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Investment in small scale low carbon projects is waning due to uncertainty over the future of feed-in tariffs (FITs), a wide-ranging coalition of energy bodies and landowners has warned the government.
Ten organisations have signed a joint letter to BEIS (business, energy and industrial strategy) secretary of state Greg Clark, highlighting concerns about delays to the government’s consultation into the future of the FIT regime.
They say that consultation into the replacement for FITs, which are due to close to new applications at the end of March 2019, is nearly a year overdue.
FITs provide a guaranteed payment for electricity generated from small-scale renewable energy installations, like roof top solar panels.
But the organisations warn that lack of clarity over next steps for FITs threatens to undermine investment in small scale renewable projects, which were left reeling following a 65% cut in the tariff rate three years ago.
The letter says: “Without a viable route to a market, the benefits that small-scale low-carbon energy projects can deliver to the UK risk being lost.
“This cliff-edge is creating considerable uncertainty for the organisations and groups we collectively represent.
“Investor confidence in the sector is waning, with developers increasingly looking to invest elsewhere. UK communities and business, as well as industry, risk missing the opportunities that come with developing a vibrant small-scale energy sector.”
According to the letter, FITs have supported much of the small-scale low-carbon generation installed in the UK, contributing to lower greenhouse gas emissions, helping to create a more dynamic and flexible energy system and boosting local economies.
The Helm review of energy costs, which was published last October, recommended that FITs should be scrapped along with other subsidies for nuclear and renewable energy.
Energy and climate change minister Claire Perry has agreed to meet the letter’s signatories to discuss their concerns.
The letter was signed by the Anaerobic Digestion & Bioresources Association, Community Energy Scotland, the Country Land & Business Association, EnergyUK, National Farmers Union, Scotland Regen, RenewableUK, Scottish Land and Estates, Scottish Renewables and the Solar Trade Association.
Hannah Smith, senior policy manager at Scottish Renewables, said: “The deadlock over the Feed-in Tariff’s future must be resolved as soon as possible. Our industry can then go on doing what it does best: creating jobs and cutting harmful emissions from our energy sector.”
RenewableUK’s executive director Emma Pinchbeck said: “Delays might be all very well in Whitehall – but they can translate into job losses for small businesses across the UK. We need clarity as soon as possible for the sake of these firms and community energy projects nationwide”.
Chris Hewett, Chief Executive of the Solar Trade Association, said: “The solar industry responded to government support through Feed-in-Tariffs by installing solar PV on nearly a million buildings in the last decade.
“We are ready to move into the next phase as subsidies reduce, but cannot develop viable business models until we know the rules under which we will be operating beyond spring 2019.”
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