Feed in Tariff (FIT) Review

The Feed in Tariff (FIT) consultation has now been published, detailing Government plans to reduce support of larger scale solar PV installations like solar farms.

The review into FITs was announced in February this year, this was in response to the fear that PV installations above 50kW could potentially use up all the FIT money that would otherwise go to smaller renewable schemes on houses and small businesses. Projections at the start of the scheme had shown no large scale solar under the FITs was expected until at least 2013. The consultation also claims that costs of installing solar PV have reduced, now believed to be around 30% lower than originally projected, meaning the technology does not need as much support to be competitive.

Greg Barker, climate change minister, said he wants to make sure that the benefits of falling costs in solar technology will allow even more homes to benefit from feed in tariffs, rather than see the money go in bumper profits to a small number of big investors.
My feeling is that if the introduction of FITs has got many more homeowners and business owners enthusiastic enough to make the commitment it can only be a good thing and give encouragement to others, which if supported by the Government would further help in achieving the CO2 reduction targets. Greg Barkers words say one thing then the consultation says that because its been well supported in its take up it doesn’t need pushing anymore, on the contrary I would have thought. Fair enough if large scale installations are taking up too much of the allocated funds, but maybe this should have been made clear at the beginning?

Anyway, the proposed rates for new PV installations are:
* 19p/kWh for 50kW to 150kW
* 15p/kWh for 150kW to 250kW
* 8.5p/kWh for 250kW to 5MW and stand-alone installations

Compare these with the tariffs that would otherwise apply from 1st April of:
* 32.9p/kWh for 10kw to 100kw
* 30.7/kWh for 100kw to 5MW and stand-alone installations

So if you were planning a 60kW installation you would be getting 19p kWh instead of 32.9p, making these larger installations in effect financially unviable, and its even worse if it were to be any bigger.

Changes to generation tariffs implemented as a result of the review will only affect new applications into the FITs scheme. Installations, which are already accredited for FITs, will not be affected. Solar PV installations less than 50kW are not affected by this review so if you were planning an array on your building, chances are it will still be financially a very good move. But you will need to act quickly.
The full comprehensive review of FITs, which is currently underway will look at all aspects of the scheme and subject to the outcome of the full consultation, further changes could come in from 1st August 2011.