Isra-Mart srl:Updated: Government to tackle solar farms with early feed-in tariff review

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The government has today announced it will conduct a "fast-track" review of the feed-in tariff (FIT) scheme in an attempt to address growing fears that the popular renewable energy incentive mechanism is being hijacked by large solar farm developers.

Ministers have been voicing fears for several months that the scheme, which guarantees small-scale renewable energy installations payments in return for the energy they generate, is being dominated by solar farm developers who threaten to eat into the funding available for onsite installations such as rooftop solar panels and micro wind turbines.

"We are fully committed to the rollout of decentralised renewables, but we have to manage the strategic rollout of these new technologies within a sensible budget," climate minister Greg Barker told BusinessGreen. "We are 110 per cent committed to solar energy and feed-in tariffs, but the scheme was never designed for large-scale solar farms. In order to deliver long-term certainty and avoid knee-jerk reactions, we have acted to bring forward the review."

Barker said the comprehensive review would be completed by the end of the year, but would seek to fast-track decisions on the tariffs for anaerobic digestion plants and larger solar projects with more than 50kW of capacity. A decision on the level of support for solar farms is now expected by the summer.

In contrast, all other renewable energy technologies covered by the scheme are expected to experience no changes to the level of incentives until April 2012. "This review will help set the course for the industry for the long term," said Barker. "It will also allow us to look at a different mechanism for reviewing tariff levels in the future that would avoid precipitous drops in support."

The move is likely to prompt protests from solar farm developers, who have been arguing in recent months that large solar parks are a more efficient means of generating clean energy than rooftop solar installations.

But Barker insisted the FIT was never designed to support large-scale solar projects, and as such the changes were necessary to protect the £360m budget earmarked for the scheme through to 2014. He added that any changes would not be retrospective and the 20,000-plus installations already accredited for FITs will not be affected by any of the changes.

He also hinted strongly that anaerobic digestion (AD) technologies could expect an increase in the level of support, expressing disappointment that only two projects have so far been approved for the FIT scheme.

The move was broadly welcomed by industry group the Micropower Council, which issued a call for an early review of the scheme late last year, arguing that it would provide the industry with greater certainty.

Dave Sowden, chief executive of the Micropower Council, said the review would deliver certainty that the bulk of tariffs will remain unchanged until April 2012. "Our main recommendation was to ensure a minimum amount of time between any review and changes to the tariffs – otherwise you risk getting an investment hiatus," he explained. "This gives firms certainty that, apart from for larger solar PV projects and AD, tariffs will remain unchanged until April 2012 – that will not cause demand to dry up; in fact it should have the opposite effect."

However, he expressed concern that the government's decision to review solar projects with more than 50kW of capacity could affect some larger building-integrated projects.