The Department for Energy and Climate Change (Decc) has proposed plans to slash feed-in tariffs (Fit) for small scale solar developments by over 50%.
Decc’s proposals, now subject to consultation, will introduce a new tariff for schemes up to 4kW in size of 21p/kWh, down from 43.3p/kWh. Reduced rates are also proposed for schemes between 4kW and 250kW (see below).
Climate change and energy minister Greg Barker said he wanted to avoid “boom and bust” in the solar photo-voltaic industry. “The plummeting costs of solar mean we’ve got no option but to act so that we stay within budget and not threaten the whole viability of the Fits scheme,” said Barker.
Barker added that although he “fully realised” adjusting to the new tariff would be a big challenge for many firms, the large drop in the cost of solar panels has increased companies’ rate of return. Fits were introduced last April, but the large uptake of schemes, combined with the drop panel costs, has led to a government review of the scheme.
Solar Feed-in Tariffs
|Band (kW)||Current generation tariff (p/kWh||Proposed generation tariff (p/kWh)|
|≤4kW (new build)||37.8||21.0|