On 27 August 2015, in a surprise move, the Department for Energy and Climate Change (DECC) proposed big changes to the Feed In Tariff (FIT) payments for future planned solar PV panel installations. Amber Rudd, Secretary of State for Energy and Climate Change, announced a consultation which closes on 23 October 2015. DECC are proposing to cut the generation element of FIT’s for under 4kWhp installations from 12.47p per kWh (Oct 2015 rate for new installations) to 1.63p per kWh by January 2016. On a typical 4kWp installation generating 3,500 kWh per year this will reduce annual payments to home-owners by £380 per year. Generation tariffs for larger installations will also be dramatically cut. At a stroke Amber Rudd has wiped out most of the incentive for consumers to invest in solar electricity generation, along with many of the high tech solar installer jobs that go with this.
In a move which appears to leave the Conservative government’s green credentials in tatters, DECC are drastically pulling back from the development of green sources of energy. The changes will particularly effect the viability of small scale solar electricity installations; those under 4kWp which are popular with homeowners. The justification for the dramatic change is that the government’s 2010 Impact Assessment on the Feed-in Tariff projected that the UK would reach 750,000 installations by 2020: by the end of July 2015, we had already reached over 730,000.
The solar industry will no doubt be providing input on these poorly conceived proposals from Amber Rudd which hopefully can still be amended before they savage the industry. This move is seen by much of the industry as pulling the plug on jobs with another sudden change in strategy just after scrapping the Green Deal has hit insulation companies. Particularly disappointing is that the government were well aware of the progress on solar installations well before the May 2015 election and with Amber Rudd previously working as Under-Secretary of State at DECC it seems a highly cynical move to make previously unannounced changes just after the election.
Update 8 December 2015
The FIT consultation received some 55,000 responses, of which 2,500 are classed as “detailed responses”, much of them highly critical of the DECC proposals. As of 8 December 2015 there has been no word of when the report on the consultation will be published although it is indicated to be in 2015. Until this report is published no legislation can be raised. On this basis it is highly unlikely that there will be any changes to the existing FIT scheme before April 2016 (the scheduled 1st January 2016 3.5% reduction in generation payments will continue rather than the 87% proposed by Amber Rudd). See Uncertainty Over Solar Panel Feed In Tariff Rates For January 2016.