UK “Feed in Tariff” scheme closed on 31 March 2019

The UK’s Feed in Tariff (FiT) scheme was introduced in 2010 to promote small-scale renewable and low-carbon electricity generation technologies. Since its inception, households and small businesses (including many farming businesses) that have installed such technologies have been eligible for payments depending on the amount of electricity their installations generate and export to the grid.

Since the FiT scheme was introduced, it has particularly encouraged the growth of solar power. According to one source, the scheme has enabled approximately 800,000 households and 28,000 businesses to generate clean and renewable power. Recently, it was recorded that solar power was responsible for generating around 10% of the UK’s electricity.

However, following an announcement in 2015, these tariffs were closed on 31 March 2019, meaning that applications for the tariff will no longer be accepted.

Critics argue that this change will reduce job and investment opportunities and is a step back in the UK’s conversion to clean renewable power. The Department for Business, Energy and Industrial Strategy (BEIS) has counter-claimed that the closure is intended to encourage and take account of the growth of other technologies (such as more efficient batteries) and the evolving technology on clean energy production, and that an average of £1 per household will also be saved.

A key consequence is that, with the removal of these tariffs, homeowners and small businesses with qualifying installations (such as solar panels) will lose out, as the additional units of electricity that they do not consume will be given to the grid for free.

In spite of the closing of the FiT scheme, there is optimism for the future of small scale renewables, particularly solar power. As above, the FiT scheme facilitated huge growth of solar power in the UK resulting in fiercer competition amongst solar installation suppliers. The result has been a considerable price drop since 2010, which is likely to make installing solar power generators more attractive to investors and domestic suppliers moving forward.

Nevertheless, the closure of the FiT system will bring new challenges in the UK hitting its renewable energy and climate targets.

Sam Read is a solicitor in the property department at Barker Gotelee Solicitors in Suffolk.

This article first appeared in the East Anglian Daily Times 30th March 2019.

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