UK government confirms final cuts to microgeneration subsidies

Posted at July 24, 2012 » By : » Categories : News » Comments Off on UK government confirms final cuts to microgeneration subsidies

The UK government confirmed cuts to its package of subsidies for microgeneration provided by the feed-in tariff (FIT) and renewable heat incentive (RHI).

The final changes to the FIT, following the furore and new consultation earlier this year, will cover all newly eligible technologies from December this year. Changes to tariffs for solar installations will come into force from August.

In addition to the current rate cuts, a degression mechanism will be introduced for anaerobic digestion, wind and hydro installations from April 2014. Like the degression mechanism introduced for solar power, the rate cut will depend on the uptake of the technology.

As technologies become more popular, and prices come down, the FIT rate will decrease commensurately, with the lower tariff rate published two months before the degression date.

A similar degression scheme will also be applied to non-domestic installations under the RHI as they also become more popular.

The government says the changes will provide certainty for the microgeneration industry, which has been widely critical of how the FIT for solar technologies has been handled.

“I want to provide long term certainty for those choosing to invest in all forms of small scale green electricity generation, not just solar, and our changes to FITs will do just that,” says Energy and Climate Change Minister Greg Barker. “As well reducing tariffs over time… in line with uptake, we are introducing tariff guarantees for all technologies, great news for projects with long lead in times like hydro power.”

The Minister also confirmed that the energy efficiency requirement, which now stipulates that homes must meet a certain level of energy efficiency before they can receive the FIT, will be waived for community and school buildings.

“These types of projects will also be able to get tariff guarantees for installations of any size, making it easier for communities to get involved in clean green local energy generation,” he added.

Larger projects will also benefit from a system of preliminary accreditation for anaerobic digestion and hydro projects, so developers will know in advance if they will be eligible for the FIT. The tariff will also be guaranteed for six months to two years to give further certainty.

The head of the Micropower Council, Dave Sowden, welcomed the package of measures as “broadly very positive” for investors and customers.

The Renewable Energy Association (REA) has also responded positively to the proposals but calls on the government to consider introducing tariff guarantees for renewable heat projects as well as microgeneration.

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Related stories:
UK home solar panel installation numbers soar (4-Jul)
UK government promises ‘certainty’ with fresh solar FIT cuts in August (25-May)
UK government to delay further cut to solar feed-in tariff (22-May)
UK solar sales slump in wake of feed-in tariff cut (4-May)

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