The government has announced changes to the feed-in tariff scheme as planned today. The Department for energy and Climate Change today announced that its changes would render the scheme more predictable and transparent and increase its longevity.

The changes cover a range of renewable technologies including solar power, anaerobic digestion, micro-CHP, wind and hydro power and will ostensibly provide greater consumer confidence in these areas. The changes are largely down to the unexpected success of decentralised solar power production, which has boomed in response to a 45 per cent reduction in PV installation costs since 2009. The DECC said this has placed strain on the FIT budget.

The government’s decision to cut subsidies on solar feed-in tariffs before the completion of the consultation on subsidy change was met with bitter criticism and a coalition of NGOs and solar industry organisations mounted a legal challenge, which found the DECC’s practices to be unlawful. The government is challenging this ruling.

The ongoing legal debacle over solar tariffs means the government cannot comment on FIT prices for people who installed solar PV panels between the contested dates of 12th December 2011 and 3rd March this year.  

Climate Change Minister Greg Barker commented on the changes, “Today we are announcing plans to improve the Feed-in Tariffs scheme. Instead of a scheme for the few the new improved scheme will deliver for the many. Our new plans will see almost two and a half times more installations than originally projected by 2015 which is good news for the sustainable growth of the industry.”

FIT changes:

• A tariff of 21p/kWh will take effect from April 1 this year for domestic-size solar panels with an eligibility date on or after March 3 2012. Other tariff reductions apply for larger installations. The DECC announced it would peg subsidy levels to cost reductions in installation to ensure subsidy levels keep in step with the market. The department claims this builds on the best aspects of the existing German system and will remove the need for emergency reviews.
• Properties installing solar panels on or after April 1 this year will be required to produce an Energy Performance Certificate rating of ‘D’ or above  to qualify for a full FIT. The previous proposals for a ‘C’ rating or a commitment for all Green Deal measures to be installed was seen as impractical at this stage. We estimate that about half of all properties are already eligible for a ‘D’ rating.
• From April 1 2012, new ‘multi-installation’ tariff rates set at 80% of the standard tariffs will be introduced for solar PV installations where a single individual or organisation is already receiving FITs for other solar PV installations. This reflects the lower costs of such installations, as they benefit from the economies of scale. Based on the feedback received, the threshold is set at more than 25 installations. Individuals or organisations with 25 or fewer installations will still be eligible for the individual rate.

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