Feed in Tariffs: Changes to Inflation Indexation
This consultation is open for responses
Respond to this consultationSummary
DESNZ proposes switching from RPI to CPI for inflation indexation of Renewable Obligation buy-out prices and Feed-in Tariff payments. CPI typically runs 0.5-1 percentage point below RPI over time. The change would reduce annual uplifts for both schemes, affecting existing contract holders.
Why it matters
This reduces returns for existing RO and FiT generators by switching to a lower inflation measure. The proposal socialises the benefit across consumers while concentrating costs on project investors who built under different indexation assumptions — a retrospective change to agreed terms.
Key facts
- •RPI-CPI differential typically 0.5-1 percentage point annually
- •Affects buy-out price indexation for RO scheme
- •Affects annual tariff adjustments for FiT scheme
- •Separate consultations for RO and FiT changes
Areas affected
Related programmes
Memo
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 Read the [FiT consultation document](https://www.gov.uk/government/consultations/feed-in-tariffs-fit-scheme-indexation-changes) on GOV.UK. Respond separately to the [RO consultation](https://www.gov.uk/government/consultations/renewables-obligation-ro-scheme-indexation-changes) on GOV.UK.