29 Jan The end of the Feed-in-Tariff: What next?
In 2017, the UK Treasury released a document which signalled the end of the UK’s world-renowned renewable energy scheme, the Feed in Tariff. The Treasury announced: ‘There will be no new low-carbon electricity levies until 2025’. This means that when the current Feed in Tariff legislation ends in April 2019, there will be no replacement.
If you are already on the Feed in Tariff, then you will not be affected. To clarify, this means that you will continue to receive payments 20 years from when you joined.
While the Feed in Tariff announcement came as no great surprise, it confirms that a greener Britain is not high on the Government’s agenda.
The scheme has facilitated almost 1 million solar installations in the UK. The scheme, which was launched in the late 2000’s by the then Energy Minister Ed Miliband, has encouraged thousands of people to become renewable energy generators.
However, since the Conservatives came into power, back in 2010, the subsidy has been continually reduced to the point it is no longer appropriate to the real-world cost of installation.
The Government has finally washed its hands of FiTs. Whoever comes next on the Energy Minister roundabout (seven have come and gone in the last six years) will thus be focussed on more important things that no one wants, such as nuclear energy or fracking.
Will Solar Survive the End of the Feed in Tariff?
The UK solar industry may not be down and out as some would be led to believe. As ever, the price of renewable energy is falling. The UK has been hit with several Feed in Tariff crises, as no one can accurately predict the rate at which renewable energy is getting cheaper. Perhaps we should be more sympathetic to those Energy Ministers repeatedly made to look incompetent, when they revealed wildly inappropriate FiT rates. Predicting the price of solar in the future appears to be as futile as predicting the price of Bitcoin.
Despite the eradication of the Feed in Tariff, many renewable energy advocates like ourselves, will continue to fly the flag in the industry. The average solar panel cost has come down 10-15% over the last 12 months, and with current FiT rates as low as between 1.9p and 4.3p, the removal of FiTs may be made irrelevant by drops in installation costs.
This would mean that industry pioneer Jeremy Leggett was not far off – he predicted in 2015 that there would be a no subsidy environment by 2018.
The Department for Business, Energy and Industrial Strategy (BEIS) has today unveiled a new ‘Smart Export Guarantee’ to replace the export tariff. The proposal legislates that all large energy suppliers will have to reimburse small-scale generators for the electricity they export to the grid.
The guarantee regards ‘large energy suppliers’ are those with more than 250,000 customers. Smaller suppliers will be able to voluntarily join the scheme, but will have to fulfil the same requirements as the large suppliers. Large suppliers will be forced to offer at least one tariff, but they have the freedom to determine the length of any contracts.
It outlines that partaking suppliers must offer a tariff that is greater than zero and will not be eligible to recover costs by charging consumers at times of negative pricing. Furthermore, the government has decided that all exports must be metered and not deemed – only houses with a smart meter installed will be eligible for the Smart Export Guarantee.
All technologies currently eligible for the feed-in tariff will also be eligible for the SEG, with an upper capacity limit of 5MW.
The government has stated that it is keen to encourage the deployment of battery storage technologies, but is seeking industry views on the potential eligibility of storage and co-located renewables with the SEG. For those of you who have or plan on having battery storage installed with your Solar PV system, this means that you will have to wait and see if you will be eligible for the SEG.
Interested in Solar PV?
Here at Hero Renewables, this is far from the end for Solar PV. Homes and businesses with PV panels will still make huge savings on their electricity bills, even without the FiT. Sustainability is something that all UK homes should strive towards and Hero will continue to fulfil our role as a major catalyst in the process. Today’s news further suppresses the effects of the FiT removal.
If you would like expert advice on Solar PV, or another of the many renewable technologies Hero offer, you can contact us here.