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Renewable energy news – some good some bad!

Not surprisingly, we are getting a number of enquiries for finance for renewable energy projects. Whilst we get some enquiries for finance for anaerobic digestion plants (where the investment is higher) most enquiries are for finance for wind turbines or finance for solar panels.

A recent  announcement by the Department for Energy and Climate Change (DECC)  could spell progress for some on-farm anaerobic digestion projects, but the news might not be so good for small to medium solar electricty schemes.

The promised uplift to small-scale biogas tariffs, which resulted from the 2011 ’fast-track’ Feed-In Tariffs review, should have been implemented on August 1st, however, the increase was conditional on EU state aid approval. Accordingly, progress was held up for two months by the European Commission, which has now approved the new tariffs.

 The changes to the generation tariffs take effect automatically, and will apply to  installations with an eligibility date from 30 September 2011. These are as follows:

• Anaerobic digestion plants up to 250 kilowatts – 14p/kWh, representing a 16% increase over the previous 2011-12 tariff of 12.1p/kWh.
• Anaerobic digestion plants 250-500 kilowatts – 13p/kWh, representing a 7% increase over the previous 2011-12 tariff of 12.1p/kWh.

Whilst this announcement will help to progress some marginal on-farm projects a spokeman from the National Farmers Union has suggested that the new tariffs alone are not likely to result in the rapid growth needed to deliver multiple environmental benefits. The spokeman went on to say that the NFU has heard about the possibility of another big cut to the future levels of solar PV tariffs, to take place sooner than the anticipated reduction FITs planned for April 2012. The uptake of solar electricity this year has exceeded previous government predictions and budget pressures could result in drastic reductions to tariff rates earlier than expected. It is anticipated that this might hit the small to medium scale projects i.e. under 50 kilowatts.

It is therefore important to seek professional advice before emabarking on this type of project.

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