Following the publication in July of the government’s Consultation on removing preliminary accreditation for the Feed-in Tariff Scheme (FiTs), the government has continued with its programme of reduction in support for renewables by publishing a more wide-ranging Consultation on a full-scale review of FiTs.
Of key importance to those involved in the renewables industry are the proposals for very significant reductions in some of the tariffs payable for generation of electricity from small-scale solar PV, wind and hydro schemes. These reductions would apply to new installations with an eligibility date from January 2016 onwards (so not to existing installations) and would range from between 10% and 31% for hydro, between 62% and 87% for solar PV, and between 23% and 67% for most wind, but with wind installations with a capacity greater than 1,500kW being removed from FiTs altogether. Comparison of tariffs applicable to a particular installation before and after January will depend very much on the capacity of the installation, as the tariff bands are also to be altered.
Potentially more serious, however, is the proposal to remove the generation tariff for new installations from January 2016 if the proposed cost control mechanisms (principally degression of tariffs based on previous deployment of the technologies) are considered insufficient to ensure FiTs remain affordable.
The timing of degression of tariffs for non-solar PV technologies is to be brought into line with degression of solar PV tariffs, so that all tariffs will degress on a quarterly basis, and the caps on deployment which trigger degression will be reviewed with a new limited budget in mind. It will be hoped by supporters of the industry and would-be participants that the amended degression mechanism will be sufficient to prevent the removal of the generation tariff altogether.
Other proposals made in the Consultation include the linking of tariffs to the Consumer Prices Index (CPI), rather than the Retail Prices Index (RPI) as at present (the CPI being generally lower than the RPI), and a commitment that no new technologies will be added to FiTs.
The Consultation is open for responses until 23rd October 2015 and can be accessed here.