23 OCT 2015

Feed-In Tariffs

The Government is committed to meeting 15 per cent of the UK's energy demands from renewable resources by 2020, and FITs have led to levels of renewable energy deployment that have surpassed all expectations. By the end of the year deployment under the FIT scheme will have already exceeded the Government's 2012 projections for wind, hydro and anaerobic digestion in 2020-21, and is expected to be within the predicted range for solar before then too.

It is good news for the environment that renewable energy has been rolled out sooner than anticipated, but the extra costs associated with providing FITs are paid by customers through their energy bills. That is why the Government is now consulting on proposals designed to relieve the pressure on energy customers from rising costs.

The consultation raises questions about a set of proposed new tariff rates, based on the latest information about how much these schemes cost. It also suggests capping spending on new FITs at £75-100 million by 2018-19, so as to avoid the need to stop providing tariffs for new generation projects entirely. Existing facilities would not be affected by these changes.

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