Feed-In Tariffs on target, founder claims

New figures released showing the government's Feed-In Tariff (FIT) scheme is on target, may place more pressure on the coalition to clarify their plans for FITs.

Rumours have abounded in recent days following an article in the Financial Times (Solar power subsidy under review, 23 September) which claimed the government was considering an early review of the financial incentives associated with FITs, after the number of properties installing green energy systems soared to over 10,000 since the scheme’s launch in April.

At present, FITs place an obligation on the national grid to purchase green energy produced on residential sites at a better-than-market value, with the scheme subsidised through a levy on consumers’ utility bills.

However, while Chris Huhne’s Department of Energy and Climate Change state they have no plans to review FIT incentives earlier than the current date of March 2012, the government has not ruled out alterations being made as a result of this month’s comprehensive spending review – conducted not by the DECC, but by the Treasury.

News, then, that the FIT scheme is on target to meet its first year projections may not be what the government wants to read in a report compiled by none other than the FIT’s founding father, Philip Wolfe.

Now chair of green energy company Ownergy, Mr Wolfe led the Renewable Energy Association during the formation of the Energy Act 2008. He says that Ownergy’s own research has shown the number of installations to date equates to just over a one pence increase to average electricity bills.

He said: “The industry and government should share my pleasure in the uptake of the Feed-In Tariff eligible renewable energy systems.

“The scheme is delivering exactly what it was meant to do in terms of a rapid increase in the number of installations, creation of jobs and increase in the amount of renewable energy generated in this country, which has historically been pitifully low.”

The Ownergy report also shows that uptake has been as expected across both the commercial and residential markets, and that the 32MW of installations to date means the scheme is on track to meet its first year targets of 100MW. But while praising the success so far, Mr Wolfe also urged caution before taking any further action.

“It is apparent that the scheme has a long way to go before we are in the enviable position of having to consider dampening enthusiasm through lower tariff rates as is happening in some countries in Continental Europe,” Mr Wolfe added. “Despite the best efforts of the industry, awareness of the Feed-In Tariffs is still low and there are still several barriers to entry.

“If the government believes that an early review of tariff levels is required, it could not be more mistaken. To do so would stop investment in its tracks and undermine confidence not just in all renewable energy schemes but in other sectors dependent on a consistent regulatory regime.

“It must also be stressed that the Feed-In Tariffs is paid for through a levy on electricity bills and is not from public expenditure. As such, it can make no contribution to reducing the public sector deficit.”

The government are expected to announce their comprehensive spending review on Wednesday October 20.

Sam Plester

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