New DECC Figures Confirm A 3.5% FIT Cut For 1st of October

Every quarter, the Department of Energy and Climate Change (DECC) report on the last three months' installation numbers and these are used to determine changes to the FIT rate.

The installation figures released by DECC this morning show the expected surge in the last quarter, will result in a further 3.5% cut in the FIT rates for sub 10kW on the 1st October. The 50MWp registered in June bring the total for the quarter up to 117MWp which is well above the trigger point needed of 100MWp.

Under the existing scheme it would seem likely that this trigger point will be exceeded in all quarters and therefore further quarterly cuts are very likely. This poses significant challenges for the industry to bring costs down faster.

Several announcements have been made by DECC over the last few days, but here is what you need to know.

The Government made several big announcements when it comes to renewables, so how will these announcements affect you?

• DECC have announced a consultation, which would mean that there will be no new large solar projects funded in the UK under the ROC scheme, after the 1st April 2016.
• DECC have announced the end of the Green Deal scheme.
• It is expected that businesses who were planning to build field mount systems will now focus more on large roof-top projects under the FIT scheme. However, under the existing FIT rules, if more than 130MWp of installations under FITs are registered in the 50kWp+ band in any quarter then that FIT rate is reduced by 28%. This is called a ‘hyper digression’ and it would, in effect, make such projects non-viable in the future. It is possible that such a level could be reached in Q4 this year (Oct – Dec) or Q1 next year (Jan-Mar) resulting in a 28% cut in the FIT rate in the 50kW+ band on the 1st April or 1st July.
• A review will be undertaken ‘later in 2015’ on the FIT scheme, which will almost certainly result in reductions in those FIT rates as of 1st Jan 2016 or 1st April 2016, but the implications from the announcements this week is that the smaller scale system will continue to be supported, albeit possibly at lower rates.