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REA raises concerns over Government review into feed-in tariffs

Renewable Energy Association (REA) said the Government’s review into feed-in tariffs (FITs), which will scrutinise large scale solar projects, will create uncertainty for investors.

Energy Secretary Chris Huhne has today launched a comprehensive review of the Feed in Tariffs (FITs) scheme following growing evidence that large scale solar farms could soak up money intended to help homes, communities and small businesses generate their own electricity.

REA believes the FIT review announced by DECC this morning creates massive uncertainty for all photo-voltaic (PV) projects over 50kW. A wide range of schemes including those planned for schools, hospitals, and community’s look set to be caught up in the “fast track” for review, with changes to be implemented “as soon as possible”.

“Developers of PV installations upwards of 50kW, will be left hanging in the air,” said REA chief executive Gaynor Hartnell.

“Bands up to 4kW can be moreconfident Tariff levels will remain unchanged until April next year – but developers of schemes from 10kW to 50kW in particular will be wondering how the announcement applies to them.  DECC expresses concernabout field arrays but it is fast-tracking far more than the stand-alone field arrays.  In our view this has escalatedthe uncertainty.”    

Since FITs began last year it has been a huge success at stimulating green growth, driving innovation, creating jobs and cutting carbon.

More than 21,000 installations have been registered to date. The vast majority of these are domestic installations, including solar panels, wind turbines and microhydro plants.

Last year’s Spending Review committed government to save 10% of the costs of FITs in 2014-15 through a review due to start in 2012 or earlier if uptake exceeded Government expectations. Because of the risk of an increasing number of large scale solar farms which could push FITs costs off track, and the need to give industry added certainty to invest, the coalition is today announcing a comprehensive review into the scheme. We also hope to publish next month measures to support renewable heat within the budget agreed at Spending Review.

“Large scale solar installations weren’t anticipated under the FITs 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,” said Energy secretary Chris Huhne.

The comprehensive FITs 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.

Alongside the fast track review of large scale solar PV, a short study in to the uptake of FITs for farm based Anaerobic Digestion (AD) plants will also take place. Only two such projects have been accredited so far and by this point at least six were expected. The tariff rates will be examined to see if they are enough to make farm based AD worthwhile.

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 at the time will not be affected.

Total Installations to date:

  • Anaerobic digestion – 2
  • Hydro – 178
  • Micro CHP – 36
  • PV – 19854
  • Wind – 1132

The total installations have a combined capacity of 76.66MW.

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