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Joint Call for Evidence: Solar Feed-in Tariff

3 November 2011

The Environmental Audit Committee and Energy and Climate Change Committee are today calling for evidence on the Feed-in Tariffs for small-scale Solar Photovoltaic (PV) renewable energy, with a view to hearing oral evidence later this month.

The committees will examine the factors Government should consider when setting the rate of the Feed-in Tariffs in future, including the impact on electricity bills, 'green jobs', take-up of other renewables and energy-saving behaviours. The committees are interested in receiving written evidence that looks at the following themes of the inquiry:

  • Impact to date of Solar PV Feed-in Tariffs and the state of the solar energy market;
  • The balance between affordability and delivering the objectives of the Solar PV Feed-in Tariffs, including factors to consider when setting the rate of small-scale Feed-in Tariffs including jobs created, emissions reductions and energy-saving behavioural change;
  • The way in which the Government has managed the Solar PV Feed-in Tariff, the impact this has had to date, including the management of the Consultation;
  • Affordability of Solar Photovoltaic energy versus other renewable energy (given the overall levy-funded cap for energy bills) and the impact of Feed-in Tariffs on energy bills; and
  • Experience of similar incentive mechanisms for renewables in other countries.

Feed-in Tariffs

Feed-in Tariffs (FiTs) were introduced on 1 April 2010 to encourage the deployment of small scale (less than 5MW) renewable energy generation by businesses, communities and individuals. FiTs provide a payment for the electricity generated from installed renewable energy technology and a further payment is made for any energy generated but not used and ‘exported’ to the grid.

The FiTs have stimulated an increase in small-scale renewable generation, primarily solar PV - equivalent to 70,000 solar panels being installed since the scheme started. Some research has suggested that up to 10,000 jobs are expected to be created by April 2012 in the solar industry alone as a result of the current FiT tariff, with the potential to rise to 50,000 by 2015.

Reducing energy bills

The Department of Energy and Climate Change (DECC) estimates that a typical solar PV installation could reduce energy bills by £140 per year and could earn around £900 per year (tax free) for the household or business for the next 25 years. FiTs are not paid for by general taxation. Instead the cost is spread between energy companies who recover the cost from consumers.

Government review of FiTs

The Government is undertaking a comprehensive review of the FiTs, including tariffs and qualifying technologies. Phase 1 of this review will focus on Solar PV Feed-in Tariffs. A consultation on proposals under Phase 1 was launched on 31 October and is due to close on 23 December. Phase 2 will consider wider issues including tariffs for non-PV technologies, new cost control mechanisms and administrative aspects of the scheme. The tariff for larger solar PV (between 50kWh and 5MW) was reduced in August after a 'fast track' review.

Appeal for evidence

The deadline to submit evidence for this inquiry has now past.

Further Information