Decision made on large scale FITs proposals

Updated June 2011

Greg Barker MP, Minister of State for Energy and Climate Change announced on 9 June 2011 the Government's decision to proceed with the proposed generation tariff changes following the recent "Consultation on the Fast-track review of the Feed-in Tariffs" (FITs).

Maria Connolly, head of Renewables at TLT comments, "The reduction in future generation tariff levels for larger scale and stand-alone solar projects will be a big disappointment to the solar industry and may affect overall solar energy production. Whilst the reforms will come as a blow to the industry however, FITs continue to present opportunities for those prepared to take an innovative approach. The tariff rate for other small scale solar remains at the original level, and installations already accredited for FITs when the changes come into force will not be affected. Further, aside from the generation tariff, FIT generators may still benefit from the export tariff and reduced energy bills in utilising the energy generated on-site rather than having to purchase that supply. As energy prices increase, as does the value of this benefit. Coupled with the increased tariff for anaerobic digestion and with RHI in the pipeline, all signs are that the next year promises to be an exciting time for renewables."

The consultation on the fast-track review ran from 18 March 2011 to 6 May 2011 and sought views on proposals to change the FITs for solar photovoltaic (PV) installations larger than 50 kW and all stand-alone solar PV; and farm scale anaerobic digestion (AD) of up to 500 kW.

The proposed generation tariff changes are:

• to reduce the level of support for larger scale solar PV as follows:

>50 kW – ≤ 150 kW TIC - 19.0p/ kWh
>150 kW – ≤ 250 kW TIC - 15.0p/ kWh
250 kW – 5 MW TIC – 8.5p/kWh

• to reduce the level of support for all stand-alone installations to 8.5p/ kWh; and
• to increase the level of support for farm-scale AD as follows:

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

There will be no transitional arrangements.

Subject to any necessary state aid clearance and the parliamentary process required, new tariffs for large scale and all stand-alone solar and farm-scale anaerobic digestion are to start from 1 August 2011 for new installations.

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.”

If you have any queries on FITs or renewable energy in general, please contact Maria Connolly who will be happy to help. 

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at June 2011. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.

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