WIREDGOV

Energy Secretary Chris Huhne has today launched a comprehensive review of the Feed in Tariffs (FITs) scheme following growing evidence that large scale solar farms could soak up money intended to help homes, communities and small businesses generate their own electricity.

Since FITs began last year it has been a huge success at stimulating green growth, driving innovation, creating jobs and cutting carbon.

More than 21,000 installations have been registered to date. The vast majority of these are domestic installations, including solar panels, wind turbines and microhydro plants.

Last year’s Spending Review committed government to save 10% of the costs of FITs in 2014-15 through a review due to start in 2012 or earlier if uptake exceeded Government expectations. Because of the risk of an increasing number of large scale solar farms which could push FITs costs off track, and the need to give industry added certainty to invest, the coalition is today announcing a comprehensive review into the scheme. We also hope to publish next month measures to support renewable heat within the budget agreed at Spending Review.

Chris Huhne said:

“The renewables industry is a vital piece in the green growth jigsaw and this review will provide long term certainty while making sure homes, communities and small firms are encouraged to produce their own green electricity.

“Large scale solar installations weren’t anticipated under the FITs scheme we inherited and I’m concerned this could mean that money meant for people who want to produce their own green electricity has the potential to be directed towards large scale commercial solar projects.”

The comprehensive FITs review will:

• Assess all aspects of the scheme including tariff levels, administration and eligibility of technologies
• Be completed by the end of the year, with tariffs remaining unchanged until April 2012 (unless the review reveals a need for greater urgency)
• Fast track consideration of large scale solar projects (over 50kW) with a view to making any resulting changes to tariffs as soon as practical, subject to consultation and Parliamentary scrutiny as required by the Energy Act 2008.

Alongside the fast track review of large scale solar PV, a short study in to the uptake of FITs for farm based Anaerobic Digestion (AD) plants will also take place. Only two such projects have been accredited so far and by this point at least six were expected. The tariff rates will be examined to see if they are enough to make farm based AD worthwhile.

The Government will not act retrospectively and any changes to generation tariffs implemented as a result of the review will only affect new entrants into the FITs scheme. Installations which are already accredited for FITs at the time will not be affected.

Notes for editors:

1. Broad terms of reference for the review are available from the First review of Feed-in Tariffs (FiTs) web page.
2. According to Ofgem, the total installations to date (to 26th January 2011) under the FITs scheme are as follows:

• Anaerobic digestion – 2
• Hydro – 178
• Micro CHP – 36
• PV – 19854
• Wind – 1132

The total installations have a combined capacity of 76.66MW.