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DECC proposes reduced FiT payments for larger PV schemes Government proposals to ...

DECC proposes reduced FiT payments for larger PV schemes Government proposals to reduce the financial support available to electricity generated by larger-scale solar photovoltaic (PV) schemes have been met with dismay by the solar industry. The move is designed to protect financial support for smaller-scale schemes typically associated with homes, communities and small businesses. The consultation follows the launch in February of a fast-track review into how the Feed-in Tariffs (FiTs) work for PV schemes over 50 kW in size. The Department of Energy and Climate Change (DECC) suggests there could already be 169 MW of large-scale solar capacity already in the planning system - equivalent to funding solar panels on the roofs of around 50,000 homes if tariffs are left unchanged. Larger projects could potentially soak up the subsidy that would otherwise go to smaller renewable schemes. The government is proposing reducing the support for all new PV installations larger than microgeneration size (50 kW) and stand alone (ie not connected to buildings) installations. The new proposed rates are: 19p/kWh for schemes of 50 kWto 150 kW in size; 15p/kWh for 150 kW to 250 kW; and 8.5p/kWh for 250 kW to 5 MW and stand-alone installations. These compare with the tariffs that would otherwise apply from 1 April of 32.9p/kWh for 10 kW to 100 kW; and 30.7/kWh for 100 kW to 5 MW and standalone installations. The revised tariffs are likely to apply from 1 August. Such changes are in line with amendments made to similar schemes in Europe, says DECC, where in Germany, France and Spain tariffs for PV have been reduced sharply over the past year. Unsurprisingly, the PV industry is not pleased. The Renewable Energy Association (REA) says that proposals would reduce the tariff schemes for roofmounted schemes, many of which are community and SME projects with tremendous popular support, of over 50 kWby 39-49%, making them totally unviable. The tariff for standalone schemes has been reduced by over 70%, with no transition arrangements. Gaynor Hartnell, Chief Executive of the REA said: ‘Larger PV projects are cheaper, and have a major role in driving down costs. We don’t want boom and bust in this sector either, but pulling the rug out from under the feet of those that have ventured into this market was precisely the wrong response. The UK will return to the solar slow-lane. It’s as good as a retrospective change and that does untold damage to investor confidence.’ Greg Barker, Climate Change Minister said: ‘I want to make sure that we capture the benefits of fast falling costs in solar technology to allow even more homes to benefit from feed-in tariffs, rather than see that money go in bumper profits to a small number of big investors. These proposals aim to rebalance the scheme and put a stop to the threat of larger-scale solar soaking up the cash. The FiTs scheme was never designed to be a profit generator for big business and financiers.’ The consultation also covers proposals to provide added support to farm-scale anaerobic digestion, given the disappointing uptake of such technologies to date. The government says it will not act retrospectively and that any changes to generation tariffs implemented as a result of the review will only affect new entrants into the FiTs scheme. Installations which are already accredited for FiTs will not be affected, and neither are PV installations less than 50 kW in size.

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