The UK had indicated in 2015 that the generation tariff under the FiT scheme would end in March 2019 but Thursday’s announcement means the export tariff for new instalments will also be scrapped, effectively killing the whole scheme.
With no revenue now available for either generating or exporting excess power to the grid, the small-scale renewables sector could stagnate in the same way that the larger-scale solar and onshore wind industries have since the removal of the renewables obligation (RO).
While the government has not necessarily destroyed confidence in the smaller renewables sector with this announcement, its next steps and response to the call for evidence will be critical.
Closure of the export tariff will arguably be a bigger blow to the sector than the generation tariff as selling power to the market for smaller participants is likely to require greater expertise. Some policy to ensure the export tariff is calculated on a fairer basis is likely to be proposed by the sector.