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Cuts in Feed In Tariff's

There is considerable irritation within the UK renewables sector at the moment concerning cuts in government support for the Feed-in Tariff's Scheme (FiTS) following a review by the Department of Energy and Climate Change (DECC). The cuts will entail a large reduction in the FiTS rates for systems over 50 kilowatts (kW) with those over 250 kW receiving a mere 8.5 pence per kilowatt hour (kWH). These cuts constitute a 70 percent reduction in the rates of return from FiTS and have been received as representing a significant threat to the industry with much of the medium to large scale solar industry facing an uncertain future.

Ben Warren, head of renewable energy at Ernst & Young, has been quoted as saying that: "Revisiting the feed-in tariff at such an early stage of its existence has undermined investor confidence not only in the UK solar industry, but potentially in the wider UK renewables market."

However, the Solar Trade Association in association with Ernst & Young have recently released a report claiming that a slight increase in the Feed-in Tariff (FIT) rate for installations larger than 50kW could bring about a return on investment sufficient to attract financial support and that therefore these cuts could have been avoided. The UK Solar PV Industry Outlook Report also calculates that if silicon prices continue to decline to around 17 percent, it is possible that the UK solar sector could see grid-parity with fossil fuels by 2017.


The STA is calling for informed decision making based on a thorough and accurate analysis of the potential and role for solar in the UK. The STA argues that Government policy must be based on up-to-date cost inputs, full assessment of benefits, and full consideration of strategic and practical arguments.

Sources:

Low Carbon Economy
http://www.lowcarboneconomy.com/profile/the_low_carbon_economy_ltd/_low_carbon_blog/solar_fit_cuts_%27undermine_entire_uk_renewables_industry%27/14632

Solar Power Portal
http://www.solarpowerportal.co.uk/news/feed-in_tariff_cuts_could_have_been_avoided_5478/

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