UK feed-in tariff rates announced for a consultation period

The UK Feed-in-Tariff rates have been announced for consultation. The headline rates are as follows:

The consultation can be found online by following this link. Please note that the document was only open for consultation until the 15th OCTOBER 2009.

A feed-in tariff is the name given to legislating a fixed price of purchase for every unit of electricity generated.  The price is valid for 20 years and allows an investment to be made with confidence as opposed to the vagaries of fluctuating energy costs.  This in turn encourages private investment in low carbon electricity generation that would otherwise have not taken place.

The scheme was first introduced in Germany and has since spread across most of Europe. It is also likely to spark new investment in photovoltaic technology within this country and create jobs.

The tariff will begin in April 2010,  with the aim of making a PV system return in the region of 5-8% annually.  This is deemed enough to encourage small investors, but not flood the market

The rates are set for twenty years.  Every year after the first, the rate declines by 7%, with the point being to encourage investment now rather than later.