DECC consults on major 'FiT' changes

In a further blow to the renewable energy sector, the DECC (Department of Energy & Climate Change) has issued a consultation on its review of the Feed-in-Tariff (FiT) scheme, proposing a set of measures to control the schemes costs.

Amongst the most challenging proposals for the sector are major cuts in tariffs for small scale solar generators of around 80% and potentially the removal of generation tariffs for new applications from January 2016.

Urgent cost control

The proposed measures are to control costs on new FiTs expenditure within a capped budget of between £75m-£100m by 2018/19.  If cost control measures are not implemented or effective in ensuring that expenditure under the scheme is affordable and sustainable, the Government proposes that the only alternative would be to end generation tariffs for new applicants as soon as legislatively possible, which could be January 2016.

The context for the proposed cost control measures is an anticipated over-spend on the Levy Control Framework budget, which aims to control overall impacts of renewable energy support measures on consumers bills.  One outcome of the proposals could be a rush to complete renewable energy schemes before the new measures come in, followed by a severe reduction in activity as cuts bite.

Critical response

Not surprisingly, the industry response has been critical with Mike Landy, Head of Policy at the Solar Trade Association, saying: "The proposals put forward by the Government, which will now undergo a period of consultation, would be hugely damaging for the UK solar industry and we are now consulting quickly with our member companies as to how to respond.”

For more information, help or advice please contact Andrew Davison on 0191 211 7950.