It’s rare that a campaigner agrees wholeheartedly with government, but that’s how I feel about today’s announcement on feed-in tariffs. Why? Because companies can no longer profit from large-scale solar schemes.
Feed-in tariffs – or FIT – were first launched last year to support people to generate their own renewable electricity.
These people can earn money for every unit of electricity the feed back into the grid. But it’s not free money, all of us pay for the scheme through our energy bills, so we believe the scheme must give value for money.
Today’s announcement confirmed that the government will reduce the rates they pay for large-scale solar, but only for new installations. This will only affect large-scale operations, such as big solar farms, not household schemes or many community schemes.
We support fairer FITs
The new tariffs won’t be popular with the solar industry but we’re glad the government stuck to its guns. It means that more of the FIT payments – which come from people’s pockets – will be protected for households, communities and small businesses.
These are the people the scheme was designed for; not for big businesses to make profits from investment-scale schemes. The changes announced today mean that large-scale installations aren’t going to be so attractive to companies looking to earn a big payback from schemes subsidised by UK electricity users.
The trouble is that when the scheme was launched last year, the previous government didn’t predict that companies would cotton on to the fact that there’s money to be made here.
The Department of Energy and Climate Change’s (DECC) figures showed an alarming number of large schemes were in the planning pipelines – they estimate that just one very large scheme would swallow up the cash that could be spent in one year on renewable technology for 1,250 homes.
What’s the true cost of FIT?
We all pay for the FIT through our electricity bills – DECC estimated in 2010 that it would add about £8.50 a year to each household’s bill in 2015. While that doesn’t seem like a lot, some businesses are cashing in by installing big solar PV systems that can earn them tens of thousands of pounds a year.
So while we support today’s announcement, we want government to go further by working out how much we’re paying for FIT and other environmental schemes through our bills. DECC admitted to us that all that it has are estimates on whether the £8.50 prediction is true; nor can it tell how much the amount added to domestic consumer bills compares to business bills.
FIT should be as value for money and cost-effective as possible in delivering its objectives of reducing carbon emissions, and helping people cut their energy bills. We’re not against FIT, we just don’t want consumers writing a blank cheque for a scheme that not everyone can benefit from.
It’s estimated that 4.5 million people already have difficulty paying their energy bills, so the payment for FIT coupled with the other schemes we automatically pay for through our bills like CERT, could soon push the costs up, forcing more people into fuel poverty.
Do you think that the FIT system is fair? Is it worth paying £8.50 per year for the environmental benefits? Do you agree that DECC needs to be more transparent about how much you are paying in your bill for it?
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