DECC set to slash Feed In Tariff rates for solar
Feed-In-Tariff (FIT) rates for solar systems could be cut by more than 80% under a new Government consultation, which has been launched today (27 August).
As widely expected, the Department of Energy and Climate Change has launched an eight-week consultation on the FIT scheme, which will run until 23rd October.
According to the consultation document, the Government proposes several cuts to the current system.
At present, a solar PV system less than 4kW with an eligibility date on or after 1 October 2015 qualifies for a rate of 12.47p A system between 4kW and 50kW also gets 11.30p.
The Government proposes two new bands, with solar PV systems between 0 and 10kW getting 1.63p and those between 10kW and 50kW getting 3.69p.
FIT rates for wind and hydropower will also be cut. The current rate of 13.73p for wind systems under 100kW will be replaced by 8.61p up to 50kW and 4.52p between 50 and 1,500kW.
The proposed rate for hydro systems under 100kW will be 10.66p.
According to the consultation report, the current FITs scheme has “exceeded all renewable energy deployment expectations”, and these new measures will “limit the effects on consumers who ultimately pay for renewable energy subsidies”.
“If such measures cannot put the scheme on an affordable and sustainable footing then there should be an end to generation tariffs for new applicants as soon as legislatively possible”, the report adds. “Which we would expect to be in January 2016.”
The Solar Trade Association’s Head of Policy, Mike Landy, said the proposals would be “hugely damaging” for the UK solar industry.
“We will provide a detailed response shortly, once we have considered the proposals in more detail,” said Mr Landy.
“However, we regret that proposals to suddenly cut Tariffs combined with the threat of closure of the scheme next January will spark a massive market rush. This is the antithesis of a sensible policy for achieving better public value for money while safeguarding the British solar industry.”
The Renewable Energy Association’s Head of Policy and External Affairs, James Court, said the cuts of up to 87% for domestic solar and 82% for commercial rooftops are “beyond the worst fears of many of our members”.
“It is hard to see how homeowners or businesses could see solar as an attractive option for the foreseeable future following these disproportionate cuts,” said Mr Court.
“Solar has come down in cost so dramatically in the past five years and has grid parity in its sights, the industry feels like it’s having it’s legs cut away metres from the finishing line."
And the Chief Executive of Good Energy, Juliet Davenport, said the proposed cuts “mean that installing solar panels at home will no longer be attractive to British families”.
"The Feed in Tariff has transformed the way the UK generates its power over the last 3 years, with over 22% of the UK's power coming from renewables in the early part of 2015, and over 700,000 homes generating their own power,” said Ms Davenport. “It's helped to take us away from the old-fashioned fossil fuel companies to a cleaner, local, more democratic system."
"We hope the government will re-think the value that renewables bring to the market, if you do the calculations you'll see that solar actually brings down wholesale prices of energy. China and Germany are leading the way in investing in renewables, and we hope that the recent announcements by government don't see the UK fall behind again."
Jamie Hailstone is a freelance journalist and author, specializing in local government, transport and energy issues