Renewables Obligation (RO) scheme: indexation changes
Read the full outcome
Detail of outcome
This consultation invited views on 2 proposals:
- Option 1: to change indexation from the retail prices index (RPI) to the consumer prices index (CPI)
- Option 2: to initiate a temporary freeze of the Renewables Obligation (RO) buy-out price at the 2025 to 2026 level, taking effect from April 2026 and a gradual realignment with CPI
The government response confirms our decision to pursue Option 1.
From April 2026 the RO buy-out price will be adjusted annually in line with CPI. This will come into effect for the next RO compliance year (2026 to 2027).
Next steps
To change the inflation indexation metric for the RO scheme for the 2026 to 2027 financial year, the UK government, Scottish Government, and Northern Ireland Executive will take the necessary changes to legislation.
Following this, Ofgem will publish an updated CPI-indexed buy-out price for the 2026 to 2027 compliance year, along with any supporting material.
Detail of feedback received
We received 247 responses to this consultation, representing a wide range of stakeholders, including:
- generators
- suppliers
- investors
- consumer groups
- trade associations
- private individuals
Original consultation
Consultation description
Update 26 November 2025
We have extended the consultation closing date from 28 November to 2 December 2025 to allow more time for responses.
The UK government is proposing changing the inflation indexation calculation for the Renewables Obligation (RO) and Feed-in Tariffs (FiT) schemes, from the Retail Price Index (RPI) to the Consumer Price Index (CPI):
- for the Renewables Obligation (RO) scheme, the inflation indexation calculation for the buy-out price would change from RPI to CPI
- for the Feed-in Tariffs (FiT) scheme, the annual tariff adjustment calculation would change from RPI to CPI
The indexation change would come into effect in April 2026 and would affect all UK generators on the RO and FiT schemes.
Changes to inflation indexation would lower the annual subsidy uplifts for generators and reduce the cost of these schemes for UK consumers.
Respond to the RO scheme consultation via the link on this page.
Respond separately to the FiT scheme consultation
Documents
Ways to respond
Updates to this page
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Government response published.
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Consultation extended to allow more time for responses.
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First published.