DECC feed-in tariff proposals would wipe 6GW off renewables capacity by 2020/21

Proposed changes to the small-scale feed-in tariff unveiled today by the Department for Energy and Climate Change (DECC) would wipe more than 6GW off the UK’s renewable generation capacity by 2021, the majority of which would be solar.

In an impact assessment accompanying the proposals, DECC examined the likely effects its proposed drastic cuts to the tariff rate would have on figures such as deployment, the number of installations and its impact on the environment.

The headline figure contained within the assessment is that the government’s proposals would wipe around 6.1GW from the UK’s renewables generation capacity by 2020/2021, with 890,000 fewer households opting to install renewable energy technologies over the next five years.

That lack of PV deployment in the UK would have a substantial impact on carbon emission levels as other energy generation methods are used. Mid-range estimates for this state that just under 1 million more tonnes of CO2 will be emitted each year, a figure which will cost the government around £3.44 million each year under European Union rules. This cost increases to around £610 million by 2055/56.

DECC’s reasoning behind the review has always been to prevent added costs being levied onto customers through higher energy bills, but DECC’s own impact assessment states that the average household would still save less than 1% - equivalent to around £6 per year – through the changes.

Even large energy intensive industrial businesses would save just 1.4% on their energy bills using DECC’s mid-range estimates, with total savings to the Levy Control Framework estimated to be around £450 million.

DECC also warned of substantial risks to employment – termed as a “rebalancing of jobs in the sector” – although claimed it was not able to quantify the impact and has requested input from the sector through the consultation process.