The UK government yesterday unveiled an overhaul of its solar feed-in tariffs.

From 1 August, the tariff for a small domestic solar installation will be 16p per kilowatt hour, down from 21p, and will be set to decrease on a 3 month basis thereafter, with pauses if the market slows down. 

All tariffs will continue to be index-linked in line with the Retail Price Index and the export tariff will be increased from 3.2p to 4.5p. The government claims that the new tariffs should give a return on investment of over 6 percent for most installations.

Tariffs have already been cut once this year: in April they were slashed from 43p to the existing 21p. The government tried to implement this reduction last December but was taken to court by solar companies who objected because a consultation period on the cuts was still ongoing. The government lost the case.

Energy and Climate Change Minister Greg Barker said yesterday that he wanted to send “a very clear message that UK solar continues to be an attractive proposition for many consumers considering microgeneration technologies." He added: “Having placed the subsidy support for this technology on a long-term, sustainable footing, industry can plan for growth with confidence.”

Alan Aldridge, chairman of the Solar Trade Association said: “Despite the currently slow market, the industry can have some confidence that the new tariffs are tight but workable. Householders should be reassured the new tariffs will provide more attractive returns than can be found elsewhere today. The STA is now keen to work with government to get this positive message out.”

Image: BrAt82 via Shutterstock