Government Attempts To End Uncertainty Over Feed-In Tariffs

The government yesterday outlined draft changes to feed-in tariffs (FITs), which confirms a reduced tariff from April 1 onwards.  The proposed changes would mean that any solar panels installed up until the eligibility date of March 3 will not receive less than 21p. If the government loses its appeal against the action brought by Friends of the Earth and solar installers Solarcentury and HomeSun, the rate could revert to the previous 43.3p rate.

“I know this is a difficult time for the sector and I want to do as much as I can to end the current uncertainty created by the legal challenge,” Energy and Climate Change Minister Greg Barker said yesterday in a statement.  But he added that the level of FITs for solar panels must be reduced as quickly as possible “to protect consumer bills and to avoid bust in the whole FIT budget”.

The government remains committed to its counter challenge over the December date for reducing FITs, said Barker, but cannot “sit and do nothing while we wait”.

Friends of the Earth welcomed the government’s decision to take action.  “At last the Government is taking steps to sort out some of the uncertainty that’s crippling a thriving UK industry – planned cuts will at last allow solar firms to start planning for the future,” says executive director Andy Atkins.  “Solar payments should be cut in line with falling costs – but by trying to rush through payment before the consultation closed Ministers created a shambolic mess.”

Cathy Debenham, founder of YouGen, the online renewable energy information provider, says that the announcement makes now a good time for householders to install solar panels.  “This brings a bit of welcome certainty to both consumers and installers in the solar PV market,” she says. “For consumers that are happy with the rate of return that 21p per kWh gives, now is a good time to install. It’s unlikely to get better, and it’s quite likely that the rate may go down again after 3 March 2012. There’s the added bonus that they may win the jackpot and get the 43p rate.”

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