Government publishes ‘alarming’ review of Feed-in Tariff scheme

Consultation process begins on long anticipated review

The Government has today published its review of the Feed-in Tariff scheme [1] for supporting small-scale renewables on homes, offices and public buildings. The scheme is dominated by solar PV installations, which is the UK’s most popular energy source according to DECC polling.

Stakeholders can now feed back to the government, with the deadline for responses 23rd October 2015.

This review has been anticipated for some time but it is the third damaging consultation in a summer of shock policy announcements that have thrown the British solar industry into turmoil. The STA published its Solar Independence Plan setting out its proposals for achieving better value for money from the Feed-in Tariffs in early June 2015. The STA has since written to the Prime Minister with 100 council leaders, community energy groups & professional bodies urging him to maintain ambition for the Feed-In Tariff scheme and highlighting the low forward costs of ambitious deployment.

Mike Landy, Head of Policy at the Solar Trade Association commented:

“The proposals put forward by the Government today, which will now undergo a period of consultation, would be hugely damaging for the UK solar industry and we are now consulting quickly with our member companies as to how to respond.”

“We will provide a detailed response shortly, once we have considered the proposals in more detail. However, we regret that proposals to suddenly cut Tariffs combined with the threat of closure of the scheme next January will spark a massive market rush. This is the antithesis of a sensible policy for achieving better public value for money while safeguarding the British solar industry.

Some useful facts and figures about the Feed-in Tariff for solar and the UK solar industry:

  •  At present the Feed-in Tariff for solar PV is 12.92p/kWh for a typical residential solar system.
  • The solar industry and its supply chain consists of 3,000 small and medium sized businesses and employs 34,000 people, providing more value to the UK economy than many other low-carbon technologies.
  • The cost of solar has come down 70% in the last five years. It is a very cheap way of delivering clean electricity going forwards.
  • Over 80% of the British public supports solar power. It is the nation’s favourite source of energy, and there was nothing in the Conservative manifesto about cutting support for solar.
  • The Solar Trade Association estimates that thanks to falling costs, the extra homes expected to go solar this year under the Feed-in Tariff scheme will cost households just an extra 50p on bills. Feed-in Tariff solar as a whole will this year account for £7 on annual household energy bills, the majority of which is due to solar that was installed before 2012 during the rush when tariffs and costs were high.
  • Over 80% of the current cost of all solar support is a result of the 2011 rush when tariffs were three times higher, and 64% of this is domestic. The total amount going to solar as a whole masks how cheap solar has become going forwards.