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UK to slash tariffs for large photovoltaic schemes

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71% cut in support for solar farms; increased support for AD

18-Mar-11 

A fast-track review by the Department of Energy and Climate Change (Decc) has proposed slashing feed-in tariff (FIT) rates for photovoltaic installations with a capacity above 50kW. The proposals, out for consultation until 6 May, have been described by industry representatives as "strangling at birth".

Decc set out the terms of reference for a review of the FITs regime in February, with the aim of making 10% cost savings in line with commitments under the government's spending review (Environment Analyst 11-Feb-11). Alongside the main review, a fast-track review was launched to investigate the disappointing uptake of anaerobic digestion (AD) projects and larger than expected uptake of large-scale PV.

The proposals, which do not affect household-scale projects, apply to PV projects of 50kW capacity and above:

  • Projects sized at 50-150kW would receive 19p/kWh. This represents a cut of 38%-42% on current 2011/12 tariffs.
  • Projects between 150kW and 250kW would receive 15p/kWh, a cut of 51%.
  • Projects larger than 250kW up to the scheme maximum of 5MW would receive only 8.5p/kWh, a cut of 71%.

An important factor in the fast-track review has been an unexpectedly large number of large-scale PV projects in the pipeline, some of which have proved controversial with local communities. The Decc review states that the primary focus of the FITs scheme was meant to be non-energy professionals, especially householders and communities.

"The unanticipated prospect of larger-scale solar seems to have been driven by the costs of solar PV falling much faster than anticipated," says the review. "Global investment in production has significantly reduced costs, with emerging evidence suggesting that PV system costs are now approximately 30% lower than assumed in the original FITs modelling."

The Renewable Energy Association reacted with horror to the Decc proposals. "This is far worse than anticipated," said Ray Noble, REA's PV specialist. "This industry has been strangled at birth."

Meanwhile, Decc's proposals on AD are less generous than the industry had been hoping:

  • Projects smaller than 250kW will receive 14p/kWh, an increase of 21%.
  • Projects between 250kW and 500kW will receive 13p/kWh, an increase of 13%.
  • Larger projects up to 5MW in size will continue to receive 9p/kWh (no change).

Decc notes that to date only two AD plants have been accredited for FITs, only one of which is smaller than 500kW. The government would like to encourage farm-scale AD.

* Meanwhile, AEA has launched an online map and league table to reveal the take-up of microgeneration technology. It places the Orkney Islands, Cornwall and Aberdeenshire as the top three local authority areas. More at www.aeat.com/microgenerationindex/

AEA's latest report on the sector gives data on the first nine months of the FIT scheme, up to 31 December, with a breakdown by technology band. PV accounts for 67% of the total of 72MW installed capacity under the scheme, followed by wind at 20%, hydro at 12% and AD at 1%,

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