The UK government announced the new Feed-in Tariff (FiT) rates on December 17, cutting the rates by 64% down to 4.39 pence/kWh with a total budget of￡150 million. The final reduction is less than previously expected 87%.

The amendment was published by UK Department of Energy and Climate Change (DECC).

The FiT scheme covers households, businesses, farms that install solar panels or small wind turbines and sell additional electricity generated from the facilities while not be consumed by the owners, says Reuters. Under the new FiT rates, PV systems installed on rooftops of households will receive subsidies 65% less than they currently have.

While the amendment to the feed-in tariff order is to be laid immediately, given the Christmas parliamentary recess the changes cannot come into effect until 8 February 2016. In order to protect the new budget allocation of £100 million, DECC has elected to enact a four-week pause on new feed-in tariff installations which will run from 15 January to 8 February 2016, noted PV Tech.

PV installations completed between January 15, 2016 and February 8, 2016 will be eligible for the new 4.39pence/kWh rate. In addition, the 4.39p rate will run officially from February 8 to March 31 2016. The FiT rates will decrease quarter by quarter until 2019.

According the impact assessment conducted by DECC, the new FiT rates could cut approximately 5.2GW of domestic installation and 18,700 jobs.

The FiT reduction is partially due to UK’s target to prompt wind power, pointed out an analyst at EnergyTrend.