There is growing concern about the ongoing delays to the consultation on changes to the Feed-in Tariff.
Back in the spring, DECC said it would consult on the so-called comprehensive review “later this year”, with a view to completing the review by the end of 2011, and introducing new tariff rates by April 2012, unless the review indicated the need for greater urgency.
A cross-party Parliamentary Renewable and Sustainable Energy Group of government and industry representatives met last week to discuss the implications of the FiT review. According to Andrew Watkin from Carter Jonas, who was at the meeting, it was made clear that DECC had made no decision about the review yet, but an announcement was expected to be “made soon”. It was suggested that DECC faced numerous issues, notably the need to stay within the FiT budget of £360m in 2014-15 and there were no resources available to support an overspend.
The delays and continued uncertainty were denting investor confidence and could cause some to run out of time to get installations up and running before revised rates came into effect, Mark Newton from Fisher German said.
“Planning permission typically takes three months for a solar project on a commercial or agricultural building. A grid connection can take 6-8 weeks, so even if the FITs review is delayed until 1 April, then time is already running out.”
But if the review did find a need for “greater urgency”, he said a six-week fast track review could change FiT rates before 1 April. “Some solar installers are telling us that the last orders they are taking are by the end of October, as they do not want to be holding a large stock of solar panels they cannot use.”
Mr Newton advised anyone considering a project to progress with plans immediately, as returns were likely to be lower following the comprehensive review. “This is a one-off opportunity to get a 10-15% return that will certainly disappear on 1 April or earlier.”
Mr Watkin added: “With the current economic climate and confidence in the UK financial sector being seriously low along with major economic unrest across Europe, what the UK market requires is a steady hand at the tiller.”
This would allow all involved in the sector to “move forward and progress technology developments with greater certainty, as opposed to a knee-jerk reaction with regard to tariff levels and a resultant negative impact on investor confidence”.
• For more information on the comprehensive Feed-in Tariff review, go to http://www.decc.gov.uk/fits