Department of Energy and Climate Change
Further measures to deal with the projected over-allocation of renewable energy subsidies have been announced today.
Keeping energy bills as low as possible for hardworking families and businesses is a top Government priority. Following a public consultation, the government has announced that they will be removing pre-accreditation for all new participants in the Feed-in Tariff (FIT) scheme from 01 October.
Pre-accreditation allows a developer to lock in the subsidy rate well before major construction work or installation to acquire the necessary planning and environmental permits and grid connections has been completed. This means that although the subsidy level may have reduced by the time electricity begins to be generated, the developer will receive the higher subsidy agreed when the plant was in the planning stage but not guaranteed to go ahead.
Removing this will provide better control over spending and ensure bill payers get the best possible deal as we continue to move to a low-carbon economy.
Energy and Climate Change Secretary Amber Rudd said:
My priorities are clear: we need to keep bills as low as possible for hardworking families and businesses while reducing our emissions in the most cost-effective way.
Our support has already driven down the cost of renewable energy significantly. As costs continue to fall it becomes easier for parts of the renewables industry to survive without subsidies, which is why were taking action to protect consumers, whilst also protecting existing investment.
The Feed in Tariff scheme is paid for under a mechanism called the Levy Control Framework (LCF). This controls a number of subsidy schemes which are paid for through energy bills. Latest projections show that these subsidies raised from bills are currently set to be higher than expected when the schemes under the LCF were set up.
The Government has provided vital financial support to the renewable sector which has helped new and innovative technologies, reduced our emissions and increased the amount of low-carbon electricity that powers homes and businesses across the UK.
A public consultation on a wider review of the Feed in Tariff is currently open, with the outcome of that consultation expected to come into force in early 2016.
Notes to editors
- The Feed-In Tariff is a subsidy levelled on consumer energy bills which guarantees a price per Kilowatt hour of electricity generated to the developers of Solar, hydro, wind, Micro CHP and Anaerobic Digestion
- The Governments full response to the FIT pre-accreditation consultation