News | Energy Efficiency

http://www.newenergyworldnetwork.com/renewable-energy-news/by-technology/solar/uk-fit-review-may-damage-investor-confidence.html

The UK has launched an early review of the feed-in tariff (FIT) scheme that was introduced last April in response to fears that large-scale solar farms will soak up the majority of funding.

Although the FIT initiative is capped for solar projects exceeding 5MW in capacity, the review may see subsidy rates altered for large solar photovoltaic projects of more than 50kW.
While the coalition has pledged that the review is being launched to give the industry added investment certainty, the industry is concerned that decisions to alter the scheme at such an early stage may reduce investor confidence.
Jason Williams, a partner at renewable energy consultancy Envirance Partners, asks, ‘As the government starts to undermine confidence in renewable investment, how many people will start laying out capital on large solar photovoltaic [over 50 kWp] projects today?’
To be completed by the end of the year, the review may allow for fast-tracked cuts to subsidies for large-scale projects, but it may also see tariff rates for small solar and anaerobic digestion plants increase.
Although the government said the review was launched in response to an unprecedented level of applications for large projects, the review was written into last year’s Spending Review.
The Spending Review required the UK government to review the FIT in 2012 if uptake exceeded expectations, in order to reduce costs by ten per cent in 2014.
Since the FIT was established in the UK, more than 21,000 installations with an aggregate capacity of more than 76MW have been registered, most of which are domestic solar, wind and microhydro projects.
UK Energy Secretary Chris Huhne said the review will address concerns that a swelling number of applications from large-scale projects will increase the overall spend on the scheme, as global solar companies flock to the country to target incentives.
Tariffs for projects already registered under the FIT are likely to remain unchanged until April 2012, unless the rising public spend on the scheme is deemed urgent enough to act retrospectively, the government said.
The Department of Energy and Climate Change is also set to publish new measures to support renewable heat next month, within the budget that was agreed at the Spending Review.
Huhne said, ‘Large-scale solar installations weren’t anticipated under the FITs scheme we inherited and I’m concerned this could mean that money meant for people who want to produce their own green electricity has the potential to be directed towards large scale commercial solar projects.’