Review of the Feed-in Tariff scheme
The Feed-in Tariff Scheme (FITs) is the Government’s subsidy scheme for generation of renewable electricity from small-scale installations. The UK is obliged by EU State Aid notification to consult on the performance of the Feed-in Tariff Scheme every three years and 2015 is the time to reconsult on aspects of FITs' performance.
Objectives of the consultation
Government is committed to moving to a low-carbon economy and meeting its carbon reduction and renewable energy targets. Alongside other measures, the Feed-in Tariff Scheme has been part of Government's progress against these objectives. FITs has exceeded all renewable energy deployment expectations but this deployment success has also come with costs exceeding the projections.
This consultation proposed a set of measures to control costs under the Feed-in Tariff Scheme, including revised tariffs based on updated technology cost data, a more stringent degression mechanism and deployment caps leading to the phased closure of the scheme in 2018-19.
It proposed that if such measures cannot put the scheme on an affordable and sustainable footing then there should be an end to generation tariffs for new applicants as soon as legislatively possible, which is expected to be January 2016.
Government reiterated its commitment to the principle of grandfathering generation tariffs under the scheme and therefore existing installations will not be affected by the proposed changes to tariffs and caps.
Government believes that implementation of the proposed changes will not adversely affect UK's ability to meet its renewable electricity and carbon reduction targets.
This consultation closed on 23 October 2015.
To download the full consultation document, along with a report on updated costs and an evidence review please follow the links below.
CIBSE believes that achieving a subsidy-free existence for renewable energy technologies in the UK is a sensible long term market objective. The key challenge is enabling a smooth transition from the current situation to the desired subsidy free scenario, providing adequate but diminishing support and maintaining a degree of predictability around that support to enable businesses to plan their operations, training and skills development, and business financing appropriately.
The current proposals for the Feed-in Tariffs scheme risk a ‘cliff edge’ situation, where the revised generation tariffs taper too quickly, cripple the renewables market, undermine growth and employment in the sector and seriously erode value for already committed taxpayer support for the sector.
Renewable energy not only has environmental, social and economic benefits, it is a key part of energy security. Relying on fossil fuels and imported fuels is not a secure strategy. Renewable energy, along with energy efficiency, is a much more resilient option and should be supported nationally.
To read the full CIBSE response please follow the link below.
Results of the consultation and next steps
The Government published its response to the consultation on a review of the Feed-in Tariff scheme on 17 December 2015. The document summarises the responses received and sets out a policy decision and next steps. To read the Government response please follow the link below.