On Friday 10 June, the Department of Energy and Climate Change (“DECC”) published its long-awaited response to the fast-track review of feed-in tariffs.
As expected, new generation tariff levels for solar PV installations greater than 50kW are set which will apply to all installations with an eligibility date on or after 1 August 2011. The new tariff levels are:
|
Band (kW Total Installed Capacity – TIC) |
Tariff (p/kWh) |
% Change |
|
>50 kW – • 150 kW TIC |
19.0p/ kWh |
-42% |
|
>150 kW – • 250 kW TIC |
15.0p/ kWh |
-51% |
|
>250 kW – 5 MW TIC and stand-alone installations |
8.5p/ kWh |
-72% |
The 1 August date was widely expected, and we are already seeing a surge in investors pushing through their existing projects ahead of the deadline. In order to be eligible for the existing tariffs, installations with a declared net capacity of greater than 50kW must, before 1 August 2011:
- have made an application for accreditation to Ofgem via the ROO-FIT accreditation process;
- have had the necessary industry tests in order to demonstrate that it is capable of operation; and
- have met all other relevant eligibility criteria set out in the ROO, including being capable of generating electricity on which ROCs could be issued.
There are many larger scale potential generators that have embarked on projects that will not be up and running on or before 1 August 2011, but have invested significant time and resources in developing projects. Despite heavy lobbying, DECC has decided that those installations under development will not be allowed to claim the original tariff levels under some form of transitional arrangement
DECC Minister Greg Barker emphasised that it is his view the cuts are necessary to ensure the feed-in tariff scheme retains sufficient funds to support the rollout of domestic solar installations. DECC gave an example of this, stating that just 20 5MW solar PV schemes would incur an annual cost of around £26m, which could alternatively support PV installations for over 25,000 households.
This is somewhat disingenuous, since the FITs scheme was originally never subject to a cap on spending – rather, the government suddenly announced in the Comprehensive Spending Review last year that it was cutting the available funds by 10% from c.£400m to c.£360m. It is also odd that DECC now takes such exception to these large commercial schemes; when the FITs scheme was going through Parliament last year, late in the day the government actually chose to increase the upper limit on FIT schemes from 3MW to 5MW.
Of the 442 responses regarding solar PV tariff levels an overwhelming 81% disagreed with the proposed change – hardly surprising; this was never going to be a popular move.
Anaerobic Digestion (“AD”)
Although the cuts to solar PV have grabbed the headlines, DECC also announced that AD tariffs would rise to 14p/kWh for installations with up to 250kW of capacity and 13p/kwH for installations with between 250kW and 500kW of capacity to combat the weak take up of the technology.
