Summary and implications

Today, 18 March, the Department for Energy and Climate Change announced their proposals to reduce the financial support available to large scale solar PV under the Feed-in Tariff Scheme.

The consultation, entitled “Fast-track review of Feed-in Tariffs for small scale low carbon electricity”, outlines the Government's proposals to reduce the generation Feed-in Tariff (FIT) available for solar PV as follows:

  • For 50kW–150kW installed capacity to 19p/kWh;
  • For 150kW–250kW installed capacity to 15p/kWh;  
  • For 250kW–5MW installed capacity to 8.5p/kWh.  

This is a reduction from the 1 April 2011 rates of 32.9p/kWh for 10kW–100kW, and 30.7p/kWh for 100kW–5MW.

The reduction in FITs will not be retrospective, meaning those who have already received accreditation for FITs will not be affected.

The proposals are intended to be implemented in advance of the comprehensive review of FITs which is currently underway, and could be imposed as early as 1 August this year, depending on the outcome of the consultation and parliamentary scrutiny.  

Defending the proposals, Climate Change Minister, Greg Barker, claimed that “these proposals aim to rebalance the scheme and put a stop to the threat of larger-scale solar soaking up the cash. The FITs scheme was never designed to be a profit generator for big business and financiers”.  

Although the scheme was not originally “capped”, as the FIT is not Government revenue subsidised, the Comprehensive Spending Review brought in the concept of a 10 per cent “saving”, of a reduction from an estimated public subsidy of £400m to £360m. The restriction on payments to larger scale PV generators is intended to help deliver this saving.  

As part of the same consultation process, the Government also proposes to increase FITs available to farm-scale anaerobic digestion to 14p/kWh for below 250kW installed capacity and 13p/kWh for 250kW–5MW installed capacity. This is an increase from 11.5p/kWh for up to 500kW installed capacity and 9p/kWh for 500kW–5MW installed capacity.

To access the consultation click here  

The deadline for consultation responses is 6 May 2011.