Government cuts to Solar Feed-in Tariff likely

In a further drive to cut green levies on consumer energy bills, the UK Government are launching a wide-reaching review of spending on subsidies for Renewable Energy projects, including the Feed-in Tariff scheme.

Earlier this week, Energy Secretary Amber Rudd refused to be drawn on the issue of whether there would be a continuation of the CfD (Contract for Difference) mechanism...

Yesterday, a consultation was launched that proposes to end the pre-accreditation process for Solar PV systems in excess of 50 kW. At present, developers are able to guarantee a Feed-in Tariff rate that will not alter with degression for a period of six months, providing they have planning permission and access to the Grid.

This morning, a consultation on proposals to end the RO (Renewables Obligation) scheme for small-scale Solar farms has been launched. This subsidy has already been removed for Solar farms with a capacity in excess of 5 MW. RO support for smaller installations is set to be withdrawn from April 2016.

The Feed-in Tariff scheme itself may also be under threat with the Government promising to release details of proposed changes later this Summer. When the scheme launched in April 2010, a degression model, whereby the rates reduce as the number of installations increases and system costs fall, had been discussed. However, it was hastily announced in October 2011 and implemented in December 2011 which saw a cut of over 50% to the Generation Tariff rate.

As the 2011 cuts were brought in during the consultation process, they were later found to be illegal and therefore weren't effective until March 2012, all of which caused significant damage to the Solar Industry.

It is not yet known what the Government propose for the Feed-in Tariff scheme but it is likely to be significant cuts or scrapping of the scheme altogether. Anyone considering Solar PV, whether it be a free system or a paid-for installation should therefore aim to have the work carried out this Summer.