Feed-in tariff increases by RPI from 1 April 2013
Posted by Cathy Debenham on 26 March 2013 at 9:08 am
Most existing recipients of the feed-in tariff and the renewable heat incentive will receive an increase in their tariff rates in line with the retail price index from 1 April 2013. However, for some recent recipients of the feed-in tariff of solar PV the first RPI increase will not happen until 1 April 2014.
Below is the Department of Energy and Climate Change's explanation of who gets what when (warning: it's a bit complicated!).
Retail Price Index link
RPI change is applied every April, it is the percentage increase or decrease in the Retail Price Index over the 12 month period ending on 31st December immediately before the start of the relevant FIT Year
Tariffs are affected by RPI in different ways (see below):
PV generation tariffs
In May 2012 we announced the new tariffs for PV and the degression policy which started on 1 Aug 2012. Current tariffs for all PV bands are in the Ofgem tariff tables page.
The RPI change is applied based on when an installation becomes eligible:
- Installations between 1 November 2012 and 31 March 2013 will not get an RPI increase in 2013. These sites will receive the first RPI change on 1 April 2014.
- installations with an eligibility date between 1 April and 31 December receive RPI change from 1 April of the next FITs year
- installations with eligibility date between 1 January and 31 March receive RPI change from 1 April in the following FITs year.
The reason for this approach is that investment decisions are made based on tariffs at the time. The RPI link is designed to reflect the impact of annual inflation on this decision and it is therefore consistent to apply the RPI change during the relevant calendar year. This is explained on page 22 of the Phase 2a Government Response.
Legislation reference is paragraph 9(b) and paragraph 29 (b) of Annex 4 to the Feed-In Tariffs: Modifications To The Standard Conditions Of Electricity Supply Licences (No. 4 Of 2012).
This is based on the expected value of electricity “spilled” to the network:
The tariff is increased in April every year with RPI (based on process explained above). Ofgem publish the tariff in March each year – and it is available here. Generators receive the export tariff on their eligibility date (which is then changed each April by the RPI percentage).
So far there are two base levels of export tariff:
- 3p – start of scheme nominal value, actual rate is currently 3.2p/kWh, and it will increase to 3.3 p/kWh from April 2013
- 4.5 p/kWh - Post 1 Aug 2012 (for solar PV) and post 1 Dec 2012 (for non-PV) nominal value; this will increase to 4.64 p/kWh from April 2013
Legislation reference is paragraph 10 and 30 of Annex 4 to the Feed-In Tariffs: Modifications To The Standard Conditions Of Electricity Supply Licences (No. 4 Of 2012).
Feed-in tariff information page
If you have a question about anything in the above blog, please ask it in the comments section below.
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