Feed-in Tariff Review Campaign


Consultation on a Review of the Feed-in Tariff Scheme

Over the last few years, solar PV has been a great success in the UK.   This has been encouraged by an incentive known as the Feed-in Tariff (FIT). Thousands of homes, businesses and communities have installed solar PV systems.   Many renewable energy companies have formed across the country and costs for installations have fallen substantially.  In 2011, the FIT rate was 43.3p for each kWh of electricity a domestic (4kW or under) solar PV system generated.  By October 2015, the FIT rate had decreased to 12.47p/kWh.  We are approaching the point where the economics for solar PV will be attractive without any subsidy.

On 27th August 2015, the Department of Energy and Climate Change (DECC) published their consultation on a Review of the Feed-in Tariff Scheme.  This proposed up to an 87% cut in the Feed-in Tariff rate from January 2016.  The FIT rate for a domestic PV system would drop from 12.47p/kWh to 1.63/kWh.  The solar PV industry is keen to become viable without subsidies as soon as possible.  However most companies feel that the cuts proposed in the Feed-in Tariff review go too far and too fast.  The result is likely to be a devastating overnight drop in the numbers of domestic solar PV installations.  Many high quality companies will struggle to stay economically viable.

Domestic households who install solar PV from 1st January 2016 would be offered 1.63p for each kWh generated and 4.85p for each kWh exported.  In contrast the proposed new nuclear power plant, Hinkley C, has been offered a strike price by the Government of 9.25p/kWh which is index linked for 35 years.  This is a much higher subsidy than is proposed for solar PV and is not the only subsidy offered to the nuclear industry.  There are immense costs associated with decommissioning of old nuclear power stations and storage of nuclear waste.  Each household is on average paying £79 per year to deal with the UK’s nuclear waste.  Subsidies for fossil fuels amount to around £400 per person per year.  In contrast households only paid £9 on their bills in 2014 as a result of the Feed-in Tariff.

Community owned energy is an exciting opportunity for local areas to take greater control of their own energy supply.  Solar PV systems installed on rooftops can be financed by community share issue.  Local shareholders receive an attractive rate of interest and building owners receive cheaper electricity, both keeping more money in the local economy.  Additional income can be spent on community benefits.  For community owned energy to work, the return on the investment from renewable energy installations needs to be high enough to attract investors.  The rates proposed from January 2016 are likely to be too low for community owned energy projects to be viable.

Community energy groups and renewable energy companies do not want the feed-in tariff frozen at the current rate. We want the FIT rate to be adjusted in line with falling costs to target zero subsidy in an appropriate timescale. Pre-accreditation has been vital for community energy projects as these take longer to develop and raise the finances.  It is important for DECC to reintroduce pre-accreditation for community energy projects.

Community Energy groups across Devon are seriously concerned about the proposed changes.  They are uniting in a day of action on Friday 16th October and lobbying their local MPs on these issues.  ECOE, Teign Energy Communities, Greener Teign, Tamar Energy Community, Yealm Community Energy and Regen Communities have collaborated with 361 Energy CIC to crowd fund a video campaigning against the changes proposed in the Feed-in Tariff review.