The Feed-in Tariff (FiT) was introduced to support small-scale renewables on homes, offices and public buildings and is dominated by solar PV installations, given that solar is the UK’s most popular energy source according to public polls conducted by the Department of Energy and Climate Change (DECC). The UK government has now published a review of the FiT, setting a deadline for responses of 23rd October 2015, in which it proposes an 87 percent cut in rates under the FiT which would be imposed from 1st January 2016.
Alongside these cuts, the government is also proposing a default degression each quarter which would end FiT support for some scales of solar PV on 1st January 2019. Other scales would be subject to a further 10 percent degression, depending on deployment.
The government is also proposing to change the indexation of the FiT, moving it away from the Retail Price Index (RPI) to the Consumer Price Index (CPI). It would also remove the export tariff for projects above 50 kilowatts while lowering the export tariff for other projects and subjecting it to an annual review.
These changes would reduce UK solar generation capacity by 6 GW by 2020-21, as the government itself admits in its Impact Assessment document. Nevertheless, it justifies the move on the basis that “industry has previously proved resilient to significant changes to FiTS and has been able to adapt to previous tariff reductions and the introduction of degression. It is also threatening to close down the entire scheme in four months’ time if these measures fail to control spending.
“If cost control measures are not implemented or effective in ensuring that expenditure under the scheme is affordable and sustainable, government proposes that the only alternative would be to end generation tariffs for new applicants as soon as legislatively possible, which we expect to be January 2016, while keeping the export tariff as a route to market for the renewable electricity they generate” warns the consultation document.
Although the review has been anticipated for some time, the Solar Trade Association (STA) has expressed concern at its proposals, while Friends of the Earth went even further, calling them absurd.
"Of course the feed-in tariff should fall as solar becomes cheaper, but the government clearly plans to remove support entirely” said Alasdair Cameron, FoE Energy Campaigner. “This is politically-motivated, and will take away power from people and hand it back to big energy firms.
Mr Cameron added that policies like this will further undermine David Cameron's credibility on climate change thereby giving world leaders meeting in Paris later this year every right to call him a hypocrite.
Mike Landy, Head of Policy at the STA, predicted that the proposals would be “hugely damaging” for the UK solar industry.
“We are now consulting quickly with our member companies as to how to respond” Mr Landy said. “We will provide a detailed response shortly, once we have considered the proposals in more detail. 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.”
In June this year, the STA published its Solar Independence Plan, setting out its proposals for achieving better value for money from the FiT. The STA, along with 100 council leaders, community energy groups and professional bodies, has now written to the Prime Minister urging him to maintain ambition for the FiT and highlighting the low forward costs of ambitious deployment.
Meanwhile, posters on Twitter, with barely held back anger are talking about the government effectively killing solar generation in the UK.
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