/kWh)

Export Tariff
(pence/kWh)

01 Apr 2010 - 31 Mar 2011

41.3

3.0

01 Apr 2011 - 02 Mar 2012

43.3

3.1

03 Mar 2012 - 31 Jul 2012

21.0

3.2

01 Aug 2012 - 31 Oct 2012

16.0

4.77

01 Nov 2012 - 30 Jun 2013

15.44

4.77

01 Jul 2013 - 31 Mar 2014

14.90

4.77

01 Apr 2014 - 30 Jun 2014

14.38

4.77

01 Jul 2014 - 31 Dec 2014

14.38

4.77

01 Jan 2015 - 31 Mar 2015

13.88

4.77

01 Apr 2015 - 30 Jun 2015

13.39

4.85

01 Jul 2015 - 30 Sep 2015

12.92

4.85

01 Oct 2015 - 31 Dec 2015

12.47

4.85

08 Feb 2016 - 31 Mar 2016

4.39

4.85

01 Apr 2016 - 30 Jun 2016

4.32

4.91

01 Jul 2016 - 30 Sep 2016 4.25 4.91
01 Oct 2016 - 31 Dec 2016 4.18 4.91
01 Jan 2017 - 31 Mar 2017 4.11 4.91
01 Apr 2017 - 30 Jun 2017 ??? ???