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Monthly archives: March 2011

The proposed cuts to the UK solar feed-in tariff for large scale energy producers has been met by angry reaction from the industry who believe it could prove disastrous for fledgling solar projects. The plans are for the tariffs to be cut for more large scale solar projects such as those being set up on large solar farms or on the roof space of commercial buildings. The government has made efforts to distance itself from these more industrial scale solar projects and has instead publicly favoured micro-generation solar schemes for households and local communities.

The solar feed-in tariff works by offering guaranteed, premium rates for renewable energy both used and fed back into the grid by small scale renewable energy producers. The aim of this mechanism is to encourage investment in this once expensive industry by offering the opportunity of both long term revenue generation and savings on utility bills for households. Ernst & Young who have perennially made the connection between attractiveness for investors and the strength of feed-in tariffs believe that proposed changes to the mechanism at this point could be disastrous. Ben Warren, a partner of Ernst & Young commented that,

“The whole investor market was totally disengaged as a result of the feed in tariff being ripped up,”

Certainly the correlation between the strength of the UK tariff and the potential for investors to put their cash into solar projects in this country is significant and the warning from other countries is that where tariffs are rolled back, the solar industries in those countries fail as a result shortly after. Proposed government plans currently subject to lengthy consultation are for reductions of tariff payments for solar installations falling within the 250kw to 500kw bracket. This will affect larger scale schemes such as proposed solar farms based in the West Country where large areas of agricultural land are being set aside for the installation of solar pv systems.

The basic idea behind this plan is that more subsidies which essentially come from UK energy consumers are fed into projects which benefit the whole as opposed to wealthy investors looking to make a quick buck from solar farm investments. The move will certainly fall into Cameron’s cosy idea of a ‘Big Society’ whereby community projects, social housing and local services will all benefit from the revenue which will potentially be generated by tapping into renewable energy. Government spokesman Greg Baker said that he was keen to,

“Make sure that we capture the benefits of fast-falling costs in solar technology to allow even more homes to benefit, rather than see that money go in bumper profits to a small number of big investors”.


  • Reduced tariffs for over-50kW solar
  • Increased support for farm-scale anaerobic digestion

Proposals to reduce the financial support available to larger scale solar-produced electricity have been published by the Government today as part of plans to protect financial support for homes, communities and small businesses.

The consultation follows the launch in February of a fast-track review into how the Feed-in Tariffs (FITs) work for solar photovoltaic (PV) over 50 kW after evidence showing that there could already be 169 MW of large scale solar capacity in the planning system – equivalent to funding solar panels on the roofs of around 50,000 homes if tariffs are left unchanged.

Such projects could potentially soak up the subsidy that would otherwise go to smaller renewable schemes or other technologies such as wind, hydro and anaerobic digestion.

Projections at the start of the scheme had shown no large scale solar under the FITs was expected until at least 2013.

Today’s consultation also covers proposals to provide added support to farm-scale anaerobic digestion given the disappointing uptake of such technologies to date.

Greg Barker, Climate Change Minister said:

“Our cash for green electricity scheme is a great way to reward homes, communities and small businesses that produce their own renewable power.

“I’m committed to an ambitious roll out of microgeneration technologies as part of the Coalition’s green vision of a much more decentralised energy economy.

“I want to make sure that we capture the benefits of fast falling costs in solar technology to allow even more homes to benefit from feed in tariffs, rather than see that money go in bumper profits to a small number of big investors.

“These proposals aim to rebalance the scheme and put a stop to the threat of larger-scale solar soaking up the cash. The FITs scheme was never designed to be a profit generator for big business and financiers.

“Britain’s solar industry is a vital part of our renewables future and our growing green economy. The new tariff rates we’re putting forward today for consultation will provide a level of support for all solar PV and ensure a sustained growth path for industry.

“Taking a pro-active approach to changing tariffs will allow us to avoid the boom-and-bust approach we have seen in other countries and enable us to support more homes and community schemes, and a wider range of technologies such as wind, hydro and anaerobic digestion.”

As solar PV technology has developed, its costs have reduced, and are now believed to be around 30% lower than originally projected. This means the technology does not need as much support to be competitive.

The Government is therefore proposing reducing the support for all new PV installations larger than microgeneration size (50kW) and stand alone installations. The new proposed rates are:

  • 19p/kWh for 50kW to 150kW
  • 15p/kWh for 150kW to 250kW
  • 8.5p/kWh for 250kW to 5MW and stand-alone installations

These compare with the tariffs that would otherwise apply from 1 April of:

  • 32.9p/kWh for 10kw to 100kw
  • 30.7/kWh for 100kw to 5MW and stand-alone installations

Such changes are in line with amendments made to similar schemes in Europe where in Germany, France and Spain tariffs for PV have been reduced sharply over the past year.

Alongside the fast-track review of solar, a short study has also been undertaken into the lack of uptake of FITs for farm-scale anaerobic digestion. The study suggests that the tariff for this technology is not high enough to make such schemes worthwhile. The proposed new tariffs are:

  • 14p/kWh for AD installations with a total installed capacity of up to 250 kW
  • 13p/kWh for AD installations with a total installed capacity of between 250 kW and 500 kW

These compare with the tariffs that would otherwise apply from 1 April of 12.1p/kWh for AD up to 500 kW.

Government policy is specifically to deliver an increase in energy from waste through anaerobic digestion, not to promote energy crops, particularly where these are grown to the exclusion of food producing crops. DECC is talking to Defra and others about the best way to implement controls to make sure this does not happen.

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 FITs scheme. Installations which are already accredited for FITs will not be affected. Solar PV installations less than 50kW are not affected by this fast track review.

These changes are proposed to be implemented in advance of the comprehensive review of FITs, which is currently underway and will look at all aspects of the scheme.

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“Solarfeedintariff.co.uk believe the government has made a mistake in reducing their support of the U.K’s solar industry. Solar farms would have brought the country closer to its renewable energy targets much faster and more cheaply than roof top solar alone”

 With the government and in particular Chris Huhne making it clear that they do not want the feed-in tariffs to be tapped into by large scale solar farms, the focus is very much on small scale roof mounted projects very much like the one just launched in Bournemouth. The scheme will see a number of council homes and schools across the seaside town fitted with solar voltaic panels, allowing them to benefit from savings on electricity bills as well as generate revenue from the tariff.

The feed-in tariff works by offering guaranteed, premium rates for units of electricity both utilised and fed back into the grid by small scale generators of renewable energy. The emphasis for the feed-in tariff is now well and truly on roof mounted solar projects where home owners are able to benefit from reduced utility bills and of course, in some cases a guaranteed revenue over the lifetime of the project. When the feed-in tariff was launched in April last year, the scheme being rolled out in Bournemouth is exactly what the DECC had envisaged as a way of reducing carbon emissions on a local level.

The Bournemouth solar project is being implemented in partnership between the local council and Mouchel and will create a number of jobs in the installation of the solar pv systems. Bournemouth councillor Peter Charon announced that,

“This is a fantastic scheme for the borough and clearly demonstrates our commitment to reducing our carbon footprint in Bournemouth. We are one of the first authorities in the South to install solar panels on our housing and other council buildings. I am delighted that Kingsleigh Primary School and Heathlands Primary School have elected to join the pilot scheme. Following on from the pilot we will be looking to roll it out to include all council housing, care homes and schools. The overall investment could potentially be £22million with £12million of savings by way of cheaper electricity bills and £15million by way of an income from the Government’s feed-in tariff.”