The Government Is Quietly Changing Your FIT Solar Payments

Ectophile

Qyburn said:

I don't suppose any of those "against" could put forward a plausible reason why FIT payment indexing should account for housing cost increases.

Because that's the basis on which people signed up for the FIT scheme.

mmmmikey

I wonder if there is a single person who signed up for the FIT scheme who would have even considered the difference between CPI and RPI at the time they signed, and if they had whether it would have made a blind bit of difference to their decision?

Goldwing1

mmmmikey said:

I wonder if there is a single person who signed up for the FIT scheme who would have even considered the difference between CPI and RPI at the time they signed, and if they had whether it would have made a blind bit of difference to their decision?

I did! The Government changed from RPI to CPI for pension uplift in 2010 when I retired. I stopped calculating the shortfall many years ago but, even then, the difference was in thousands. 

Qyburn

So seriously how many people would have chosen not to make the investment if they'd been told back then that they'd get 10 years indexed at RPI, with the balance at CPI (or CPIH)?

Maybe what the government could do is offer to refund those users their installation costs, if the users refund all their FIT generation and export payments.

clive_p

When we had our solar panels fitted about 10 years ago RPI was still the standard indexation method for government payments.  It still remains in place forthings like rail fares and student loan repayments.  I agree that a change to CPIH can be justified given that the flaws in RPI have subsequently become apparent, but the proposal to backdate the change so that new payments would be frozen for many years seems outrageous.  They have clearly hoped that this "consultation" would be well hidden - they certainly could have told all of us who are in receipt of FIT payments as OfGem must have access to our addresses and emails.  This seems pretty shoddy to me and we shall certainly be objecting.

clive_p

mmmmikey said:

I wonder if there is a single person who signed up for the FIT scheme who would have even considered the difference between CPI and RPI at the time they signed, and if they had whether it would have made a blind bit of difference to their decision?

I knew the difference between CPI and RPI when we signed up and it influenced our decision.  I was a season-ticket holder for many years - probably our largest single annual item of expenditure - and rail fares then (and now) still rise on the basis of RPI not CPI.  It seemed only reasonable to go for sources of income that would be indexed the same way.   I agree that a change now to using CPIH for indexation is not unreasonable, but their option (2) to backdate this to the outset seems unjustifiable and indeed outrageous.  It would be equivalent to making changes to the car tax on electic cars by making the owners pay now for all the past years when their tax was lower or zero.

Xbigman

Possibly worth mentioning. RPI will effectively cease to exist in 2030 anyway. This is just a slightly earlier change and is going to make a long term difference of, what, 3%. Life is too short to worry about 3% when the effect on my DB pension is in double digits % wise and the loss is in the £1000's.


Darren

QrizB

Xbigman said:

Possibly worth mentioning. RPI will effectively cease to exist in 2030 anyway. 

RPI will become CPIH, which the poster above you is suggesting would be a reasonable expectation for FIT payment indexing.

Singasonginbflat

The UK government is proposing changing the inflation indexation calculation for the Renewable Obligation (RO) and Feed-in Tariffs (FiT) schemes, from the Retail Price Index (RPI) to the Consumer Price Index (CPI):

• for the Renewable Obligation (RO) scheme, the inflation indexation calculation for the buy-out price would be changed by Ofgem from RPI to CPI
• for the Feed-in Tariffs (FiT) scheme, the annual tariff adjustment calculation would be changed from RPI to CPI

The indexation change would come into effect in April 2026 and would affect all UK generators on the RO and FiT schemes.

Consultation ends on 12 December 2025

QrizB

We've already got two threads on this. One is on the first page of the forum area where you've posted this.

https://forums.moneysavingexpert.com/discussion/6640461/the-government-is-quietly-changing-your-fit-solar-payments#latest

I'll ask the mods to merge yours into that one.