The Government has taken ‘further measures’ to limit spending on the solar Feed-in Tariff scheme by scrapping the ability ‘pre-accredit’ to a fixed tariff rate before the end of a project.
The pre-accreditation process allows a developer to lock in the subsidy rate well before major construction work or installation has begun.. This means that although the subsidy level may have reduced by the time electricity begins to be generated, the developer will receive the higher subsidy agreed when the plant was in the planning stage but not guaranteed to go ahead.
The Department of Energy and Climate Change (DECC) says removing this will provide better control over spending and ensure bill payers get a better deal.
Amber Rudd, secretary of state for energy and climate change, said: “My priorities are clear: we need to keep bills as low as possible for hardworking families and businesses while reducing our emissions in the most cost-effective way.
“Our support has already driven down the cost of renewable energy significantly. As costs continue to fall it becomes easier for parts of the renewables industry to survive without subsidies, which is why we’re taking action to protect consumers, whilst also protecting existing investment.”
However, the decision – which follows proposals to cut the solar FiT scheme by almost 90% in January 2016 – has drawn criticism for not adhering to the outcome of a public consultation on the issue.
Leonie Greene, head of external affairs at the Solar Trade Association, said: “Just 16 out of 2,372 respondents supported the proposal to do away with pre-accreditation, and yet the Government has gone ahead and done it anyway. They have simply ignored the overwhelming opposition from across the renewables industry and beyond.
“This removal of pre-accreditation and the devastating cuts to tariffs are both going against the tide of public opinion where 80% of people support solar power, more than any other technology.”
The FiT scheme is paid for under the Levy Control Framework (LCF), which controls a number of subsidy schemes paid for through energy bills. The Government says its efforts to limit FiT are a consequence of recent projections estimating that these subsidies are currently set to be higher than expected.
DECC also claims that it believes it is important to limit expenditure now to build a case for the FIT scheme to continue. The department faced heavy criticism earlier this year after it scrapped the Green Deal without first making similar efforts to reduce expenditure and improve the scheme.
In its response to the public consultation, the department added: “We recognise that this decision will introduce considerable uncertainty in the short term, but consider that it is necessary to safeguard spend under the scheme while we carry out the FIT Review.”
DECC also suggested it may bring back the pre-accreditation scheme pending the outcome of the current consultation on the FiT scheme as a whole, which closes in October.
Recent data for the UK renewables sector showed 148 MW of capacity joined the Feed-in Tariff scheme in the first quarter of 2015 Q1 – solar PV contributed 143 MW of this. Solar PV represents the majority of both installations (99%) and installed capacity (84%) confirmed on FiTs.
The majority of PV installations are sub-4 kW retrofitted schemes, which increased by 32,235 (103 MW) from 2014 Q4 to bring the total to 550,154 (1,698 MW) at the end of 2015 Q1.