When it comes to renewable energy, making the right choice is not always easy. With the government recently announcing plans to cut feed-in tariffs (FiTs) by up to 87% for some renewables in 2016, and the ruling that the reduced VAT of 5% on energy saving technologies is unlawful under EU regulation, there could be tough times ahead for the industry. Whilst most FiT contracts hold for 20 years, meaning that existing installations will be largely unaffected, these political factors should be navigated carefully when it comes to new projects.
Since feed-in tariffs replaced government grants in 2010, the installation of renewable energy technologies have become highly popular, with uptake exceeding expectations and thus exceeding cost expectations too. Limited by the Levy Control Framework (LCF), the Government adds to consumer bills to pay for low-carbon electricity generation and deployment of small-scale renewables. The Department of Energy and Climate Change (DECC) has recently acknowledged that they expect to breach the limits of the LCF, and have announced these cuts in order to improve value for money for the bill payer.
Have your say: Find the DECC’s Consultation on a review of the Feed-in Tariffs scheme here.
Whilst these changes may seem severe for the UK renewables industry, we must remember that there are other factors at play: Installation costs have dropped dramatically over the last decade and DECC released data revealing that renewables provided a record high 25% of all UK energy over the second quarter of 2015. Installing renewables is still likely to be a viable option and to save you money in the long run, it is just more important than ever to install the right technology at the right time. The proposed cuts will not be implemented until January 2016 and with some projects experiencing superior benefits from the current tariffs, it could be the right time to put plans into place.
E4environment are up to date on the latest trends and can offer expert and impartial advice on a range of renewable energy technologies. Give us a call on 01743 343403 or email firstname.lastname@example.org.