FITs reductions get mixed reaction from renewables industry

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The solar industry has responded with mixed feelings to DECC’s new proposed changes to the Feed-In Tariff system for small scale renewable energy, announced yesterday.

In its response to the consultation on FITs for solar PV, the government admits that 81% of respondents disagreed with their proposed reduced tariffs for solar PV installations and with the proposed reference date of 12 December 2011, compared to 12% who agreed.

Nevertheless, it is proceeding with the tariff reductions, and with the appeal to the Supreme Court over the legality of the cut-off date for the higher tariff rate.

The new tariff rate includes a drop to 21p/kWh for systems under 4kW, until June 30. It estimates the cost to taxpayers of all the new tariffs to be £1.2 billion over 25 years.

The reductions are based on research showing that the average cost of a 2.6kW system has dropped from £15,000 in 2010 to £12,000 in 2012. They aim to provide an approximate 5% rate of return to their owners for well located installations.

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