DECC today published their response to the FIT review and consultation carried out earlier this year.
Among the changes were:-
- Generation Tariffs cut by 64%. This is less of a reduction than the 87% cut that had been consulted on by DECC, although it is still substantial. Some specific technology bands, such as onshore wind <100kW, have, however, seen cuts of only 38%. Industry response has been guarded, and DECC's own projections still show at least 10,000 jobs at risk in the solar sector;
- Pre-accreditation re-introduced for solar and wind over 50kW and for all anaerobic digestion and hydro. Having been scrapped in September, the re-introduction of pre-accreditation will be a welcome move from DECC;
- Deployment caps introduced. Quarterly caps have been published, taking effect from 8 February 2016. These caps are subdivided by technology type and again by degression bands. The stated aim is to limit spend on FIT subsidies to £100m between 8 February 2016 and April 2019;
- A new degression regime. This includes a new automatic 10% degression contingent on quarterly caps being reached.
DECC admitted to having received "robust evidence" from the sector, which led to a softening of some of their earlier proposals. With the industry still seeking to influence the content of the Energy Bill in relation to early closure of the Renewables Obligation, today's announcements might give some encouragement that the UK Government is listening to industry concerns.
DECC also announced a separate consultation for anaerobic digestion and micro CHP technologies in early 2016.
The FITs consultation response can be found here – https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/486082/FITs_Review_Govt__response_Final.pdf
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.