Member Article

Feed-in Tariff updates spark further furore

The Department of Energy and Climate Change this week announced changes to the Feed-in Tariff in a bid to restore confidence in the solar PV sector.

The latest announcements were intended to lay rest to speculation over the future of Feed-in Tariff, but industry has been dismayed to learn that DECC proposals could see further cuts to the subsidy scheme from April onwards.

Climate Change Minister Greg Barker commented, “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.

Despite Mr Barker’s comments, the Government cannot give certainty on tariff levels to people who install PV between December 12, 2011 and March 3, 2012, because of ongoing consultation.

Charles Hardcastle, senior associate in Carter Jonas’ Northern-based Energy team comments, “This is a disappointing outcome for the UK solar PV industry. The proposed alterations to FiT rates are likely to result in increased unemployment and business failures in that sector, due to the tight timescale and much reduced tariff levels going forward, unless there is a major and expedient price alteration in Capex terms, which seems unlikely”.

“In order for the industry to be sustainable, the proposed cuts in the tariff rate will necessitate further significant reductions of installer price to achieve a reasonable level of return, it’s probably “all too far and too fast’”

“With regard to non PV technologies such as hydro, AD and wind, these are generally more constrained in terms of development potential i.e. planning issues and are more site specific in project development terms making deployment more difficult as compared to solar PV.

“Such technologies appear to have a future in the UK renewables sector under the FiT, which is re-assuring especially as we have natural resources including topography, rainfall, and wind speeds to tick some of the respective technology requirements to drive a successful project forward!

“It will be interesting to see whether the alternative support mechanism for renewable energy technologies under the RO (Renewables Obligation) for which the response to the recent consultation is awaited, alters the bandings to mirror the FiT proposals, for that we shall have to wait a little longer, before the outcome is announced.”

This was posted in Bdaily's Members' News section by Tom Keighley .