Energy secretary Chris Huhne has tabled a written ministerial statement outlining proposals for new Feed-in Tariff rates from April 2012.
The government’s appeal against the High Court’s ruling that cuts made to FiTs were unlawful is still being heard and it has reserved the right to cut FiTs rates on solar panels installed on or after 12 December.
The government will now press ahead with cuts to schemes installed on or after 3 March while the judicial review is ongoing, meaning that even if the government’s appeal in favour of cutting rates from December is unsuccessful , the new FiTs rates will apply to solar panels installed after 3 March.
Mr Huhne confirmed that more than 2,000 responses were received by the government on its consultation into changes to FIT rates, after it closed on 23 December.
He said: “We continue to stand by our original proposal. However, I know that the uncertainty while we await the Court’s decision is difficult for the industry.
“A retention of the 43p tariff could also create substantial risks to the FITs budget if our appeal is unsuccessful. For these reasons, we believe it is prudent to bring forward our decision on one aspect of the consultation: the proposals for new solar PV tariffs.”
Friends of the Earth’s executive director Andy Atkins said: “At last the government is taking steps to sort out some of the uncertainty that’s crippling a thriving UK industry – planned cuts will at last allow solar firms to start planning for the future.
“Solar payments should be cut in line with falling costs – but by trying to rush through payment before the consultation closed Ministers created a shambolic mess that threatens 30,000 jobs and the future of the industry.
“Minsters must urgently use the millions of pounds in tax that solar firms generate to safeguard this industry and the jobs and businesses it has created.”
The outcome of the consultation will be published by 9 February 2012, in time for any resulting legislative changes to come into effect from 1 April 2012.
Mr Huhne added: “Our aim is that this announcement will be accompanied by a set of reform proposals for the next phase of the comprehensive review of the FITs scheme, which will be the subject of a further consultation.”
Solarcentury, one of the two solar firms who challenged the government in the High Court along with Friends of the Earth, chairman Jeremy Leggett said on Twitter: “Good, clarity on the solar FiT rate from March 3rd. If DECC now withdraws the EPC commitment & the cap itself, its job-creation time again.”
DECC is proposing that all new solar PV installations after 1 April 2012 will need to demonstrate that the building to which the installation is attached meets a certain level of energy efficiency and if it doesn’t the FIT rate will be reduced from 21p/kWh to 9p/kWh unless the owner takes one of two options that include bringing the property up to an EPC rating of level C or higher.
Energy and Climate Change minister Greg Barker said: “I know this is a difficult time for the sector and I want to do as much as I can to end the current uncertainty created by the legal challenge.
“We must reduce the level of FITs for solar panels as quickly as possible, to protect consumer bills and to avoid bust in the whole Feed-in Tariffs budget.”
New draft licence modifications laid before Parliament for FiT rates based on declared net capacity:
≤4kW (new build) Current Rate: 37.8 p/kWh New rate: 21.0 (1 April 2012)
≤4kW (retrofit) C: 43.3 N: 21.0
>4-10kW C: 37.8 N: 16.8
>10-50kW C: 32.9 N: 15.2
>50-100kW C: 19 N: 12.9
>100-150kW C: 19 N: 12.9
>150-250kW C: 15 N: 12.9
>250kW-5MW C: 8.5 N: 8.5
stand alone C: 8.5 N: 8.5