The Government has effectively capped the amount of money that it will allow to be spent on Feed In Tariffs. The spend in year 2014-15 cannot exceed £360m (which is a 10% reduction on the previous estimate of £400m). Therefore, if the scheme is not to simply close to new entrants at the point when additional capacity would take the annual spend over £360m, then Government will have to alter the tariffs with the objective of keeping demand within this cash cap.

What does this cap equate to in MW of power. Italy had a cap of 1.3 GW of SOLAR power. Their industry worked rather well. Is our FIT CAP technology specific or all encompassing?

The REA disagrees with the Government position, for obvious reasons. Some of there points in summary are:

• Tariffs should not be volume capped, it goes against the whole principle of a tariff-based mechanism
• The 1.6% contribution assumed from small scale renewables had always been viewed as the estimated contribution, it was never originally intended to be a cap
• In opposition both Lib-dem and Conservative spokespeople had called for greater ambition.
• Industry has already started responding to the feed in tariffs, and made significant investments and started to develop innovative financing approaches
• Some of the projects involved have long lead times
• This should be all regarded as a great success, as it brings multiple benefits to UK plc
• Knowledge that the scheme is now firmly capped will dramatically undermine investor confidence
• The impact of this will spread much wider than just for small scale renewables or PV in particular
• Around £450bn investment is envisaged to deliver the low carbon energy system – to deliver this maintaining investor confidence is paramount
• This track record does not bode well if the intention is to replace the RO with feed in tariffs

If the spend in 2015 is to be no more than 360 million. I'm curious to know what that equates to in terms of % of the UKs electricity generation..? Considering that we are looking to shut down high carbon powers stations (Coal / Nuclear). Should they rase the cap?

Do you have any thoughts?