Government announces outcome of fast track review on Feed-in Tariff Scheme

The Department of Energy and Climate Change has confirmed that the proposed changes to the Feed-in Tariff scheme (FITs) will now take effect from 1 August 2011.

The announcement follows the recent public consultation on large-scale solar and anaerobic digestion. The fast-track review looked at reducing the tariffs for large-scale solar to protect the money available for small scale projects and the range of technologies supported under this scheme. The review was launched following initial evidence showing that the number of planned larger PV projects is much higher than originally expected.

From 1 August 2011, new entrants into the FIT scheme will receive amended tariffs for PV generation as set out below:

• 19p/kWh for 50kW to 150kW
• 15p/kWh for 150kW to 250kW
• 8.5p/kWh for 250kW to 5MW and stand-alone installations

This compares with the current tariffs of:

• 32.9p/kWh for 10kW to 100kw
• 30.7p/kWh for 100kW to 5MW and stand-alone installations

Solar schemes under 50kW are unaffected by the review.

Energy and Climate Change Minister Greg Barker said: "We have carefully considered the evidence that has been presented as part of the consultation and this has reinforced my conviction of the need to make changes as a matter of urgency. Without action the scheme would be overwhelmed. The new tariffs will ensure a sustained growth path for the solar industry while protecting the money for householders, small businesses and communities, and will also further encourage the uptake of green electricity from anaerobic digestion." 

Ian Holyoak, Head of Energy & Renewables team at Michelmores, commented: "The confirmation from DECC that the FITs rates will be reduced has removed any lingering doubt that investors, suppliers, installers and landowners must push through ongoing large-scale solar PV schemes before the August deadline, or suffer a substantial drop in income.

"The news is not really a surprise, but will come as a disappointment for many in the South West who had hoped that DECC would reconsider its previous announcements.

"Solar PV projects generating below the 50kW threshold will not be affected, which still allows schemes of a reasonable size, particularly where SMEs are looking to generate for their own use.

"Crucially, any changes that are implemented will not be retrospective, and so the reduced tariffs will only affect new entrants into the FITs scheme. However, a scheme needs to be 'commissioned' to qualify for original FITs rates, which leaves little time for developers to lock into the current bands and tariffs. With DECC still not having clarified fully what 'commissioned' means for the purposes of a FITs installation, the race to get the large-scale solar projects 'commissioned' prior to 1 August may go down to the wire." 

For further information, contact Ian Holyoak at ian.holyoak@michelmores.com.

See also our Energy & Renewables web page.