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New feed-in tariff rates announced for large scale solar

Posted by Cathy Debenham on 13 June 2011 at 9:50 am

As expected, the Government has confirmed that it will slash the feed-in tariff for installations over 50kW from 1 August 2011. Rates for domestic sized installations, and systems installed before that date will not be affected.

The changes were defended by Greg Barker, climate change minister, who said: “The new tariffs will ensure a sustained growth path for the solar industry while protecting the money for householders, small businesses and communities and will also further encourage the uptake of green electricity from anaerobic digestion.”

Industry lobbyists and community groups didn’t agree. 81% of those responding to the Government’s proposals to reduce the rates, disagreed, but they didn’t have any impact on the final decision.

The Solar Trade Association puts the blame firmly at the Treasury’s door: “The Coalition Government has got it seriously wrong on solar,” says STA chairman Howard Johns. … “The Treasury has crippled DECC’s ability to respond to major developments in solar and DECC itself hasn’t got to grips with this technology.

“Ironically crushing solar makes zero economic sense for UK plc because it will lose us major manufacturing opportunities, jobs and global competitiveness. It also risks locking us in to more expensive energy options in future. It is inexplicable that the Treasury can be allowed to damage energy and industrial policy by taking decisions without taking into account the bigger picture. The Prime Minister urgently needs to intervene to prevent this calamity.”

This announcement came just one week after Greg Barker was quoted in the Guardian as saying: “there is one clear message that I do agree with: that solar has far more potential than has previously been thought”.

The Renewable Energy Association’s chief executive, Gaynor Hartnell does not support the cuts either. “The logical approach would have been a 25% reduction across the board, irrespective of size. This is on account of panel cost falling significantly, a phenomenon expected to continue so that PV should need no subsidy before the end of the decade.

“We think Government should increase the size of the feed-in tariff budget and encourage a healthy PV industry in the UK.” She adds that midway through this decade the REA expects the cost of electricity generated by solar PV to on a par with offshore wind.

Despite Greg Barker’s claim that the cuts will protect community microgeneration projects, they have been met with dismay by community groups, whose planned projects are no longer financially viable.

From the 1st of August 2011, new entrants into the feed-in tariff scheme will receive the following tariffs:

Solar PV:
>50 kW – ≤ 150 kW Total Installed Capacity (TIC) - 19.0p/ kWh >150 kW – ≤ 250 kW TIC - 15.0p/ kWh 250 kW – 5 MW TIC and stand-alone installations - 8.5p/ kWh

Rates for installations up to and including 50kW will remain the same for new installations until 1 April 2012, when they are likely to be reduced.

In addition to the cuts in rates of feed-in tariff for large-scale solar PV, the government announced rises to the rates for anaerobic digestion to ≤ 250 kW - 14.0p/ kWh; >250 kW – ≤ 500 kW - 13.0p/ kWh. Take up of farm-scale anaerobic digestion has been much lower than expected, and this rise aims to encourage more schemes.

Photo by Michael Mees

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