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The intertemporal unfairness of the feed-in tariff scheme in the United Kingdom: Catching up across regions

Bill Lee, Jinke Li Orcid Logo, Jing Shao

Utilities Policy, Volume: 97, Start page: 102044

Swansea University Authors: Bill Lee, Jinke Li Orcid Logo

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DOI (Published version): 10.1016/j.jup.2025.102044

Abstract

The Feed-in Tariff (FIT) scheme in the UK was designed to promote residential solar photovoltaic (PV) projects by offering fixed payments for electricity generated, thereby positioning solar PV as an investment opportunity for households. This study investigates the role of income in shaping the upt...

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Published in: Utilities Policy
ISSN: 0957-1787 1878-4356
Published: Elsevier Ltd 2025
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URI: https://cronfa.swan.ac.uk/Record/cronfa70253
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last_indexed 2025-09-06T05:58:04Z
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spelling 2025-09-05T10:57:13.5120123 v2 70253 2025-09-01 The intertemporal unfairness of the feed-in tariff scheme in the United Kingdom: Catching up across regions de84a531281db077a899c625f88c5a85 Bill Lee Bill Lee true false 1d12dcf12aad73117a2a5f43cf233aae 0000-0001-6325-804X Jinke Li Jinke Li true false 2025-09-01 The Feed-in Tariff (FIT) scheme in the UK was designed to promote residential solar photovoltaic (PV) projects by offering fixed payments for electricity generated, thereby positioning solar PV as an investment opportunity for households. This study investigates the role of income in shaping the uptake of solar PV under the FIT scheme and assesses the intertemporal fairness of the financial returns it provides. Using data from 323 local authority districts, the analysis focuses on two major installation peaks in 2011 and 2015, which correspond to significant changes in tariff rates. The findings reveal a positive relationship between income and solar PV adoption during the first peak, but a negative relationship in the second. This shift suggests that as installation costs declined, lower-income regions began to catch up in adopting solar PV. However, by estimating the expected (ex ante) rates of return across these periods, the study identifies a substantial decline in returns, both between the two peaks and following sharp reductions in tariff rates. These results indicate that early adopters in higher-income regions achieved significantly higher financial returns than those who adopted later. The study reveals a form of intertemporal unfairness embedded in the FIT scheme, confirming the need for more frequent and responsive tariff adjustments to ensure consistent investment incentives over time. Journal Article Utilities Policy 97 102044 Elsevier Ltd 0957-1787 1878-4356 Solar photovoltaic; Feed-in tariff; Intertemporal fairness 1 12 2025 2025-12-01 10.1016/j.jup.2025.102044 COLLEGE NANME COLLEGE CODE Swansea University SU Library paid the OA fee (TA Institutional Deal) Swansea University 2025-09-05T10:57:13.5120123 2025-09-01T16:58:01.4155223 Faculty of Humanities and Social Sciences School of Social Sciences - Economics Bill Lee 1 Jinke Li 0000-0001-6325-804X 2 Jing Shao 3 70253__35062__465ec209c9574f0f88f5973750acf084.pdf 70253.VOR.pdf 2025-09-05T10:53:56.9389104 Output 1418022 application/pdf Version of Record true © 2025 The Authors. This is an open access article distributed under the terms of the Creative Commons CC-BY license. true eng http://creativecommons.org/licenses/by/4.0/
title The intertemporal unfairness of the feed-in tariff scheme in the United Kingdom: Catching up across regions
spellingShingle The intertemporal unfairness of the feed-in tariff scheme in the United Kingdom: Catching up across regions
Bill Lee
Jinke Li
title_short The intertemporal unfairness of the feed-in tariff scheme in the United Kingdom: Catching up across regions
title_full The intertemporal unfairness of the feed-in tariff scheme in the United Kingdom: Catching up across regions
title_fullStr The intertemporal unfairness of the feed-in tariff scheme in the United Kingdom: Catching up across regions
title_full_unstemmed The intertemporal unfairness of the feed-in tariff scheme in the United Kingdom: Catching up across regions
title_sort The intertemporal unfairness of the feed-in tariff scheme in the United Kingdom: Catching up across regions
author_id_str_mv de84a531281db077a899c625f88c5a85
1d12dcf12aad73117a2a5f43cf233aae
author_id_fullname_str_mv de84a531281db077a899c625f88c5a85_***_Bill Lee
1d12dcf12aad73117a2a5f43cf233aae_***_Jinke Li
author Bill Lee
Jinke Li
author2 Bill Lee
Jinke Li
Jing Shao
format Journal article
container_title Utilities Policy
container_volume 97
container_start_page 102044
publishDate 2025
institution Swansea University
issn 0957-1787
1878-4356
doi_str_mv 10.1016/j.jup.2025.102044
publisher Elsevier Ltd
college_str Faculty of Humanities and Social Sciences
hierarchytype
hierarchy_top_id facultyofhumanitiesandsocialsciences
hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Social Sciences - Economics{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Social Sciences - Economics
document_store_str 1
active_str 0
description The Feed-in Tariff (FIT) scheme in the UK was designed to promote residential solar photovoltaic (PV) projects by offering fixed payments for electricity generated, thereby positioning solar PV as an investment opportunity for households. This study investigates the role of income in shaping the uptake of solar PV under the FIT scheme and assesses the intertemporal fairness of the financial returns it provides. Using data from 323 local authority districts, the analysis focuses on two major installation peaks in 2011 and 2015, which correspond to significant changes in tariff rates. The findings reveal a positive relationship between income and solar PV adoption during the first peak, but a negative relationship in the second. This shift suggests that as installation costs declined, lower-income regions began to catch up in adopting solar PV. However, by estimating the expected (ex ante) rates of return across these periods, the study identifies a substantial decline in returns, both between the two peaks and following sharp reductions in tariff rates. These results indicate that early adopters in higher-income regions achieved significantly higher financial returns than those who adopted later. The study reveals a form of intertemporal unfairness embedded in the FIT scheme, confirming the need for more frequent and responsive tariff adjustments to ensure consistent investment incentives over time.
published_date 2025-12-01T05:29:51Z
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