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Future Uncertain for Renewable Energy Feed in Tariffs

By Simon Kent - 14 Feb 2011 12:51:0 GMT
Future Uncertain for Renewable Energy Feed in Tariffs

The UK government are facing criticism and anxiety from the renewable energy sector for bringing forward their review of the Feed in Tariff scheme designed to encourage and support renewable electricity generation.

Under the scheme, subsidies would be paid to households generating their own power from renewable resources - solar, wind power etc. - as well as other generation projects.

However, the scheme may have been a victim of its own success with the prospect of companies building large scale solar farms being eligible for the lion's share of the finance, a situation that has caused the Department for Energy and Climate Change (DECC) to place the Tariffs under review sooner than expected.

The scheme was launched in April 2010 but Secretary of State at DECC Chris Huhne notes: ''Large scale solar installations weren't anticipated under the Feed in Tariffs scheme we inherited and I'm concerned this could mean that money meant for people who want to produce their own green electricity has the potential to be directed towards large scale commercial solar projects.''

However, there are concerns within the industry that the review - and expected cuts - is purely a financial consideration rather than a strategic one. Indeed, reducing the Feed in Tariff without introducing an alternative reward scheme could harm the creation of a viable renewable energy industry within the UK.

It seems clear the larger green power generation initiatives will lose the finance they expected from the scheme while the general uncertainty produced by this move could put investments in the sector on hold.

The Renewable Energy Association (REA) has expressed concern at the new uncertainty that now surrounds these tariffs and notes some members may take legal action over the changes.

Ken Moss, CEO of mO3 Power says of the Feed in Tariff: ''It is subsidising large scale solar developments which is the most efficient use of taxpayers money. Commercial developments have the capacity to drive down the technology costs, produce more power, and cost less.''