The new feed in tariff rates for small scale renewable energy were confirmed today by the Department of Energy and Climate Change (DECC).
The revised Feed In Tariff rates are due to be implemented on 1st August 2011.
The rate for larger scale solar energy projects of 250 kW – 5MW has been dramatically reduced from 30.7 pence per kWh to 8.5 pence. As a result the UK is unlikely to see proposals for ground based solar parks of this scale. Many in the industry believe only solar projects in the highest tariff band of up to 5kW are likely to be installed.
Conversely, as only a handful of new anaerobic digestion plants have been installed under the existing FIT tariff rate, the Government has decided the rate should be increased.
Energy and Climate Change Minister Greg Barker said:
“I want to drive an ambitious roll out of new green energy technologies in homes, communities and small businesses and the FIT scheme has a vital part to play in building a more decentralised energy economy.
“We have carefully considered the evidence that has been presented as part of the consultation and this has reinforced my conviction of the need to make changes as a matter of urgency. Without action the scheme would be overwhelmed.”
Dave Sowden, Chief Executive of the Micropower Council commented:
“This is bad news for many worthwhile projects – schools, communities, public buildings. The Government was clear from last November it intended to act on large-scale, field-based solar, but took the entire Built Environment sector completely by surprise when announcing the review, and we are disappointed it has not been persuaded to recognise the merits of projects in this sector or recognise the impact on investor confidence surprise announcements can have.
However we now need to draw a line under the fast-track review and focus on helping the Government during the forthcoming Comprehensive Review of the entire scheme so it redesigns all the tariffs and their degression principles to grow the industry sustainably, whilst living within the constraints of the available budget this side of 2015.
In the longer term, we also need to start now to build the case for a significantly more ambitious feed-in tariff scheme during the next Spending Review Period (2015 onwards) so that all forms of sustainable electricity production from buildings can be scaled up and costs brought down quickly.”
The new solar and anaerobic digestion FIT rates are outlined below:
New Solar PV
>50 kW – <150 kW total installed capacity = 19 pence/ kWh
>150 kW – <250 kW = 15p/ kWh
250 kW - 5 MW and stand alone installations = 8.5 pence/kWh
New Anaerobic digestion:
< 250 kW = 14p/ kWh
>250 kW – < 500 kW = 13p/ kWh