FiT review puts renewable energy under threat

An early review of Feed in Tariffs announced by Energy Secretary Chris Huhne is targeted at avoiding large-scale solar projects soaking up the available funds. Mr Huhne said, ‘Large-scale solar installations weren’t anticipated under the FiTs scheme we inherited, and I’m concerned that this could mean that money meant for people who want to produce their own green electricity has the potential to be directed towards large-scale commercial solar projects.’

The review will be completed by the end of 2011, with tariffs unchanged until April 2012 — unless the review reveals a need for greater urgency.

There will be immediate consideration of large-scale solar projects over 50 kW, with a view to making any resulting changes to tariffs as soon as possible, subject to Parliamentary scrutiny as required by the Energy Act 2008.

Any changes to FiTs will not be retrospective and will only affect new entrants to the scheme. Over 21 000 installations have been registered for FiTs to date. The vast majority are domestic installations, including solar panels, wind turbines and micro-hydro plants.

Among reaction from the industry is M&C Energy Group, which purchases £6.25 billion of energy a year for clients, cautioning against tariffs that are too generous and go directly to big business.

The group’s energy analyst David Hunter said, ‘Feed-in tariffs have potentially massive cost consequences long term. Germany has had them for a decade and has successfully increased the share of power production coming from wind and solar power. However, its energy prices are among the highest in the EU, and [German Chancellor] Angela Merkel is now concerned about energy costs and business competitiveness.’ Germany expects to have spend Eu 46 billion in solar subsidies by 2030, and its costs of feed-in tariffs are expected to rise by 72% in 2011 alone.

He also points out that the very generous Spanish feed-in tariffs for solar forced its government to renege on the price guarantees.

The Solar Trade Association has expressed dismay at the review of the FiTs, asserting that ‘it brings into question the Government’s true commitment to renewable energy’. The association says, ‘To date this year [early February] less than 35 MW of new PV systems have been installed.’

Commenting on large-scale solar plants, the association claims that ‘not one of these systems has been installed in the UK, and deployment is likely to be hampered by grid connection and planning issues anyway’.