Feed-In Tariff Scheme For Solar Energy

Earlier this year the Parliamentary Information Office of the Parliamentary Yearbook reported on the Governments plans for detailed consultations with industry and consumers over the planned changes to the feed-in tariff scheme for solar energy. This will form part of a major feature on environment, sustainable energy and climate change in the next edition Feed-in tariffs in the United Kingdom were first announced in October 2008 by Ed Miliband, then Secretary of State for Energy and Climate Change. He presented details of the scheme, which began in early April 2010. In March 2011 the coalition government announced that support for large-scale photovoltaic installations (greater than 50 KW) would be cut. This was in response to European speculators lining up to establish huge solar farms in the West Country, which would have absorbed disproportionate amounts of the fund. On 9 June 2011, the Department for Energy and Climate Change confirmed that Feed-in Tariffs would be cut for solar PV systems above 50 KW after 1st Aug, 2011. Many were disappointed with the decision of DECC, especially after long term consultations. In October 2011 DECC announced dramatic cuts of around 55% to feed in tariff rates, with additional reductions for community or group schemes. The cuts were to be effective from 12 December 2011, with a consultation exercise to end on 23 December 2011. This was successfully challenged in the high court by an application for judicial review, jointly made by the environmental pressure group Friends of the Earth (FoE) and two solar companies Solarcentury and HomeSun. The judgment, made by Mr Justice Mitting after a two-day court hearing, was hailed as a major victory by green campaigners and the solar industry. DECC is introducing regulations today to put the Feed-in Tariffs (FITs) scheme on a more predictable, certain and sustainable footing for householders, businesses and the solar industry. Then in May this year, following detailed consultation with industry and consumers, the Government announced the introduction of a range of changes to the FITs scheme with effect from 1 August to provide better value for money and allow businesses and householders to plan with confidence. This is good news for the industry and for consumers and will ensure that as many people as possible benefit. The tariff for a small domestic solar installation will be 16p per kilowatt hour, down from 21p, and will be set to decrease on a 3 month basis thereafter, with pauses if the market slows down. All tariffs will continue to be index-linked in line with the Retail Price Index (RPI) and the export tariff will be increased from 3.2p to 4.5p. The new tariffs should give a return on investment (ROIs) of over 6% for most typical, wellsited installations, and up to 8% for the larger bands. The industry has been very successful in bringing solar technology costs down swiftly over the last two years and the improved scheme will reflect this trend as well as recognise the increasingly significant place solar PV can now have in local renewable electricity generation.

Energy and Climate Change Minister Greg Barker said: Today starts a new and exciting chapter for the solar industry. The sector has been through a difficult time, adjusting to the reality of sharply falling costs, but the reforms we are introducing today provide a strong, sustainable foundation for growth for the solar sector. We can now look with confidence to a future for solar which will see it go from a small cottage industry, anticipated under the previous scheme, to playing a significant part in Britain's clean energy economy. I want to send a very clear message today. UK solar continues to be an attractive proposition for many consumers considering microgeneration technologies and that having placed the subsidy support for this technology on a long-term, sustainable footing, industry can plan for growth with confidence. Alan Aldridge, Chairman of the Solar Trade Association said: We broadly welcome many of the Governments decisions for how solar PV will be treated in the FITs scheme and wholeheartedly welcome the inclusion of Solar in DECC's updated Renewables Roadmap; this should reassure consumers and solar companies alike that the Government recognises and stands behind a major role for the solar industry. Despite the currently slow market, the industry can have some confidence that the new Tariffs are tight but workable. Householders should be reassured the new Tariffs will provide more attractive returns than can be found elsewhere today. The STA is now keen to work with Government to get this positive message out." Government sees a bright future for solar here in the UK and expects to reflect the growing role of solar power in the UKs energy mix in its updated Renewable Energy Roadmap later this year. Uptake by 2020 will however depend on when solar PV becomes viable with little or no subsidy and 22GW by 2020 is an achievable ambition if industry can get its cost down quickly. That is why Government has also launched a solar PV cost reduction taskforce in partnership with industry to help drive down costs down faster while maintaining safety and standards. DECC is also pleased to welcome plans being brought forward by Cornwall Council and the Building Research Establishment to set up a National Solar Centre in Cornwall. Energy and Climate Change Minister Greg Barker said: I am very happy to see a proposal for the creation of a National Solar Centre in Cornwall, led by the Building Research Establishment. Cllr Alec Robertson, Leader of Cornwall Council said: The FITs scheme allowed many people across Cornwall to learn about renewable energy, especially solar power, and Cornwall would welcome the establishment of a new National Solar Centre that will be at the heart of the bright future for PV in the UK. Were pleased that DECC has announced changes that improve the predictability for the FITs scheme Web: www.parliamentaryyearbookinformationoffice.co.uk