17 Feb 2011

Feed-In Tariffs: more confusion

Well first the good news I have been seeking funding for this years Eco-Renovation Open Homes weekend and we now have in place the first lot and also a coordinator to organise the project. So we are a goer! The weekend will no doubt be of great interest as the situation re PV and indeed all renewables is changing so rapidly.

In the Comprehensive Spending Review the government implemented a budget for the Feed-in Tariffs of £900 million from 2010/11 - 2013/4. All well and good in that it follows on from the previous government...but now comes all the uncertainty...the Minister wants to ensure that this budget is not swallowed up by one technology. He also believes the tariffs should be aimed at domestic and community-type installations, not investors - and so is determined that large-scale projects won't take a major share of the funding.

So we have a review. The review process will begin with a formal consultation document that will be published in a couple of weeks for larger projects of PV of over 50 kW and for farm-scale AD.
A comprehensive review of the Feed-in Tariffs that will run until the end of 2011 and will result in changes in tariffs and scheme design to be implemented for April 2012.

The Minister has made it clear that he was hoping to have changes to the tariff for large-scale solar from the fast-track review implemented by the Parliamentary recess on 19 July 2011. He has also said that he is expecting it to conclude that changes to tariffs are necessary to make large-scale solar projects much less attractive.

Installations generating and accredited for Feed-in-Tariffs will not be subject to retrospective changes. However, any projects in the pipeline as at the time of the changes will no longer be eligible for the tariff at the current rates. Solar projects below 50 kW and all other technologies should be 'safe' from tariff changes until April 2012 - unless evidence reveals the need for greater urgency. It is likely that the fixed-rate tariff will go and possibly be replaced by a more flexible tariff.

As Regen SW note: "The introduction of Feed-in Tariffs has had a very positive impact for businesses in the south west. The microgeneration sector has been growing rapidly and has been a rare area of economic growth through the recession."

Their main concern is that changing the goal posts so soon after the launch of the Feed-in Tariffs sends out a negative message to investors, entrepreneurs, local authorities and the public about the case for investing in all renewable energy technologies in the UK. If the rug can be pulled from one sector it can be pulled from others.

Already solar power companies are considering a legal challenge to Government plans for a review of the "feed-in tariff" (FIT) scheme. The announcement last week of a fast-track review has created "pandemonium" in the industry leaving all but the smallest domestic projects "impossible to finance" and costing Britain's stuttering economy anything up to 18,000 new jobs. See more in The Independent here.


Philip Booth said...

Caroline's Guardian blog on providing the right investment environment for low-carbon investment, esp solar PV

feed-in-tariff Charles said...

Governments should pay more attention to the future of our planet than their annual budget. Solar power has been revealed as a big challenge and Governments must cope with that. It s an expensive investment, so people need to be helped, financially.