The future of the FiT scheme was established by the Department of Energy and Climate Change (DECC) today, following consultation in February.
The final package of changes announced by Energy and Climate Change Minister Greg Barker aims to provide greater certainty for investors in renewable heat and small-scale electricity technologies.
This is part of a comprehensive review designed to ensure value for money for the consumer and long-term certainty for those who choose to invest.
“I want to provide long-term certainty for those choosing to invest in all forms of small-scale green electricity generation, not just solar, and our changes to FITs will do just that,” said Barker.
“As well reducing tariffs over time for AD, hydro and small-scale wind in line with uptake, we are introducing tariff guarantees for all technologies - great news for projects with long lead in times.”
Changes to solar tariffs, which have already been announced, will take place from 1 August.
Any changes in tariffs will be published two months before their introduction and will be based on publicly-available data.
MicroCHP will not be subject to degression due to an existing cap at 30,000 installations with a review of tariff and deployment levels at 12,000 installations.
The degression mechanism for solar was outlined in the Government response published in May.
This means that developers of larger projects can start building with the knowledge they will be eligible for the FiT on completion. Such projects will be guaranteed the tariff rate at the time of approval, providing that they finish within two years of receiving it.
A system of advance tariff guarantees will also be available to non-domestic community energy PV projects up to 50kW.
‘Community’ has now been defined on the basis of existing tax law and will include schools even where they do not meet the definition of community scheme. Changes will take effect from 1 December, subject to parliamentary and state aid clearance.
Dave Sowden, chief executive of the Micropower Council said: “We welcome what is broadly a very positive set of proposals that should bring greater confidence to investors and customers.
“We will continue to monitor progress of the technologies supported by FITs with a view to maintaining constructive dialogue with DECC to inform further developments to the scheme.”
Paul Thompson, head of policy at the Renewable Energy Association agreed, particularly welcoming the support for community schemes and the improvements to the cost control mechanism.
“These decisions demonstrate that DECC has listened carefully to industry concerns, and should restore certainty to the sub-5MW sector,” he said.
“The introduction of tariff guarantees for projects at a relatively early stage is also very helpful, and we look forward to a similar approach being extended to the Renewable Heat Incentive.”