DECC add 197 million to Feed-in Tariff budget

Tuesday 10 January 2012

Yesterday brought the welcome news that the Department of Energy and Climate Change (DECC) have added 197 million to the Solar PV Feed-in Tariff (FIT) budget for small-scale green energy incentives.

The move is designed to stop the FIT scheme from going over budget. It has been achieved by DECC re-allocating funds set aside for the Renewables Obligation incentive scheme. Although DECC stated that this was 'purely a technical adjustment' and that more subsidy had not been made available for the FIT scheme.

For the Solar Industry, it brings some positive respite in the wake of ongoing legal challenges and widespread uncertainty regarding the Government's future intentions for the FIT scheme.

The Government have long maintained that the FIT rate is currently too high and would lead to the Solar Industry becoming unsustainable with a prediction that, at the current FIT rate, the scheme would go over budget.

To remedy this, a cut to the FIT rate was implemented on 12th December; halving payments for units of electricity generated from 43.3p to 21p for Solar systems up to 4kWp in size.

Solar and Green Groups successfully appealed against this, with the concern that it would lead to Solar job losses. High Court judge Mr Justice Mitting upheld their challenge; branding the Government's FIT cut proposal as unlawful.

Buoyed by their successful legal challenge, and the 43.3p FIT rate potentially being reinstated until April at least, the Solar Industry were dealt another blow when DECC confirmed that they would launch a counter appeal.

This appeal is scheduled to be heard by the Court of Appeal this Friday, 13th December, with a definitive verdict on the FIT rate expected. Although the outcome of the appeal is uncertain, the Solar Industry can at least take solace in the extra 197 million added to the FIT budget.

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