Perry defends government decision to axe FIT scheme

Claire Perry has poured cold water on calls to extend the government’s existing scheme to support small-scale renewable generation.

During a parliamentary debate this Tuesday (5 March) on solar energy, the energy and climate change minister defended the government’s decision to axe the feed-in tariff (FIT) scheme that has subsidised the installation of small-scale renewables kit by households and small businesses.

Alongside the abolition of the FITs, which is due to kick in at the end of this month, the government is also scrapping the export tariff that pays a fixed rate for surplus electricity from the devices.

The government has produced proposals for a replacement scheme called the smart export guarantee, consultation on which closed earlier this week.

However the interregnum between the imminent closure of the existing scheme and the new arrangements being rolled out has prompted concerns that the solar installation industry will be left high and dry.

Backbench Conservative MP Antoinette Sandbach appealed for reassurance that the replacement scheme will be fully operational in time.

If not, she urged the minister to extend the FIT scheme until the new scheme is up and running.

“A fair minimum export price will ensure that consumers are not ripped off while the industry and the new regulation sort themselves out,” she said, pointing to the UK’s recent ranking bottom out of 20 countries in Solar Power Europe’s global market outlook for 2018 to 2022.

Sandbach also said that a floor price would encourage suppliers to get their systems ready for market-wide, half-hourly settlement, which is seen as key to the transition to a smart energy system.

But responding to Sandbach’s appeal, Perry said: “In all honesty, probably not. We have been clearly signalling the closing of the FIT scheme for several years now.”

And she warned about the risks of rushing to put a new replacement scheme in place.

“I really want to get this right. I do not want this to be a scheme that we are debating in three years’ time because it has suddenly become unaffordable and has not delivered.

“We do not want to create a hiatus, but we want to produce a set of incentives that works for the future.”

She said that the FIT scheme has already added £6 billion to electricity bills, which will rise to £30 billion over its lifetime, and solar power no longer requires subsidy due to the plunging cost of equipment.

People who already have FITs will continue to receive payments under the scheme but those installing new equipment will not receive the subsidy after 31 March.