The DECC have just published the Feed-in Tariff decision, as well as the decision on the sub-5MW Renewables Obligation closure. The announcement comes just days after the historic Paris Agreement on Climate change was agreed at the UN conference.
As expected it’s bad news for installers and everyone connected to the domestic solar industry in the UK. The Government estimates that between 9,700 and 18,799 solar jobs could be lost as a result of the changes.
Cutting FiTs is a seemingly contradictory stance considering last week’s COP21 climate agreement where the world committed to bringing net emissions down to zero, phasing out the use of fossil fuels. Without schemes like FiTs, how are UK homes and businesses supposed to contribute to this aim?
Feed in Tariff Review
The full report is a hefty 115 pages long but we have summarised it for you below.
The decision is that they have rowed back on some of their proposals, with the final decisions as:
- Budget – no additional funds for FiTs overall, keeping with £100m.
- Tariffs (from 8th Feb 2016)
- Domestic tariff of 4.39p
- Commercial tariff (250kW) of 2.70p
- Stand-alone tariff of 0.87p
- Caps – caps forming a total 87MW per quarter. We are still working to understand the cap mechanism fully, but it does seem there is a queuing and recycling process. Preaccreditation is also to be reintroduced for >50kW solar.
- Timing – new tariffs to be brought in on 8th February.
- Pause – there is to be a pause to the scheme from 15th January to 8th February.
Consultation on a review of the Feed-in Tariff scheme – Click Here
The decision is that they will close the RO <5MW but have decided against some of the changes.
- Closure – DECC are planning on closing the <5MW RO as originally proposed.
- Banding Review – There is to be a banding review, proposed at 0.8 ROCs, from effect from 1st June 2016
- Grandfathering – Grandfathering will be removed as initially proposed.
- Grace Period – the significant financial commitment grace period will provide protection against grandfathering (as initially proposed), but also protect against the new bandings.
If you would like to view all the relevant documents for the FiTs tariff review and RO review you can find the relevant links below.
Changes to financial support for solar PV – Click Here
Mark Krull, Logic4training’s managing director said of the announcement:
“The key would be the industry accepts and is working towards a £0 support mechanism and is keen to get there so it can have a stable industry within which it can work and plan, but it has to be a reduction plan that leaves the industry intact and able to operate at a £0 support mechanism.”
“This sudden and drastic reduction puts that at serious risk and will negate all the hard work from the industry and the support from Govt if they choke off the industry now. The £1 support plan from the STA leads to a zero support outcome but at a rate the industry can work with and forward plan for.”