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Solar PV tariff cuts cast shadow over development industry

Developers and landlords will be discouraged from using solar panels to reduce CO2 emissions from the UK’s homes, offices and shops following cuts to the rate at which feed-in tariffs (FITs) are paid for renewable energy harvested from solar panels.

The British Property Federation today urged ministers to recognise that solar panels used on buildings, which would help businesses reduce occupation costs and allow landlords to invest in sustainable improvements to their properties, should be treated differently to so-called “solar farm” schemes built on green fields.

Despite the built environment being responsible for more than half of CO2 emissions, the Department of Energy and Climate Change today announced that it was to slash the FIT rate paid to the owners of all but the smallest installations of photovoltaic (PV) panels (see notes to editors).

Commenting Ian Fletcher, director of policy at the British Property Federation, said:

“The Government needs to make a distinction between large scale FIT schemes attached to buildings and those that aren’t. FIT schemes attached to occupied buildings generate free energy for occupiers and revenues for landlords to sustainably retrofit their existing buildings. With the cost of energy set to steadily rise over the next few years, these benefits for individuals and businesses would prove vital.

“Large scale renewable energy projects can benefit from economies of scale and put us on track to delivering on renewable energy targets in a cost effective manner. The Government's decision has undermined industry confidence in future and current incentive schemes, which will have a knock on effect on precisely the sort of investment which the Government wants to see.”

David Goatman, Head of Sustainability Consultancy at property agents Knight Frank, added:  

"Today the Government confirmed that the feed-in tariff for solar PV schemes larger than 50Kw will be cut drastically. Whilst we fully accept that public subsidy is hard to find in the current economic climate, it is the unavoidable truth that this change in policy will lead to the loss of green jobs and will stop commercial scale solar PV projects dead.”

NOTES TO EDITORS

Following today’s announcement, as of the beginning of August installations of solar power that are between 50 kilowatts and 150 kilowatts of capacity will receive 19p per kilowatt-hour produced, down from 32.9p. Larger installations of up to 250kw will receive a reduced tariff of 15p per kwh and field-size installations of between 250kw and 5 megwatts of capacity will get half that, at 8.5p per kwh. Both larger sizes were previously paid 30.7p per kwh.

The rates of support for anaerobic digestion go up slightly, and will be 14p per kwh for installations under 250kw of capacity, falling to 13p for installations up to 500kw.

DECC’s response to the FIT consultation can be found at: http://www.decc.gov.uk/assets/decc/Consultations/fits-review/fits-fast-track-government-response---final.pdf

For information contact Ian Fletcher on 020 7802 0112 or at ifletcher@bpf.org.uk.

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