Breaking News: UK Government launches FiT review

Confirming fears that have been mounting in recent weeks, Energy Secretary Chris Huhne has launched a comprehensive review of the UK feed-in tariff (FiT) scheme, following claims that large-scale solar farms could ‘soak up money’ which was reportedly intended to help homes, communities and small businesses generate their own electricity.

Since the introduction of the FiT back in April 2010, the renewables industry has grown at a tremendous rate, especially in the solar sector. The FiT has stimulated green growth, driven innovation, created thousands of jobs and cut tonnes of carbon emissions. More than 19,000 solar installations have been recorded by Ofgem, which amounts to approximately 56MW registered under the scheme.

Last year’s Spending Review committed Government to save 10% of the costs of the FiT in 2014-15 through a review due to start in 2012 or earlier if uptake exceeded Government expectations. The Government is yet to explain what this trigger point will look like, yet it has admitted that the system did not anticipate large-scale field arrays. Since plans for many of these industrial-scale projects have been submitted in recent months, the coalition is today announcing a comprehensive review into the scheme.

“The renewables industry is a vital piece in the green growth jigsaw and this review will provide long term certainty while making sure homes, communities and small firms are encouraged to produce their own green electricity.

“Large-scale solar installations weren’t anticipated under the FiT scheme we inherited and I’m concerned this could mean that money meant for people who want to produce their own green electricity has the potential to be directed towards large-scale commercial solar projects,” explained Huhne.

The comprehensive FiT review will:

·         Assess all aspects of the scheme including tariff levels, administration and eligibility of technologies;

·         Be completed by the end of the year, with tariffs remaining unchanged until April 2012 (unless the review reveals a need for greater urgency);

·         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.

The Government will not act retrospectively and any changes to generation tariffs implemented as a result of the review will only affect new entrants into the FiT scheme. Installations which are already accredited for FiT at the time will not be affected.

The DECC hopes to publish next month measures to support renewable heat within the budget agreed at Spending Review.