UK Proposes Lowering FIT Rates

Announced the same day as the Ontario Power Authority's review of the Ontario Feed-in Tariff program, the UK Department of Energy and Climate Change (DECC) announced the start of its review of its Feed-in Tariffs scheme (FITs) on October 31, 2011 by releasing a comprehensive review document and requesting responses in respect of its solar PV program. The review is open for responses until December 23, 2011.

The review document proposes to reduce the prices offered to solar PV generating projects under 250kW commissioned after December 12, 2011 (projects between 250kW and 5MW will continue to be offered 8.5p/kWh, subject to adjustment per the Retail Price Index). Solar PV has led the FITs in terms of volume deployed and has had a substantial increase in the pipeline of potential FITs projects. That, coupled with the dropping cost of solar PV components and the rising cost of energy, has led to returns beyond the 5% originally envisaged which, in the DECC's view, is