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Future of feed-in tariff to be announced next week

Posted by Cathy Debenham on 28 October 2011 at 6:10 am

"I haven't come here to kill the [feed-in] tariff scheme, I want to fix it, enhance it and put the whole industry on a sustainable, credible economic path to a bright and exciting future," said energy and climate change minister Greg Barker yesterday, speaking at the Solar Power UK conference in Birmingham.

These words have not reassured an industry that has been humming with rumours about how deep and how soon the much heralded cuts to the feed-in tariff  will be. The domestic feed-in tariff currently pays 43p for every kWh of electricity generated by solar PV. Rumours have been circulating that it will be slashed to 9p, with 20p being the most recent estimate/leak. Sadly, the minister didn't enlighten the 1,000 anxious solar professionals about what the cuts will be, but said that the consultation will be launched next week.

With a set budget for the feed-in tariff and installations streaking ahead of expectations, everyone knows there will be reductions in the tariff. It's just a matter of how much and when. However, the industry which has expanded to employ 25,000 people over the past two years, is likely to shrink again unless the cuts are phased in gently. In response to the rumours and uncertainty the Solar Trade Association and others have launched a Cut Not Kill campaign.

Barker did give delegates a few insights into planned changes for the feed-in tariff.

"Our top priority must be to help drive energy savings to help keep bills down," he said. "We will be bringing forward proposals to ensure that all new domestic PV sites from April 2012 must meet minimum energy efficiency standards. It cannot be right to encourage consumers to rush to install what are still expensive electricity generating systems in their homes before they have thoroughly explored all of the sensible options for reducing their energy consumption first." The review will also look at how that could be extended to business premises and non domestic sites in the future.

This is something we called for in our response to the original feed-in tariff consultation, and believe that it makes sense to do the lower cost, higher return measures such as loft and cavity wall insulation (where possible) first. The key to the success of this change is in not surrounding it with bureaucracy, and making it a barrier to investment.

The plans are to have a "whole-house" approach, with the feed-in tariff working alongside the Green Deal and the renewable heat incentive (RHI). He called on the installers at the conference to embrace solar thermal (solar hot water) systems, as unlike the feed-in tariff, take-up for the renewable heat premium payments (which give a £300 up front grant for solar thermal installations until March 2012) is below expectations. However, until DECC publishes the incentive rates for the RHI proper, take-up is unlikely to increase much.

Low Carbon Communities Network and others have been By

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