The Department of Energy and Climate Change (DECC) has today crushed hopes that the UK’s solar industry would have a large-scale future, reports the Solar Power Portal. After weeks of anticipation, the country’s Government has revealed that it plans to go ahead with proposed tariffs, which decrease large-scale incentives down to 8.5p per kilowatt hour.

The fast-track review, which the UK Government has been consulting on since new tariff rates were proposed on March 18, looked at reducing the tariffs for PV systems over 50kW in order to protect the money available for small-scale projects.

Energy and Climate Change Minister Greg Barker said, “I want to drive an ambitious roll out of new green energy technologies in homes, communities and small businesses and the FiT scheme has a vital part to play in building a more decentralised energy economy.

"We have carefully considered the evidence that has been presented as part of the consultation and this has reinforced my conviction of the need to make changes as a matter of urgency. Without action the scheme would be overwhelmed. The new tariffs will ensure a sustained growth path for the solar industry while protecting the money for householders, small businesses and communities and will also further encourage the uptake of green electricity from anaerobic digestion.”

The new tariffs (below) will go ahead from August 1, 2011 and will apply to all new market entrants.

>50 kW – ≤ 150 kW Total Installed Capacity (TIC) - 19.0p/ kWh

>150 kW – ≤ 250 kW TIC - 15.0p/ kWh

250 kW – 5 MW TIC and stand-alone installations - 8.5p/ kWh

The DECC received over 500 responses, which it claims were carefully analysed before a decision was made regarding the change in tariffs. The fast-track review reportedly revealed that the number of planned larger PV projects was much higher than originally expected.

“Without urgent action, the scheme would have been overwhelmed within a very short period of time. Every 5MW large scale solar scheme would incur a cost of approximately £1.3 million per year, which means that 20 such schemes would incur an annual cost of around £26 million, money that could support PV installations for over 25,000 households,” outlined the DECC’s press release.

The changes will now have to go through UK Parliamentary and State aid clearance. Solar schemes under 50kW are not affected by this review.