Anger and anxiety is response to PV feed-in tariff review

But do other renewable technologies stand to benefit?

1 November 2011

On 31 October 2011 the Department for Energy and Climate Change announced a consulation into solar PV feed-in tariff rates (see www.decc.gov.uk/fits).

In particular it proposed

  1. A reduced rate of 21p/kWh (down from the current 43.3p/kWh) for small-scale (less than 4kW) solar PV installations, with tariffs to be introduced from 1 April 2012 and affecting all installations with an eligibility date on or after 12 December 2011. The proposed new tariff rate will increase the pay-back period of a 'typical' domestic solar PV installation from 11 to 20 years, and is designed to provide householders with a rate of return of around 4%.
  2. A requirement for the owner or occupier to meet certain minimum energy efficiency standards or accept a lower tariff.

The first of these proposals has sparked a wave of anger in the UK's young (but hardly embryonic) solar industry and more widely among proponents on renewable energy. Other organisations have been more supportive.

The consultation will also look at amending the feed-in tariff scheme to specifically benefit 'real communities' (subject to  definition) but this element of the review has apparently been replaced by a proposal to 'consider introducing new multi-installation tariff rates for aggregated solar PV schemes'.

The government had been under fire from certain quarters who argued that feed-in tariffs were adding unacceptably to domestic electricity bills because the power companies who are obliged to fork out the feed-in tariff to people who invest in solar, simply recoup the cost from other consumers. Whilst this is true in principle, the amount that each household was surcharged by their electricity supplier is reckoned to be less than £10 a year.

Rachel Coxcoon, CSE's Head of Local and Community Empowerment, said: "Many communities are looking at solar projects, as these offer an option for a straightforward ‘starter’ project, and for them this announcement will be very unsettling.

"However, the fact remains that there are more cost-effective way of generating renewable electricity than solar PV and the government has had to make a difficult decision here to prevent the entire FITs scheme being overwhelmed by payments on solar projects, many of which are profit-making enterprises by entrepreneurs who are undertaking major ‘rent-a-roof’ schemes. The silver lining might be that this change encourages more community energy groups to look at the option of wind energy or anaerobic digestion, which cut much more carbon per pound invested, and generate more cash that can be used for other community benefits."

Read more about feed-in tariffs here, or see our video: 'Feed-in tariffs and other finance streams' on YouTube.


Photo: Michael Trolove | from geograph.org.uk | reproduced under creative commons

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