UK: DECC Proposals to Protect FITs Scheme

Last Updated: 5 April 2011
Article by Humphrey Douglas and Wei Wu

On 18 March 2011, proposals to reduce the financial support available to larger scale solar electricity generation projects were published by the Department of Energy and Climate Change (DECC), as part of plans to protect micro-generation financial support for homes, communities and small businesses.

The consultation follows the launch in February 2011 of a fast-track review into Feed-in Tariffs (FITs) for solar photovoltaic (PV) over 50kW after it was shown that there is already 169MW of large scale solar capacity planned.

Fast-track review of the FITs scheme

"These proposals aim to rebalance the (FITs) scheme and put a stop to the threat of larger-scale solar soaking up the cash. The FITs scheme was never designed to be a profit generator for big business and financiers."
Greg Barker

On 7 February 2011, Greg Barker, the Minister of State, DECC, announced the start of the first comprehensive review of the FITs scheme for small scale low carbon electricity generation which would assess all aspects of the scheme including tariff levels, administration and eligibility of technologies. This comprehensive review is to be completed by the end of 2011, with tariffs remaining unchanged until April 2012 (unless the review reveals a need for greater urgency).

Greg Barker expressed the view that the projections for take-up of FITs published by the previous government failed to anticipate any large or small scale non-domestic solar PV installations until 2013. Current market indications are that a rapid increase in the number of larger solar installations entering the scheme could distort funding for smaller and domestic scale installations as well as other technologies. Conversely the current tariff levels have failed to spur a meaningful uptake for anaerobic digestion (AD) which means that this technology is not fulfilling its potential contribution to our energy mix.

The consultation announced on 18 March 2011, which seeks views on proposals to change tariffs for solar PV installations larger that 50kW and farm scale AD of up to 500kW.

The proposed new bands and tariffs are as follows:

For large solar PV installations

  • 19p/kWh for 50kW to 150kW
  • 15p/kWh for 150kW to 250kW
  • 8.5p/kWh for 250kW to 5MW and stand-alone installations

These compare with the tariffs that would otherwise apply from 1 April 2011 of:

  • 32.9p/kWh for 10kW to 100kW
  • 30.7/kWh for 100kW to 5MW and standalone installations For farm-scale AD installations
  • 14p/kWh for AD installations with a total installed capacity of up to 250kW
  • 13p/kWh for AD installations with a total installed capacity of between 250kW and 500kW

These compare with the tariffs that would otherwise apply from 1 April 2011:

  • 12.1p/kWh for farm scale AD up to 500kW.

Evaluation of the FITs scheme

"Our cash for green electricity scheme is a great way to reward homes, communities and small businesses that produce their own renewable power."
Greg Barker

Greg Barker stated that the FITs scheme has been a success since its launch in April 2010 with over 27,000 FITs installations registered to date, of which 92 per cent are domestic-scale solar PV generators, which are not affected by the proposed changes in the fast-track review. The FITs scheme rewards generators for the green electricity they produce, use and sell back to the grid.

Looking forward

"I'm committed to an ambitious roll-out of microgeneration technologies as part of the Coalition's green vision of a much more decentralised energy economy."
Greg Barker

Greg Barker pointed out that decentralised renewables are a vital part of green growth and the FITs scheme has proved highly successful at stimulating growth, driving innovation, creating jobs and cutting carbon. Greg Barker urges government actions to ensure that the FITs scheme continues to deliver and to achieve both the Spending Review commitment to improving the efficiency of the scheme, which it is said, will deliver Ł40 million of savings (around 10 per cent) in 2014-15, as well as ensuring that the benefits of a faster fall in technology costs are shared as widely as possible rather than captured in higher returns for a small number of individual investors.

Consultation deadlines

The Government is seeking views on proposed tariffs for solar PV over 50kW and farm-scale AD of up to 500kW until 6 May 2011. The fact that "alternative suggestions" are also sought perhaps suggests some real room for negotiation and perhaps flags the Government's concern to engage with the renewable energy industry to minimise further investment uncertainty.

The Government is also seeking views on the scope of the FITs comprehensive review by 12 April 2011. Evidence received will feed into the scope of this review and help inform if further changes to the legislation are necessary. This is a statement which is unlikely to encourage investor certainty.

The Government has already stated that it will not act retrospectively and any changes to generation tariffs implemented as a result of the review will only affect new entrants into the FITs scheme. Installations which are already accredited for FITs at the time will not be affected. The consultation however, currently envisages tariff changes taking effect from 1 August 2011.


Whilst some of the consultation questions may perhaps be described as somewhat leading (eg: "Do you agree or disagree that there is a need to limit access to FITs for large scale solar PV installations in order to meet Spending Review targets ..."), it will be interesting to see how much in terms of financial modelling information, respondents are prepared to disclose in demonstrating whether the proposed returns remain available and economically viable in any event.

No doubt there will now be an intense period of tariff lobbying, albeit during a seemingly very limited period. The renewable energy industry will be scrutinising the process and outcome carefully, particularly given that the outcome may have repercussions for the Government's ability to attract even greater private sector investment for the proposed broader, electricity market reform.

See also the following relevant links to the DECC website:

"Feed-in Tariffs: Written Ministerial Statement by Gregory Barker, Minister of State", wms gb/fits wms gb.aspx

"Greg Barker outlines proposals to protect green electricity scheme (Press notice)", 027/pn11 027.aspx

"Consultation on fast-track review of Feed-in Tariffs for small scale low carbon electricity", review/fit review.aspx

Online response for Consultation: "DECC eConsultation Hub",

"Feed-in Tariffs (FITs)", we do/uk supply/energy mix/renewable/feedin tariff/feedin tariff.aspx

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.