On February 9th, 2012 the U.K.'s Department of Energy and Climate Change (DECC) announced modifications to the nation's feed-in tariff (FIT) program, including a requiring an energy performance rating for properties installing solar photovoltaic (PV) systems, reduced tariff rates for owners of more than 25 systems and a linking of subsidy levels to PV industry cost reductions.

The changes come at the close of the first phase of a FIT consultation. The DECC also announced that it will transfer some unused funds allotted for large-scale renewable programs to assure full funding for the FIT program through the end of the current spending period.

"These proposals should help re-orientate the tariffs towards cost-effectiveness and greater predictability – which on principle is welcome," stated Renewable Energy Association Chief Executive Gaynor Hartnell  in the organization's initial response to the announcements.

However, Hartnell criticized the energy performance rating requirement, which were put forward in a less strict form than earlier proposals.

"This will constrain the market less, but even so, it isn’t really a particularly logical thing to do. It makes perfect sense to do this for renewables for heating, but not when it comes to power generation."

'D' or better Energy Performance Rating required

The DECC estimates that these changes will allow for the installation of roughly two and half times more renewable energy systems than were originally projected by 2015.

The agency notes that it had originally proposed that properties installing PV systems produce an energy performance rating of 'C' or a commitment to all Green Deal measures.

However, the new FIT rules will only require a 'D' or above rating for properties with systems installed on or after April 1st, 2012. The DECC states that the earlier proposal was impractical at the stage, estimating that roughly half of all properties are already eligible for a 'D' rating.

The new multi-installation FIT rate will be set at 80% of the standard tariffs, and individuals with less than 25 renewable energy systems installed will be eligible for the individual rate. The agency is in consultation on a proposal that social housing, community projects and distributed energy programs be exempt from the multi-installation FIT rate.

GBP 460 million to be provided over Spending Review

The DECC states that its proposal to link subsidy levels to cost reductions in the industry follows the example of the German FIT and will remove the need for emergency reviews in the future.

The agency also states that it will use budget flexibility to cover overspending resulting from the large number of PV plants installed this year, while still providing GBP 460 million (USD 730 million) for new PV plants over the Spending Review period. These funds will primarily come from under-spent budgets for large-scale renewables.

2012-02-09| Courtesy: DECC; Photo: REA | solarserver.com © Heindl Server GmbH

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