4.39p/kWh Feed-in Tariff rate takes effect on 8 Feb 2016
Posted by Anna Carlini on 3 February 2016 at 9:35 am
The new Feed-in Tariff (FiT) rate takes effect on 8 Feb 2016. Any domestic solar panels installed from then onwards will receive 4.39p per kilowatt hour of renewable electricity generated. This is a 65% cut on the 12.47p it would have previously received.
The new rates follow a period of a notable increase in the number of solar panels installed between Oct-Dec 2015. This rush to install panels in time to qualify for the higher rates was not as large as expected, but was still an increase from the ordinary trend. In fact the figure was double the number of installations that were seen during the same time period the year before.
The solar industry says that this deep cut in FiTs is too much too soon. Fears have even been voiced for the future of the industry. Gabriel Wondrausch, founder of Exeter-based SunGift Energy, said "There will still be business out there, but nowhere enough to support the amount of people currently employed." According to the government's own report, over half of the jobs in the UK solar industry are at risk – that’s 18,700 employees. It is also expected that many companies will inevitably face going out of business. The beginnings of this have already been seen, with the closure of Mark Group which resulted in 1000 employees losing their job just before Christmas last year.
In addition to the grim cuts, many things still remain unclear in the new changes to policy. The introduction of a cap on FiT supported installations has caused confusion. This will see the delaying of new customers until the next quarter once one quarter's limit has been reached. Concerns have been expressed that, as things stand now, installers may not know what rates to offer their customers and homeowners may not know what their FiT rates will be. Installers will need to know which quarter their customer will qualify for in order to advise which Feed-in Tariff they will get. We are still waiting on Ofgem for more information on how this will work.
The bottom line is that this sudden withdrawal of support for renewables is not happening in other countries. Around the world more and more is being invested into renewable energies. For example, in Germany energy from renewable sources represents 27% of overall energy consumption. There, feed-in-tariffs are also used to help consumers pay for energy they produce, but in addition to that other ways of encouraging the renewable energy sector are being explored. On 20 Jan 2016, Sigmar Gabriel, the German minister for economic affairs and energy, announced that the trials for a ‘solar auction’ had been a great success, which demonstrates the country’s determination to support the industry in a way which works. And in 2014, 41% of Denmark’s power was generated by wind.
And it is not just European countries that will race ahead of Britain if our renewable energy growth slows. The worldwide market of renewables is booming, in spite of the falling prices of oil and coal. China, the Middle East and the USA have thriving industries which are growing rapidly. The UK’s solar industry is under threat at a time when renewable energy has the attention and commitment of the globe.
We cannot know for certain what will happen, but the forecast is for a very turbulent year ahead.
More information about Feed-in Tariffs on YouGen.
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