9 June 2011

The Government announced its new Feed-in tariffs today. Anaerobic digesters are set to benefit from the new scheme whilst larger scale Solar PVs will see a substantial reduction in FITs.

The Government has confirmed the outcome of its fast track review on Feed-in Tariff (FIT) levels of support for large scale solar and Anaerobic Digestion installations. The new tariffs for large scale and all stand-alone solar and farm-scale anaerobic digestion will come into effect from 1st August for new installations. Ministers said money from the Feed-in Tarrifs would be protected for householders, small businesses and communities and a range of technologies, ensuring scheme longevity. A spokesperson said,

“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.”

Today’s announcement follows the recent public consultation on large scale solar and anaerobic digestion which closed on 6th May 2011.  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 the number of large scale solar projects in the planning system to be much higher than anticipated.

Energy and Climate Change Minister Greg Barker said, “I want to drive an ambitious roll out of new green energy technologies in homes, communities and small businesses and the FIT scheme has a vital part to play in building a more decentralised energy economy.

"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.”

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

Solar PV:

>50 kW – ≤ 150 kW Total Installed Capacity (TIC) - 19.0p/ kWh. Previously Solar Photovoltaic with total installed capacity greater than 10kW but not exceeding 100kW was set to receive a FIT of 32.9 pence per kilowatt hour.
>150 kW – ≤ 250 kW TIC - 15.0p/ kWh. Previously Solar Photovoltaic with total installed capacity greater than 100kW was set to receive a FIT of 30.7 pence per kilowatt hour.

250 kW – 5 MW TIC and stand-alone installations - 8.5p/ kWh. Previously stand alone installations were set to receive 30.7 pence per kilowatt hour.

Anaerobic digestion:

≤ 250 kW - 14.0p/ kWh
>250 kW – ≤ 500 kW - 13.0p/ kWh

Previously Anaerobic digestion with total installed capacity of 500kW or less were set to receive 12.1 pence per kilowatt hour whilst those greater than 500KW would receive 9.4 pence per kilowatt hour.

Over 500 responses were received and carefully analysed before a decision was made regarding the change in tariffs. The fast track review showed that the number of planned larger PV projects is much higher than originally expected.  Without urgent action, the scheme would have been overwhelmed within a very short period of time. Every 5 MW large scale solar scheme would incur a cost of approximately £1.3 million per year, which means that 20 such schemes would incur an annual cost of around £26 million, money that could support PV installations for over 25,000 households. 

The changes, to take effect from 1st August for new installations and subject to Parliamentary and State aid clearance, will help manage the finances of the Feed-in Tariffs to ensure value for money for the consumer and to help protect the scheme in the future.  Solar schemes under 50kW are unaffected by this review.