The Solar Feed-in Tariff (FiT) rate will be reduced to 16p as of the August 1st.
The rate, announced today by Energy and Climate Change Minister Greg Barker, will come into effect a month later than planned, when some in the industry were hoping the cut would be delayed to September.
The FiT rate is currently priced at 21p per kWh for small domestic solar installations and is now set to reduce on a three-month basis by 3.5%, given the market does not slow down, DECC says.
Government also says the new tariffs should give a return on investment (ROIs) of more than 6% for most typical, well-sited installations and up to 8% for larger brands.
Speaking in the House of Commons, Greg Barker said: “I want to send a very clear message today. UK solar continues to be an attractive proposition for many consumers considering microgeneration technologies and that having placed the subsidy support for this technology on a long-term, sustainable footing, industry can plan for growth with confidence.”
The Minister added the reform wold provide a “strong, sustainable foundation for the growth of the solar sector.”
In conjunction with the FiT update, the Government has also launched a cost-reduction programme with industry to help further cut costs.