Government softens FIT cuts

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The Government has confirmed cuts to the Feed-in-Tariff (FIT) for small scale solar panel projects, but by less than anticipated.

The Government faced a barrage of criticism when it announced earlier this year proposals to cut subsidies by 87%.

It has stepped back from this severity, and will instead make cuts of 64%.

Commenting on the news, Regen SW chief executive, Merlin Hyman, said: “The Government has pulled back from the worst of its proposals to cut support for renewable energy following a strong reaction from communities and businesses.

“However, the strict caps to support for renewables are in painful contrast to the ambitions set out in Paris at the weekend.

The Paris agreements have fired the starting gun on the global race to clean energy and made the shift to a radically different decentralised energy system unstoppable.

“The UK clean energy sector is determined to play a leading role in that shift despite the UK Governments attempts to prop up fossil fuel and nuclear power.”

Summary of key points from Feed in Tariff (FIT) announcements:

  • The FIT budget has been confirmed as up to £100 million from January 15 up to the end of 2018/19
  • The Government response sets out measures to pause new applications to the FIT scheme from January 15 to February 8 to allow time for the implementation of cost control measures through the parliamentary process
  • Quarterly deployment caps will be introduced from February 8, 2016, including a queuing system for applicants who miss out on quarterly caps
  • A two stage re-cycling mechanism for underspent budget within the FIT scheme will be introduced
  • Tariff levels for <50kW solar PV and >50kW to 1.5MW onshore wind have received a small uplift compared to that proposed in the consultation. Other technologies and bandings have received tariff levels as set out in the consultation with the exception of standalone solar PV and hydro, which have received further reductions
  • Pre-accreditation of projects will been re-introduced from February 8
  • Generation tariff’s for extensions will be removed for all installations which commission on or after January 15
  • Government does not propose to introduce changes to the FIT scheme in relation to export tariffs, tariff indexation, competition, smart meters and grid management.
  • A separate consultation is expected for anaerobic digestion tariff levels and sustainability criteria early in 2016
  • The banding review consultation for solar PV projects of 5MW and below within the Renewables Obligation has been published today.
  • Details can be found here