Government seeks to protect smaller-scale solar electricity

2 min read

Proposals to reduce the financial support available to larger-scale solar-produced electricity have been published by the UK 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 50kW after evidence showing that there could already be 169MW of large-scale solar capacity in the planning system, which the Department of Energy and Climate Change (DECC) believes is 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 that no large-scale solar under the FITs was expected until at least 2013.

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

‘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,’ said Greg Barker, climate change minister. ‘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.’

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

The government is proposing to reduce the support for all new PV installations larger than microgeneration size (50kW) and standalone installations.

The new proposed rates are 19p/kWh for 50kW to 150kW; 15p/kWh for 150kW to 250kW; and 8.5p/kWh for 250kW to 5MW and standalone installations

These compare with the tariffs that would otherwise apply from 1 April of 32.9p/kWh for 10kw to 100kw; and 30.7/kWh for 100kw to 5MW and standalone installations.

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 (AD). 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 250kW; and 13p/kWh for AD installations with a total installed capacity of between 250kW and 500kW

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

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