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Fast track review of feed-in tariff rates for solar PV is a blow for community solar schemes

Posted by Cathy Debenham on 21 March 2011 at 10:03 am

Households are the only winners in the Government's fast-track review of feed-in tariffs for solar PV (for generating electricity). Rates for installations of 50kWp or less will not change (and on 1 April they will rise by 4.8% in line with the Retail Price Index).

In stark contrast, the rates for anything larger will be slashed according to proposals announced for consultation by Greg Barker, minister of state for energy, on Friday.

The proposed new rates for "large PV installations":

  • >50kW - ≤150kW: 19p/kWh
  • >150kW - ≤250kW: 15p/kWh
  • >250kW - ≤5MW: 8.5p/kWh

These compare with the current rates of:

  • >10 - ≤ 100kW: 31.4p
  • >100kW - ≤ 5MW: 29.3p

The narrative behind this says it is to prevent solar farms - large arrays of solar PV panels in fields - from bagging what is now a limited pot of feed-in tariff. However, it will also hit hard at community scale solar, which is surely one of the most effective ways of using the resource.

When announcing the rates to be consulted on, Greg Barker said: "We want to protect the diversity of the FITs scheme, and ensure that it benefits homes, small businesses and communities, and the full range of innovative technologies." Yet, many community projects currently being planned may no longer be viable with the new rates.

The consultation is open until 6 May, and the new rates are expected to be introduced from 1 August 2011, subject to the outcome of this consultation and Parliamentary scrutiny. The new rates will only apply to new entrants into the feed-in tariff scheme. Installations which are already accredited for feed-in tariffs at the time will not be affected.

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Comments

2 comments - read them below or add one

Jacob Eco Energy Ltd

Jacob Eco Energy LtdComment left on: 13 April 2011 at 1:29 pm

This could be such a knock to the enormous strides foreward made by green energy and especially solar power over the last year. And I agree that to restrict benefits to small projects defeats the object in more ways than the financial arena. The government will not only be stunning the massive job growth created by this industry but it will also put european targets at risk too.

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beat-n-a

BEATComment left on: 1 April 2011 at 4:31 pm

Even with the current rates, it does not make financial sense to install a system above 4kWp until you get to a system size of ~30kWp.  This does also indicate how much solar PV relies on the FIT (rather than being a truly cost effective technology in its own right).

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