Shortly after the introduction of the Feed-in Tariff Scheme (FiTs) in April 2010 (promoting the development of small-scale renewables), the General Election resulted in a new government which, within a year, announced a comprehensive review of FiTs.

That review, which was effected in phases across 2011 and 2012, introduced tariff degression mechanisms, so that the tariffs for new installations would be adjusted periodically depending on the extent of deployment of the various technologies in the preceding period. However, to protect investor confidence,"preliminary accreditation" for FiTs was introduced, so that developers could fix their tariff in advance of installation, provided they had obtained planning permission and grid connection, to protect themselves against tariff degression for a certain period.

After a few short years of relative stability for FiTs, the general election in May 2015 has resulted in a new government which is taking steps to reduce renewables support, particularly for onshore wind energy. One of the new government's latest announcements is a Consultation on removing preliminary accreditation for FiTs.

The Consultation is quite explicit as to the government's aim of reducing certainty for developers and investors by removing preliminary accreditation, with the intended direct result of reducing deployment of small-scale renewables. The government's main thrust is protection for consumers against high energy bills, since FiTs are ultimately funded by bill payers through the levy control framework.

Interestingly, however, the Consultation states that the Department of Energy and Climate Change has"not attempted to estimate the likely impact of this change on deployment and therefore on potential savings". Arguments are also being put forward by the renewables industry that the changes being made to the support, taxes, budget and policies affecting renewables will result in thousands of job losses.

It remains to be seen what further steps the government will take when it carries out a full review of FiTs later this year. In any event, FiTs seem set to remain something of a political football.

The Consultation is open for responses until 19th August 2015 and can be accessed here.



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