Feed-in Tariff Update: Government Proposes RPI to CPI Switch
If you receive Feed-in Tariff (FiT) payments for your solar, wind, or hydro system, a significant policy change is on the horizon. The UK government has launched a consultation proposing to change how FiT payments are adjusted for inflation.
The proposal is to switch from the Retail Prices Index (RPI) to the Consumer Prices Index (CPI). If approved, this change would take effect from 1 April 2026.
⚠️ Consultation Alert: This proposal is currently OPEN for public consultation.
Period: 31 October 2025 – 12 December 2025.
Why is the Government Proposing This Switch?
The government argues that RPI is an outdated statistic that often overestimates inflation. By switching to CPI, they aim to:
- Use a more accurate measure: CPI is the standard measure used for pensions, benefits, and Bank of England targets.
- Avoid overcompensation: The government believes RPI has historically paid generators more than intended.
- Reduce consumer bills: FiT payments are funded by levies on electricity bills. Reducing these costs saves money for all billpayers.
The Two Options on the Table
To implement this change, the government is consulting on two specific approaches:
Option 1: Immediate Switch to CPI
This is the simpler option. From 1 April 2026, your annual payment adjustment would simply track CPI instead of RPI. This ensures payments continue to rise, but likely at a slightly lower rate than before.
Option 2: Temporary Freeze & Gradual Realignment
This option is more complex. Tariffs would be frozen at 2025/26 levels starting in April 2026. They would remain frozen until a calculated “shadow” CPI rate catches up to the current RPI rate (estimated to take until the mid-2030s). Only then would annual increases resume.
💡 What this means: Option 1 means slower growth. Option 2 means no growth in your payments for several years.
RPI vs CPI – What’s the Difference?
| Feature | RPI (Old) | CPI (New) |
|---|---|---|
| Includes housing costs? | Yes (e.g., mortgage interest) | No |
| Inflation rate | Usually higher by 0.5–1% | Generally Lower |
| Status | Not a national statistic | Official inflation measure |
Who Is Affected?
This change applies to all accredited generators across Great Britain who are currently receiving FiT payments. This includes:
- Homeowners with solar PV
- Farmers with anaerobic digestion or wind turbines
- Community energy schemes
- Businesses with commercial solar arrays
What Can You Do?
The consultation is OPEN until 12 December 2025. If you have strong views on this proposal—whether you support the move to a fairer index or worry about the impact on your returns—you can have your say.
- Review your FiT contract: Understand how much of your income is tied to inflation indexing.
- Model your future cash flow: Adjust your forecasts using CPI (approx. 2-2.5%) instead of RPI.
- Submit your response: You can respond directly via the official government website below.
Frequently Asked Questions (FAQ)
Will my current FiT rate decrease?
No. Your base rate won’t verify be cut. However, future increases will likely be smaller (Option 1) or paused entirely for a period (Option 2).
Is this change retroactive?
No. It is proposed to take effect from 1 April 2026. Payments received before then are unaffected.
Why is the government doing this now?
With energy bills high, the government is looking for ways to reduce the “policy costs” added to consumer bills. Saving money on the FiT scheme reduces the overall levy.
Adding Battery Storage to a FiT System? Watch This:
Maximise Your Solar Investment
While FiT rates may change, you can still boost your returns by adding battery storage or upgrading your system.
