Following an in-depth review, the U.K.'s Department of Energy and Climate Change (DECC) has announced a new plan for the country's solar feed-in-tariff (FIT) program that emphasizes long-term stability and certainty.
‘Instead of a scheme for the few, the new improved scheme will deliver for the many,’ said Minister of State Greg Barker in a statement. ‘Our new plans will see almost two and a half times more installations than originally projected by 2015, which is good news for the sustainable growth of the industry.’
The schedule calls for a FIT of 21 p/kWh beginning April 1 for residential installations with an eligibility date of March 3 or later. Larger installations will be subject to steeper FIT reductions, and individuals and organizations receiving FIT payments for more than 25 PV installations will also receive a reduced FIT.
Going forward, regular additional FIT cuts will be implemented, using a method similar to the one in place in Germany. ‘In line with the evidence of falling costs for solar PV, DECC is proposing to peg the subsidy levels to cost reductions and industry growth to provide more certainty for future investments,’ the agency explained in its announcement.
The DECC has published several potential FIT reduction schedules, along with the rationale behind its overall new approach to FITs.
An building-energy-efficiency requirement has also been modified, which could prove to be a problem for some solar projects, according to Clare King, a renewable energy lawyer at U.K. law firm Osborne Clarke.
‘The added complexity and cost of achieving a pre-determined energy performance level for buildings powered by solar might prove a step too far for many potential developers,’ King said in a statement.
But for PV installations completed between Dec. 12, 2011, and March 3, 2012, the FIT amount to be awarded has yet to be determined. These projects' FITs are subject to the outcome of an ongoing legal battle between the DECC and a solar coalition over FIT cuts announced last year. Those cuts were ruled illegal by a U.K. court.
‘For struggling solar installers, uncertainty is still the order of the day, as the government remains determined to press ahead with its Supreme Court appeal,’ King noted.