Certainty For Solar In The UK?
DECC is introducing regulations to put the Feed-in Tariffs
(FITs) scheme on a more predictable, certain and sustainable footing for
householders, businesses and the solar industry.
Following detailed consultation with industry and consumers,
the Government is introducing a range of changes to the FITs scheme with effect
from 1 August to provide better value for money and allow businesses and
householders to plan with confidence. This is good news for the industry and for consumers and will ensure
that as many people as possible benefit.
The tariff for a small domestic solar installation will be
16p per kilowatt hour, down from 21p, and will be set to decrease on a 3 month
basis thereafter, with pauses if the market slows down. All tariffs will continue to be index-linked
in line with the Retail Price Index (RPI) and the export tariff will be
increased from 3.2p to 4.5p.
The new tariffs should give a return on investment (ROIs) of
over 6% for most typical, well-sited installations, and up to 8% for the larger
bands.
The industry has been very successful in bringing solar
technology costs down swiftly over the last two years and the improved scheme
will reflect this trend as well as recognise the increasingly significant place
solar PV can now have in local renewable electricity generation.
Energy and Climate Change Minister Greg Barker said: "Today
starts a new and exciting chapter for the solar industry. The sector has been
through a difficult time, adjusting to the reality of sharply falling costs,
but the reforms we are introducing today provide a strong, sustainable
foundation for growth for the solar sector.
"We can now look with confidence to a future for solar which
will see it go from a small cottage industry, anticipated under the previous
scheme, to playing a significant part in Britain's clean energy economy.
"I want to send a very clear message today. UK solar
continues to be an attractive proposition for many consumers considering micro generation
technologies and that having placed the subsidy support for this technology on
a long-term, sustainable footing, industry can plan for growth with
confidence."
Alan Aldridge, Chairman of the Solar Trade Association said:
"We broadly welcome many of the Government's decisions for how solar PV will be
treated in the FITs scheme and wholeheartedly welcome the inclusion of Solar in
DECC's updated Renewables Roadmap; this should reassure consumers and solar
companies alike that the Government recognises and stands behind a major role
for the solar industry.
"Despite the currently slow market, the industry can have
some confidence that the new Tariffs are tight but workable. Householders
should be reassured the new Tariffs will provide more attractive returns than
can be found elsewhere today. The STA is now keen to work with Government to
get this positive message out."
CHANGES TO SOLAR
FEED-IN TARIFFS
Tariffs for solar pv
installations to be reduced from 1 August:
- 16p/kWh for household scale solar PV installations to reflect fall in cost of the technology, delivering a return of
about 6% for a typical installation. - Tariffs for larger installations also to be
reduced to reflect cost reductions but with most tariff cuts lower than
proposed in February. - Reductions to apply to new installations from 1
August, instead of 1 July as proposed, in recognition of low uptake from 1
April and providing time for industry to adapt.
Multi installation
tariff increased to 90% of standard tariff
- Organisations with more than 25 solar pv
installations will get 90% of the standard applicable tariff, increased from
80%, reflecting new evidence on costs involved for these projects.
Reduction in tariffs
over time in line with uptake of FITs scheme
- Ensuring solar PV is not over subsidised.
- Average tariff reductions of 3.5% every 3
months, reductions will be bigger (up to 28%) if there is rapid uptake. - Tariff cuts will be skipped (for up to 2 quarters)
if uptake is low. - Uptake in 3 different bands (domestic (size
0-10kW), small commercial (10-50kW) and large commercial (above 50kW and
standalone installations) will determine the quarterly reductions within those
bands.
Increase export
tariff from 3.2p to 4.5p/kWh
- To better reflect the real value of electricity
exported to the grid.
RPI index-linking of
generation tariffs to be retained
- Reflecting the high value investors place on
this element of the FITs scheme.
Scheme lifetime
reduced from 25 to 20 years for new solar installations
- Reducing the lifetime costs of the scheme and
bring solar in line with most other technologies supported under FITs. - Tariffs for installations which do not meet the
energy efficiency requirements will mirror the tariffs for standalone
installations - Ensuring energy efficiency is still encouraged
as tariffs are reduced.
STRATEGY FOR SOLAR
Government sees a bright future for solar here in the UK and
expects to reflect the growing role of solar power in the UK's energy mix in
its updated Renewable Energy Roadmap later this year. Uptake by 2020 will however depend on when
solar PV becomes viable with little or no subsidy and 22GW by 2020 is an
achievable ambition if industry can get its cost down quickly. That is why Government has also launched a
solar PV cost reduction taskforce in partnership with industry to help drive
down costs down faster while maintaining safety and standards.
DECC is also pleased to welcome plans being brought forward
by Cornwall Council and the Building Research Establishment to set up a
National Solar Centre in Cornwall.
Energy and Climate Change Minister Greg Barker said: "I am
very happy to see a proposal for the creation of a National Solar Centre in
Cornwall, led by the Building Research Establishment."
Cllr Alec Robertson, Leader of Cornwall Council said: "The
FITs scheme allowed many people across Cornwall to learn about renewable
energy, especially solar power, and Cornwall would welcome the establishment of
a new National Solar Centre that will be
at the heart of the bright future for PV in the UK. We're pleased that DECC has
announced changes that improve the predictability for the FITs scheme"
FITS CONSULTATION 2B
Decisions following the consultation on the other
technologies under FITs will be announced in the summer.
The Feed-in Tariffs (FITs) scheme provides a subsidy, paid
for by all consumers through their energy bills, enabling small scale renewable
and low carbon technologies to compete
against higher carbon forms of electricity
generation.
