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Feed-in Tariff incentives slashed

Incentives for new larger scale solar power projects are being slashed, the Government confirmed today.

Ministers have said they are concerned about commercial “solar farms” benefiting from the Feed-in Tariff designed to boost small-scale renewable energy, with more planning applications for large scale schemes submitted than expected.

Energy and climate change minister Greg Barker said the move to reduce the subsidies was needed to prevent the system becoming “overwhelmed”.

The Government has also committed to shaving off £40 million, or 10 per cent of the projected costs of the scheme, which pays people for electricity generated from small scale green technology and is funded through consumer energy bills.

But the industry has warned that cutting the rates for feed-in tariffs for larger solar projects will damage the potential for green growth and jobs.

Cutting payouts for all schemes above 50 kilowatts (kW) - the equivalent of putting solar panels on around 20 homes - has raised fears that schemes for communities, schools and social housing could no longer be viable.

Under the revised rates, which come into force for new installations from August 1, the biggest projects will be paid 8.5p for each unit of green electricity they produce, instead of more than 30p under the current arrangements.

Mid-size schemes will see their subsidies slashed by as much as half, from 30p to 15p, while projects over 50kW will have a new, lower rate of 19p.

Mr Barker said: “We have carefully considered the evidence that has been presented as part of the consultation and this has reinforced my conviction of the need to make changes as a matter of urgency.

“Without action the scheme would be overwhelmed.”

Solar schemes under 50kW are unaffected. The new tariffs are:

Solar PV:
Greater than 50 kW but less than 150 kW Total Installed Capacity - 19.0p/ kWh
Greater than 150 kW but less than 250 kW TIC - 15.0p/ kWh
From 250 kW to 5 MW TIC and stand-alone installations - 8.5p/ kWh

Anaerobic digestion:
Up to 250 kW - 14.0p/ kWh
Greate than 250 kW and up to 500 kW - 13.0p/ kWh