Scotland will switch the Renewables Obligation (Scotland) to consumer prices indexation from 1 April 2026, covering both the buy-out price and the mutualisation cap. The change follows a joint consultation with UK and Northern Ireland counterparts and cleared parliamentary scrutiny in Edinburgh. Officials frame it as a standardisation step for a scheme still handling large compliance volumes. (parliament.scot)

The RO’s mechanics remain familiar: suppliers either present Renewables Obligation Certificates for each megawatt hour supplied or pay a set buy-out price. Ofgem confirms the 2025–26 buy-out price at £67.06 per ROC until 31 March 2026, and has illustrated how CPI would set the 2026–27 price slightly below an RPI-based figure using 2025 inflation (CPI £69.34 vs RPI £69.81). The CPI-indexed rate for 2026–27 will be published by 1 April 2026. (ofgem.gov.uk)

Why walk away from RPI? The UK Statistics Authority has repeatedly warned that RPI has technical weaknesses and should not be used to measure changing prices, while the Office for National Statistics discourages its use and notes it typically runs higher than CPIH. Aligning RO indexation with CPI also matches the Contracts for Difference and Capacity Market frameworks. (uksa.statisticsauthority.gov.uk)

For households and small businesses, the signal is steady rather than sensational. Because CPI tends to be lower than RPI, the buy-out price and the mutualisation cap should rise more slowly than they would have under the old method-moderating scheme cost growth that suppliers ultimately recover from bills. Government’s response sets this objective plainly. (ons.gov.uk)

Scale matters. Ofgem’s illustration implies a 47 pence-per‑ROC gap between CPI and RPI for 2026–27. That looks marginal, yet across the compliance books of a mid‑sized supplier-or a generator portfolio selling hundreds of thousands of certificates-these differences compound into material year‑on‑year cash effects. (ofgem.gov.uk)

For projects already accredited, the policy tune doesn’t change how support is earned. The RO closed to new capacity on 31 March 2017 and accredited stations typically receive support for up to 20 years, with no ROCs after 31 March 2037. Investors should refresh revenue cases, covenant headroom and any PPA floors that reference the buy‑out price trajectory. (ofgem.gov.uk)

On scheme resilience, mutualisation remains the backstop when suppliers default. Ofgem’s reports record shortfalls that have triggered mutualisation in recent years, and the current Scotland thresholds and ceilings for 2025–26 sit at £8.2 million and £40.4 million respectively. Indexing these limits to CPI should temper their growth without weakening protection for participants. (ofgem.gov.uk)

The change also reduces basis risk for investors. Ministers argue that confidence in a stable, consistent framework is what unlocks lower financing costs-and, ultimately, lower bills. Bringing the RO into line with CPI, already standard across government support schemes, simplifies long‑term planning for lenders and asset owners. (gov.uk)

If you run a supply business, bake CPI into 2026–27 budgets now, revisit ROC procurement versus buy‑out choices, and re-check exposure to mutualisation across the compliance year. If you finance or operate RO projects, update model dashboards to a CPI track, review DSCR under slightly lower indexation, and speak with offtakers about any clauses that still reference RPI.

Bottom line: this is a clean, statistics‑led fix to a mature policy that still underpins a significant share of clean power while Scotland targets up to 40 GW of offshore wind by 2040. Slower indexation growth trims costs at the margin and keeps the RO predictable as it runs off-quiet progress that helps the transition stay affordable. (scottishrenewables.com)