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First review of feed-in tariff announced

Posted by Cathy Debenham on 8 February 2011 at 8:08 am

Energy secretary, Chris Huhne has announced a comprehensive review of the feed-in tariff to take place this year - a year earlier than scheduled. Rates are expected to stay the same until April 2012.

Since the introduction of the feed-in tariff in 2010, more than 21,000 installations have been registered. Most of these are domestic installations with the vast majority being for solar PV panels. However, Huhne is concerned that the growing number of solar farms thought to be seeking planning permission might bust the budget for feed-in tariffs (the size of the budget remains unknown).

"Large scale solar installations weren't anticipated under the feed-in tariff 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 Chris Huhne.

The review will assess all aspects of the scheme by the end of the year. Tariffs will not change until April 2012 "unless the review reveals a need for greater urgency". However, there is going to be a fast track of solar projects over 50kW, with a view of changing tariffs "as soon as practical, subject to consultation and Parliamentary scrutiny".

Domestic installers in the smallest band (<4kW) can be pretty confident that tariff levels won't change before April 2012 according to the Renewable Energy Association. But it warns that developers of schemes from 10 - 50kW face uncertainty as DECC is "fast-tracking far more than the stand alone field arrays".

While in the long term this review may create stability for the industry to invest and grow, it is at the expense of another year of uncertainty and instability. And this comes less than a year after the introduction of the scheme. It seems at odds with the Government's desire to see growth in the economy, and its pledge to be the greenest government ever.

People who are already registered on the feed-in tariff scheme do not need to worry. Chris Huhne confirmed that the review will only affect new entrants to the scheme. If you're thinking about going ahead, and want to get the best possible return on your investment, there's no time like now!

The review will also focus on why the take up of farm-scale anaerobic digestion has been so low. Installations under the feed-in tariff so far have a combined capacity of 76.66MW. Solar PV is much the most popular, with the breakdown as follows:

  • Anaerobic digestion – 2
  • Hydro – 178
  • Micro CHP – 36
  • PV – 19,854
  • Wind – 1,132
Photo by John Lawlor
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Comments

2 comments - read them below or add one

Cathy Debenham

Cathy DebenhamComment left on: 14 February 2011 at 11:37 am

I don't think that when the contract is signed is relevant. The key date is when the system is commissioned, and approved by MCS. Watch out for tomorrow's blog, which will update a bit on the feed-in tariff review - but for installations over 50kWp, it's all a bit up in the air at the moment.

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sj-construction-sl1-6ee

SJ ConstructionComment left on: 12 February 2011 at 8:59 am

Hi ,

Heard rumours that PV installation contracts need to be sign by April this year to garantee current FITs rate.

Anybody heard similar ? May be just dodgy scare mongering to get clients to sign up sooner rather than later .

cheers Jim

 

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