Breaking News: fast-track review revealed

The news we have all been waiting for is finally out, and it’s not good. Greg Barker has revealed the scale of feed-in tariff cuts to what he says are ‘large-scale’ solar installations, and it looks like anything above 50kW is in for a rough deal.

Today’s consultation comes after the comprehensive review of feed-in tariffs was originally announced on February 7^th. At the time the Minister of State Greg Barker said the fast-track aspect of the review would show “fast-track consideration of large-scale solar projects (over 50kW) with a view to making any resulting changes to tariffs as soon as practical, subject to consultation and Parliamentary scrutiny as required by the Energy Act 2008.”

Since then the solar PV industry in the UK has joined forces to fight this decision tooth and nail, yet it seems the attempts may have been futile. The document published today outlines the following proposed new tariffs:

For large PV installations:

• >50kW – ≤150kW: 19p/kWh
• >150kW – ≤250kW: 15p/kWh
• >250kW – ≤5MW: 8.5p/kWh

The comparison can be seen in the table below.

The Department of Energy and Climate Change (DECC) fast-track announcement does not affect residential installations.

Barker justifies the proposed cuts by saying, “In these financially challenging times, it is even more important that we get the balance of the scheme right. The projections for take up of FiTs published by the previous government failed to anticipate any large or small scale non-domestic solar PV installations until 2013.”

“These projections have clearly proved to be flawed. Current market indications are that a rapid increase in the number of larger solar installations entering the scheme could distort funding for smaller and domestic scale installations as well as other technologies.”

“We must act now to ensure that the scheme continues to deliver and we are able to achieve both our Spending Review commitment to improving the efficiency of the scheme, which will deliver £40million of savings (around 10%) in 2014/15, as well as ensuring that the benefits of a faster fall in technology costs are shared as widely as possible rather than captured in higher returns for a small number of individual investors.”

The DECC will now seek views on the proposed tariffs until May 6^th 2011. Any changes agreed will only affect new entrants to the FiT scheme; the Government will not act retrospectively. It is proposed that any changes take effect from August 1^st 2011, subject to the outcome of this consultation and Parliamentary scrutiny.

The Government is also seeking views on the scope of the comprehensive review by April 12^th 2011.