Government confirms new Feed-In-Tariff rates

Domestic solar installations are set to see Feed-In-Tariff (FIT) rates reduced to 4.39p, the Government has today confirmed.

The Department for Energy and Climate Change (DECC) has published its responses to two consultations today.

The first is their response to the consultation on new Feed-In-Tariff rates for solar and other forms of renewable energy, while the second covers the Renewables Obligation (RO) for solar.

DECC had originally proposed a FIT rate of 1.63 per kilowatt for solar systems under 10kw, but the response shows the Government has increased this to 4.39p.

But the tariff for large-scale solar systems, over 1,000 kw will be lower than originally expected – at 0.87p.

The new FIT rate for wind farms under 50kw will be 8.54p and for hydro under 100kw, it will be 8.54p.

The new tariffs will come into force from 8 February, and the deadline for projects to receive the current higher tariffs is now 15 January.

The Government also confirmed today it is to closed the RO across Great Britain to new solar PV capacity at 5MW and below from 1 April 2016.

Grace period arrangements will also be introduced to protect developers who made a significant financial commitment on or before 22 July 2015 and developers who experience grid delay beyond their control.

“We have to get the balance right and I am clear that subsidies should be temporary, not part of a permanent business model,” said Energy Secretary Amber Rudd.

“When the cost of technologies come down, so should the consumer-funded support.”

The Renewable Energy Association’s Head of Policy and External Affairs, James Court, added: “The Government have taken on board many of the common-sense suggestions from the REA and wider industry, such as bringing back pre-accreditation for long lead schemes, reallocating budgets from under deployed technologies and increasing deployment caps for solar.

“The tariffs are still very challenging and whilst the changes will help save some in the industry it remains that many will be exiting. But this is an improvement, and may still provide the base to get to post-subsidy.”

The Chief Executive of the Solar Trade Association, Paul Barwell, said the Government had “partially listened” to industry concerns.

“It’s not what we needed, but it’s better than the original proposals, and we will continue to push for a better deal for what will inevitably be a more consolidated industry with fewer companies,” said Mr Barwell.

“However, in a world that has just committed to strengthened climate action in Paris and which sees solar as the future, the UK Government needs to get behind the British solar industry. 

“Allocating only around 1% of its clean power budget to new solar is too little, particularly when solar is now so cost-effective. Poor ambition for solar risks missing out on not only our renewable energy targets in the UK, but on the world’s greatest economic opportunity too.”

Acording to the Government’s own Impact Assessment between 9,700 and 18,700 solar jobs could be lost as a result of the changes to the Feed-in Tariff for solar.

"These short-sighted cuts will place big limits on our solar industry and lead to job losses,” said Labour’s Shadow Energy Secretary, Lisa Nady.

“These cuts stand in stark contrast to the generous handouts Ministers recently announced to dirty diesel generators.”

Jamie Hailstone is a freelance journalist and author, specializing in local government and energy issues