Feed-in Tariff could be closed to new applicants by January 2016

The Feed-in Tariff (FIT) scheme, which offers subsidy support to small scale renewables, could be closed to new applicants by January 2016, the Government announced today.

DECC said that technology deployment costs had fallen by more than 50% in some bands, leading to an installation boom which had created

DECC said that technology deployment costs had fallen by more than 50% in some bands, leading to an installation boom which had created "costs exceeding our expectations"

The Department of Energy and Climate Change (DECC) today launched a consultation on a set of measures it has proposed to control the costs of the FIT subsidy.

These measures include revised tariffs based on updated technology costs, a more stringent degression mechanism and deployment caps leading to the phased closure of the scheme in 2018-19.

However the scheme could be shut even earlier than that for new applicants, according to the consultation document.

If costs aren't limited to £100m by 2018/19, the document says “the only alternative would be to end generation tariffs for new applicants as soon as legislatively possible, which we expect to be January 2016”.

DECC said that technology deployment costs had fallen by more than 50% in some bands, leading to an installation boom which had created “costs exceeding our expectations”.

As a result DECC said it expects to breach the Levy Control Framework budget, which caps the amount of money that can be added to consumer bills to pay for green energy schemes.

"We are therefore proposing measures to place policy costs on bills on a sustainable footing, improve bill payer value for money, and limit the effects on consumers who ultimately pay for renewable energy subsidies," said DECC.

Proposed cuts to FIT rates

New Tariff bands

Current rate (Oct-Dec 2015) p/kWh

New proposed rate from Jan 2016 p/kWh




















However, the solar industry described the proposals as 'alarming' and "the antithesis of sensible policy'.

The Solar Trade Association’s head of policy Mike Landy said:“The proposals put forward by the Government today, which will now undergo a period of consultation, would be hugely damaging for the UK solar industry and we are now consulting quickly with our member companies as to how to respond.”

“We will provide a detailed response shortly, once we have considered the proposals in more detail. However, we regret that proposals to suddenly cut Tariffs combined with the threat of closure of the scheme next January will spark a massive market rush. This is the antithesis of a sensible policy for achieving better public value for money while safeguarding the British solar industry.”

A recent STA report claimed that solar energy could be subsidy free by 2020 if it received stable report in the meantime, at an average cost of just £1.69 per household energy bill.

The latest review follows an earlier consultation in July and August on removing FITs ‘pre-accreditation’, which gives renewable energy generators a guaranteed tariff level in advance of commissioning their installation.


Responding to the latest hit for the UK solar sector, Friends of the Earth energy campaigner Alasdair Cameron said: “From California to China, the world is reaping the benefits of a solar revolution, yet incredibly in the UK David Cameron is actually trying to shut rooftop solar down. 

“These absurd solar cuts will send UK energy policy massively in the wrong direction and prevent almost a million homes, schools and hospitals from plugging in to clean, renewable energy. 

“Of course the FIT should fall as solar becomes cheaper, but the government clearly plans to remove support entirely. This is politically-motivated, and will take away power from people and hand it back to big energy firms.

“Instead of championing fossil fuels, the Government should focus on developing the UK’s huge renewable energy potential. 

“Policies like this will further undermine David Cameron’s credibility on climate change. World leaders meeting in Paris later this year will have every right to call him a hypocrite.” 

However the Government's proposals did find some support, notably from the manufacturer's organisation EEF, which earlier today released a report calling for the Government to reform its green policies because they driving up energy costs.

Competitive disadvantage

EEF senior climate and environment policy adviser Richard Warren said: “With the costs of government energy policy surpassing previous projections and, the Levy Control Framework budget already looking like it’s been maxed out, government is right to be getting to grips with the issue.

DECC’s number one priority has to be delivering emissions reduction at the least cost to consumers and the Feed in Tariff (FITs) scheme is palpably incapable of doing this at present.

“Even with significant cost reductions achieved in recent years, the FiTs scheme reduced carbon at a woefully inadequate rate of £380/tonne last year almost double even that of offshore wind at around £200/tonne. A review is long overdue.” 

Brad Allen


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