The Government has announced a series of new reforms to its Feed-in Tariff (FIT) incentive scheme for renewable energy generation, and lodged a fresh appeal against the High Court’s ruling on solar FIT reductions.
Meanwhile, new rates for solar tariffs have been confirmed, to take effect from 1 April 2012, the results of the Government’s 2011 consultation have been published, and two new consultations have also been launched.
The full package of reforms was unveiled in a written ministerial statement from energy and climate change secretary, Ed Davey, on 10 February.
Supreme Court appeal
The Department for Energy and Climate Change (DECC) submitted its final appeal to the Supreme Court yesterday, in a bid to overturn the High Court ruling that cuts it made to solar FITs before Christmas were unlawful.
A panel of three Supreme Justices will now decide whether the appeal can be heard, but whatever the outcome, the hearing will not take place until later this year.
This means the solar industry will have to wait again for clarification on whether the reference date for the lower 21 pence per kilowatt-hour (p/kWh) rate should be 12 December 2011, as the Government hopes, or 3 March 2012.
New solar tariffs
Aside from the ongoing legal battle, DECC has confirmed that the existing 43.3 p/kWh rate for solar FITs will rise to 45.4 p/kWh on 1 April 2012, in line with the Retail Price Index (RPI).
This routine rise will apply to installations completed before 3 March 2012 unless DECC’s Supreme Court appeal is successful. In that case, the 45.4 p/kWh rate would only apply to schemes completed before 12 December 2011 and the 21 p/kWh rate would apply to all schemes completed between 12 December 2011 and 3 March 2012.
Energy efficiency requirements
DECC also confirmed this month that it will no longer be linking eligibility for FITs to a requirement to have Green Deal energy efficiency measures in place beforehand, or to have an Energy Performance Certificate (EPC) rating of 'C' for the property in question.
Following the outcomes of last autumn’s consultation exercise, eligibility for both business and domestic FIT applications will instead depend on the relevant property having an EPC rating of 'D' or above.
Lower, multi-installation tariffs will also only be applied to applicants with more than 25 solar installations, rather than one installation, as was originally proposed. The rate is 80 per cent lower than the standard tariff.
The changes will now be passed into law and applied to new solar PV installations completed on or after 1 April 2012.
New consultations
A fresh consultation is now underway until Tuesday 3 April, to gather feedback on plans to introduce rolling six-monthly cuts to solar FITs for domestic-scale installations, from 1 July 2012 onwards.
The Government’s aim is to link future rates to anticipated reductions in the costs of installing solar panels, in a way that avoids the need for 'emergency reviews' in future, and provides more transparency for the solar power industry. The idea is based on a system already in use in Germany.
The separate consultation on the most appropriate arrangements for non-solar installations, such as micro Combined Heat and Power (CHP), wind, anaerobic digestion and hydro-electric schemes, is also now open until Thursday 26 April.
The Government's proposals include increasing the tariffs for micro-CHP projects, whilst capping the rates for wind, anaerobic digestion and hydro-electric schemes, to help guarantee returns for investors. Tariffs for small-scale wind and hydro schemes could be reduced as part of this process, while anaerobic digestion rates would be frozen.
Posted under Environmental Regulations and Legislation
and Environmental Technologies and Renewable Energy
and Energy and Renewables
and Environmental Technologies on 22 February 2012
