UK will not slash feed-in tariffs


After much speculation and debate that the coalition government in the UK would slash the feed-in tariffs set by the Department of Energy and Climate Change, Osborne who got appointed as the Chancellor of the Exchequer in May this year delivered good news. He finally announced at the House of Commons today that the efficiency of the feed-in tariffs will be improved at the next formal review. His speech initiated that there will be no cuts to the country’s feed-in tariffs.

The feed-in tariffs that were formed under the former Labour government were at risk of being on the chopping board under the Spending Review which allocates UK’s budget for the next years. However, the UK Spending Review highlights under point 2.104 that "The efficiency of feed-in tariffs will be improved at the next formal review, rebalancing them in favour of more cost effective carbon abatement technologies. This will save £40 million in 2014/ 2015."

The review also highlighted that over a billion pounds (approximately 1.13 billion euros) will be set aside for the Green Investment Bank. Nevertheless, Osborne stressed in his speech that he expects more investment from the private sector into the renewables market. The Review also further states that it will support a low carbon economy and will commit to reducing UK’s carbon emissions and £200 million will be set aside for the development of low carbon technologies. The Review thereby spells out that the feed-in tariffs will see a rediversion towards the most cost-effective technologies in 2014-2015 unless higher than expected deployment requires an early review.

Ray Noble, PV specialist at the Renewable Energy Association and former head of BP Solar UK, told pv magazine, "We are nowhere near fulfilling our EU obligations for renewables, and the penalties are going to cost us much more than even solar power would.” He is also quoted as saying that if the UK government slashed the feed-in tariffs, they can forget about private sector funding for renewables. After the release of the review, Noble believes that the outcome could not have been better for the UK solar industry.