The drive to increase the number of rooftop solar PV installations in the UK has been widely reported in the press since the publication of DECC's strategy document entitled "UK's Rooftops to become power stations" in April 2014. The aim is to move the emphasis for growth of the solar PV sector away from large scale solar farms and, instead, focus on opening up the solar market for the estimated 250,000 hectares of south facing commercial roofs in the UK.
The Feed-in-Tariff (FiT) scheme is intended to encourage the uptake of small scale renewable and low-carbon technologies with a total installed capacity of up to 5MW. Anyone who owns such a system receives payments for every kilowatt hour of electricity generated. Payments are made for the energy generated (the generation tariff, which is a fixed payment for every kWh generated) and for any electricity exported back to the national grid (the export tariff, which is a guaranteed minimum payment for every kWh). Tariffs are paid for 20 years, (unless the solar PV system was installed prior to 1 August 2012, in which case it will benefit from 25 years' payments).
Tariff payment rates vary and are adjusted annually. The current rates are available on the Ofgem website.
Tariff rates for solar PV
Since 1 April 2012, three possible tariff rates have been available to solar PV installations – a higher rate, a middle rate and a lower rate. The rates for 2015/2016 are available on Ofgem's website
The rate that an installation achieves depends on the Energy Performance Certificate (EPC) rating of the building to which it is wired.
The FiTs legislation contains what is known as the Energy Efficiency Requirement. This requires an EPC which is valid (ie less than 10 years' old and the latest EPC for the building) on the Eligibility Date showing an EPC rating within bands A to D (or bands A to G if the installation is a community energy installation or school installation). The Eligibility Date is the date from which eligibility for FiT payments commences. If the installation does not meet the Energy Efficiency Requirement, it will only qualify for the lower rate tariff.
The middle rate will apply if the installation meets the Energy Efficiency Requirement but the FiT generator has applied to be the FiT generator or nominated recipient for 25 or more other solar PV eligible installations on different sites. This is commonly known as the multi-installation tariff.
The higher rate will apply if neither the lower rate nor the middle rate applies to it.
As tariffs are set for the 20 year period of FiTs entitlement, it remains to be seen how eligibility for the different rates will be affected by the regulations (expected later this year) under which installations will retain their entitlement to FiTs following relocation. What will the position be, for example, if an installation is moved from a building with an EPC rating of C (which would, therefore, qualify for the higher rate tariff) to one with an E rating (which would only qualify for the lower rate tariff)? Presumably the legislation will cover this and one imagines that, following such a move, the installation would only qualify for the lower rate. This would conform with the drive towards increasing the energy efficiency of the UK's buildings.
Maria Connolly, Head of Energy & Renewables at TLT comments: "As the lower rate tariff can be less than half of the higher rate tariff, having a building with a poor EPC rating can greatly affect payments under the FiT scheme. This, together with the prohibition on granting new tenancies of properties with EPC ratings of below E from 1 April 2018, is pushing property owners to look at the EPC ratings of their portfolios."
Contributor: Alexandra Holsgrove Jones
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at June 2015. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.
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