Deep FIT cuts confirmed

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The Government has today confirmed the outcome of its Feed-in-Tariff (FIT) review and, as expected, it is not good news for large-scale commercial schemes.

While the tariff for domestic and small businesses projects remains unchanged, from August 1 it will be significantly reduced for larger stand-alone and farm-scale schemes.

For new schemes between 50kw and 150kw, it will pay 19p per kwh, which represents a reduction of over 42% on the previous rate.

For schemes between 150kw and 250kw, it will go down to 15p per kwh; while the largest developments from 250kw up to 5mw, it will pay just 8.5p per kwh – a 72% cut on current levels.

“There will be huge disappointment among promoters of field scale schemes”

Energy and climate change minister Greg Barker said the changes were necessary to safeguard the future of the scheme for the smaller-scale users. He explained: “We have carefully considered the evidence that has been presented as part of the consultation and this has reinforced my conviction of the need to make changes as a matter of urgency.

“Without action the scheme would be overwhelmed. The new tariffs will ensure a sustained growth path for the solar industry while protecting the money for householders, small businesses and communities.”

Commenting on the news, Sonya Bedford, head of renewable energy at Stephens Scown, said: “There will be huge disappointment among promoters of field scale schemes and what we will see now is a race to complete the larger consented projects before August 1.

“But it’s not all doom and gloom because the level of FIT is still attractive for smaller scale schemes. We’re dealing with a lot of rooftop solar projects and increased demand for single wind turbines before the whole FIT regime is reviewed in 2012.

“Farmers and landowners can earn good rental returns if they partner with a wind developer, or increasingly they are putting up turbines for their own use to offset spiralling energy costs. We’ve had 13 new enquiries about wind turbines over the last week alone and our renewables team is seeing a lot of interest at the Royal Cornwall Show.”