Death of the Feed-in-Tariff

The Feed-in-Tariff was first introduced in the UK in April 2010 to act as a financial incentive for homes and businesses to take up renewable energy. Succesful applicants receive a payment for the clean energy they produce receiving a guaranteed fixed price, indexed for inflation for 20 years.

The Feed-in-Tariff (FIT) has been extremely successful at encouraging the take up of renewable energy. Most installations in the UK could not have happened without it.

Unfortunately, the FIT subsidy is set to end in April 2019. As set out by the Government in the 2017 Autumn budget, “there will be no new subsidies for renewables until 2025”.

So what does this mean for the future of renewables in the UK? Thankfully, a dramatic fall in costs since 2010 means that access to solar power is much more affordable than it was. As the costs to store energy using battery power technology decline the time is approaching where there will be no need for subsidies after all, though making this happen by April 2019 will be a challenge.

Battery Storage

As the Feed-In-Tarff subsidy dimishes over the next year, solar power installers will be looking to use battery storage as a way of making new projects work financially. Being able to charge a battery with solar power means the electricity does not need to be consumed at the point of generation, instead it can be used when it’s needed, day or night. This could prove to be just the catalyst needed for wide-scale clean energy deployment.

Combining battery storage with renewable energy will unlock the door to using clean energy sources around the clock putting the final nail in the coffin for fossil fuels in our energy supply. Furthermore, in the same way that solar and wind power costs have plummeted, we can expect the price of battery storage to fall as production techniques improve and economies of scale take hold.

Battery Storage at Dyke Golf club

With falling costs, home storage is seen as increasingly attractive in the UK, particularly to early adopters, being the 850,000 homes with solar panels. The Tesla Powerwall, perhaps the best known energy storage battery, has recently become available in the UK, soon be challenged by a British made Nissan battery. Other British manufacturers are Powervault and Moixa.  There have even been suggestions that electric vehicle batteries can be connected to the grid to sell extra power at peak times, adding another incentive to becoming an EV owner.

The energy market is certainly set for some rapid and profound changes in the years to come. In the last part of our Energy Trends blog series, we’ll look at the emerging popularity of heat pumps and how smart meter will change the way we buy power.

“I wouldn’t want to be the MP in Parliament who voted to oppose Hinkley C”.
With a very concerned look mixed with fear, this quote comes from an insider in the Halls of Power of the Energy Industry. Yet he works for a company that has chosen to put at the heart of its strategy the preparation and facilitation of the transition to a distributed network. This, in essence, is a bet on the proliferation of local renewable energy generation, and a move away from the inefficiency of centralised power stations. A distributed network is needed when there are lots of energy generators installed on rooftops, in the hills, in the sea and under the streets of our cities, towns and villages.

BHESCo estimates that there is almost 50GW worth of applications for battery storage facilities wanting to connect with the 8 Distribution Network Operators and the National Grid. This is about 10 times the power generation capacity of Hinkley C and Moorside combined, at a fraction of the price to the taxpayer and to future taxpayers. Granted, this is an emerging technology, as yet without a track record, however in the 10 years it will take for these nuclear power plants to be operational, battery storage will have become mainstream. As Steven Holliday, former CEO of the National Grid, announced in 2015, “base load power is obsolete.[1]” Base load nuclear power is wasteful, where at present 60% of the electricity produced is lost in conversion, transmission and distribution.

Despite pleas from over 160 organisations, this year’s national budget includes a ‘Solar Tax’ collected in the form of business rates. If you own a solar array less than 50kW, the value of your property for business rates will be increased by the nominal value of the solar array on your roof. This will have enormous implications on small businesses that have become solar generators because the tax is most likely to approximate or exceed any benefit that they receive for the free electricity from the sun. Because any investment in energy generation requires a certain return in order for investors to commit their hard earned cash, a business rates tax on solar arrays eliminates any incentive to accelerate our transition from fossil fuels by investing in generating your own electricity.  The ‘solar tax’ is an intentional assault on free power from the sun as, for example, gas combined heat and power systems have been exempt from business rates since 2001.

Now consider the subsidies for investors in shale gas exploration, or ‘fracking’. This subsidy comes in the form of tax breaks called Enhanced Capital Allowances that permit firms that are investing in shale gas exploration to deduct the cost of the equipment directly against their taxable income, in many cases virtually eliminating any tax due. For companies like Centrica, who are a large investor in Cuadrilla, these tax breaks run into the millions [2] . Other similar tax breaks will be enjoyed by Ineos, who intend to invest £168 million in shale gas exploration (which at 40% tax relief, amount to £68 million) or IGas who invested £16 million in equipment in 2015. Nuclear power on the other hand costs the taxpayer billions each year for transport, storage and decommissioning of existing power plants alone, before we even being to count the cost of constructing new ones such as Hinkley C and Moorside, as each of these proposed plants are being constructed using unproven technologies. Simply put, the “solar tax” is an assault on the little guy, just another addition to the unfair tax policies that protect the 10% and burden the 90%, in this case, small businesses.

For anyone who believes that we must take responsibility for our energy supply now for the sake of our climate and our energy security, we wonder: what is the difference in tax receipts for the Treasury if the money comes from the clean energy industry or from dirty fossil fuels or nuclear? Or do we really want to spend our money as taxpayers supporting a government that is afraid to make the decisions that we need to ensure that we have clean, affordable energy in the future? Wouldn’t we rather ensure that our schools have sufficient funds to properly educate our children, or that the NHS continues to thrive as an accessible customer service focused health care system?

Join the fight today by writing to your MP, signing an anti-fracking or anti-nuclear petition, or becoming an investor in Community Energy.  Make sure that important decisions about our future are made from a position of courage, not fear.  Mostly make sure that you are informed, as such short sighted changes to tax legislation will have long term impacts on our quality of life.




Guest Blog, by Jaden Yang of University of California, Berkeley

solar battery

Distributed generation such as rooftop solar panels creates an economic democracy where every person can generate electricity from their own solar photovoltaic cells. Another benefit is lower transmission losses since the solar energy comes directly from their rooftop. However, one of the biggest challenges of renewable energy is energy intermittency. Solar panels on a rooftop can only generate electricity during daylight hours, and if a solar panel generates more electricity than you can use in the moment or does not generate enough, electricity must be exported or drawn from the grid to compensate. For this reason, solar panels do not always generate electricity when the domestic demand is greatest.


intermittant energy


Renewable energy has always faced challenges of consistency of supply and system integration. Some flexibility options to complement renewable energy are flexible peak power plants, grid integration, demand side management and battery storage. In California, a Net Metering policy that credits solar energy system owners for the electricity they add to the grid has given considerable benefits to solar panel owners. Unlike California, the UK has not implemented this policy widely, making battery storage systems a more attractive proposal to encourage the uptake of solar. Battery storage is not a new technology.  Up until now, due to its expense, it hasn’t been widely used in the UK. It would allow solar PV owners to generate, convert and save excess electricity for use at a later time, enabling users to make maximum use of the electricity they have generated themselves, as well as providing a solution to intermittency and production/demand mismatch.

In order to make battery storage affordable and feasible, government subsidies on green technologies can enhance both business and environmental performance. First, clean technology businesses can increase their research budget with government subsidies to improve and reduce the cost of battery storage. Secondly, if battery storage becomes popular, less people use electricity from the grid. Thus, once solar panels and battery storage systems become prevalent in a community, people have less dependence on traditional fossil fuel power generation, which will have the effect of reducing greenhouse gas emissions. Therefore, we believe there is enormous potential for battery storage to enhance domestic renewable energy production, which itself encourages the development of better batteries in a virtuous circle.