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Government moves to make FiTs scheme 'more predictable'

10 February 2012

The government has announced plans to ensure the future of the Feed-in Tariffs (FiTs) scheme to make it more predictable. Transparency, longevity and certainty are reported to be at the heart of the new improved scheme. It is hoped that the reforms will provide greater confidence to consumers and industry investing in renewable technologies such as solar power, anaerobic digestion, micro-CHP, wind and hydro power.

The surge of solar PV installations in the latter part of last year, largely attributed to a 45% reduction in estimated installation costs since 2009, placed a considerable strain on the FiTs budget. Climate change minister Greg Barker said the new improved scheme will delivere for the many rather than for the few. "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," he said. "We are proposing a more predictable and transparent scheme as the costs of technologies fall, ensuring a long term, predictable rate of return that will closely track changes in prices and deployment.
“I want to see a bright and vibrant future for small scale renewables in the UK and allow each of the technologies to reach their potential where they can get to a point where they can stand on their own two feet without the need for subsidy sooner rather than later.”

A tariff of 21p/kWh will take effect from April 1 2012 for domestic-size solar panels with an eligibility date on or after March 3 2012. Other tariff reductions apply for larger installations.

Properties installing solar panels on or after April 1 2012 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 is deemed "impractical"at this stage. The Department estimates 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. 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.

DECC is now consulting on a proposal that social housing, community projects and distributed energy schemes be exempt from these multi-installation tariff rates.

The tariff for micro-CHP installations will be increased.

DECC is proposing to peg the subsidy levels to cost reductions and industry growth to provide more certainty for future investments.  The aim is to ensure that subsidy levels keep in step with the market. It builds on the best of the existing German system and will remove the need for emergency reviews.

The government said it is unable to give certainty on tariff levels to people who install solar panels with an eligibility date between December 12 2011 and March 3 2012 due to ongoing legal proceedings. DECC is appealing to the Supreme Court and has until February 21 to lodge its case.

Further reading is available here (
Response to FITs Phase I consultation); here (Comprehensive Review of Feed-in Tariffs – Phase 2A: Solar PV cost control - consultation closes on 3rd April) and here (Comprehensive Review Phase 2B: Consultation on Feed-in Tariffs – Non-PV tariffs and scheme administration issues - consultation closes on 26th April).

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