The unit cost for all suppliers across Great Britain for each year starting 1 April is dependent on the amount of generation from these small installations and the tariff rates are applicable depending on their technology type, energy efficiency rating and eligibility date. The amount of generation will depend on the equipment availability (Load Factor) which may be weather dependent. There are also some small administration allowances per installation.
The total cost for the year is not declared by DECC until the following September. Forecasting of current and future year costs needs to take into account existing installations, their expected generation and the tariff rate they are on, subject to RPI revision. Also, any new installations and rates that the government may set for these and any changes to the administration allowances. This will include the costs of any exported generation.
There was a ten-fold increase in the installed capacity in the charging year 2012/13 which made forecasting very difficult. However, following the introduction of much reduced tariffs for new installations by the Government we are now seeing a more restrained take-up enabling us to make more stable predictions. The cost to all suppliers is a unit based charge and is calculated after the charging year.
SSE like all suppliers is exposed to this increasing additional cost and, as per our standard terms and conditions, will pass this on to our customers. We will include a separate item to cover FITs in all contract offers and subsequent billing. The flat rate charges covering 2017 to 2022 are shown below, however, for contract terms greater than 1 year an average rate will be applied.
Please also note that FITs rates are set and fixed for each contract at the point of acceptance and may vary from the FITs rates shown below.