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August 1 new deadline for FIT cuts

Posted by Chloe Bennett on 24th May 2012

Last week we announced that changes to the Feed-in-Tariff had been delayed due to recent low solar installation figures. It was first proposed that new cuts would come into force 1st July 2012. However due to the 40 days’ notice required by law to protect ‘unlawful’ moves from the government, we can now expect the cuts to come into play a month later than first expected. This delay could have been caused by a number of factors but consumer confidence and news that the UK has slipped back into recession are thought to be amongst the two main reasons.

Since the revision figures have been introduced, the total installation figures for solar PV have naturally declined. The official introduction of the 21p kWh rate saw the total number of PV installs decrease from a whopping 9,009 in the last week of March 2012 to just 859 in the first week of April. Now more than ever it is important to broadcast positive message to all and try to win back consumer confidence.

The new FIT rate, now announced to come into play August 1st 2012, will be 16p kWh for domestic homeowners. Furthermore, all tariffs will decrease on a three month basis, starting on October 1 and are set to decrease at a rate of 3.5% unless a 'rapid uptake occurs.'

Barker commented, "We can now look with confidence to a future for solar which will see it go from a small cottage industry, anticipated under the previous scheme, to playing a significant part in Britain's clean energy economy."

In addition to the newly introduced lower tariff, other revisions include:

Export tariff will be increased from 3.2p to 4.5p/kWh for those installations with an eligibility date on or after August 1;

The expect FIT lifetime will be now decrease from 25 to 20 years for those installations with an eligibility date on or after August 1; and

Tariffs for installations that do not meet the energy efficiency requirements will mirror the tariffs for standalone installations.

We can now expect a small boom in this 10 week window before the new rate comes into play but it should be enough to get the market going again.

 

Categories: decc, renewable energy, solar pv, feed-in-tariff

Another interval in the solar show?

Posted by Chloe Bennett on 17th May 2012

After the 21p kWh Feed-in-tariff rate was finally introduced 1 April 2012, we have all been preparing ourselves for the next reduction set to take place in July this year. However Energy and Climate Change Secretary, Greg Barker, seems to have had a change of heart and confessed his feelings towards the projected decrease on twitter on Wednesday 15th May. "Having listened carefully to industry, we are looking at scope for pushing back a little the next proposed reduction in solar feed-in tariffs.”

One could argue that this ‘delay’ in announcing future cuts to the subsidy could bring back another bout of uncertainty however Mr Barker has reassured the nation by responding “On the contrary, we are listening carefully to industry & full details of new much improved FITs regime will be published v shortly.”

On one hand this delay could been seen as another blunder in the way the government has dealt with the popular Feed-in-Tariff however it does mean that installers will be able to supply their customers with the higher rate of 21p kWh for a little longer than once expected.

As for when the cuts will be announced? Government are required by law to provide 40 days’ notice to Parliament of any changes to the scheme and as a result ministers would have to delay cuts until Mid-July at the earliest or else risk legal conflict which could result in future dismay.

It is no secret that drops in the demand for solar PV installation has been of direct consequence of feed-in-tariff reductions however numerous trade bodies have confirmed that ‘solar PV remains one of the best investments around.’ It is thanks to the falling costs of the technology combined with the rising cost in energy bills, the existing rate of gaining 21p kWh is actually proves to be a better investment than if you were to have had the cells installed when the higher rate of 43.3p kWh existed.  A 4kWp system, the largest size for which the highest tariff is available, can be purchased today for under £9,000, whereas only one year ago it would have cost upwards of £15,000.  An average domestic system is around 2.5kWp and it is these positives that need to be held up so that we as an industry can begin to win back the all-important consumer confidence.

Whichever way you look at it, hopefully we can all agree that this delay, even if only for a short period, will benefit the installer as they will be able to provide this higher rate of 21p kWh to their customers for a touch longer. Hopefully a little rush to install PV before the new rate comes into effect will allow solar installers to enjoy a last minute flourish which is the least they deserve after solar has seen as 90% drop off in installations since the cuts came into effect in April 2012.

 

Categories: solar pv, feed-in-tariff

Solar PV: Rate of Return is Still Attractive

Posted by Chloe Bennett on 28th March 2012

Solar PV: Rate of return is still very attractive for consumers

Cuts to the feed-in-tariff have gained more than enough public exposure this year, and a vast majority of this has been quite detrimental to the industry and left a rather unpleasant taste in everyone’s mouth. However the combination of price drops in installation costs and equipment has actually created a similar financial return as before.

Research conducted by the UK’s only solar panel comparison site, CompareMySolar, suggests that installation prices have dropped by 50% since January 2011 and typical 4kWp systems that used to ‘cost £15,000 can now be bought for around £7,500.’ Price drops like these are mostly ‘driven by much lower module prices and increased competition.’

Returns improve to 2011 level

The impact of these price drops provide us with evidence that suggests that the financial return for consumers is currently at similar levels as it used to be in the first half of 2011. ‘The graph shown illustrates this for an example roof in Exeter (south facing, optimal angle, no shading), where a 4kWp solar panel system is expected to generate around 4,000 kWh in the first year. If we assume the property consumes half the electricity generated in house and exports the other half to the grid, the expected year one payback is:

•         (43p FiT) 4,000 x 0.43 = £1,720 from Government feed-in tariff

•         (21p FiT) 4,000 x 0.21 = £840 from Government feed-in tariff

•         2,000 x 0.15 = £300 from electricity savings

•         2,000 x 0.03 = £60 from the export tariff.

The total year one payback used to be £2,080 on the 43p feed-in tariff, and is currently around £1,200 at the 21p rate. While this looks like a very large drop in financial return, please keep in mind prices halved as well. Combining these payback amounts with prices paid for the installation (based on the monthly price index) provides the more relevant perspective. The below graph shows that where year one payback used to be around 14-16 percent of the initial price in the first half of 2011, it currently is back at 16 percent. Therefore, solar panels are currently just as attractive as around June 2011.’

Help raise consumer awareness

Research of this kind suggests that consumers will be able to receive a similar rate of return of their PV installation investment despite the cuts in the feed-in-tariff from 43p to 21p. This news should help to put solar back on the map for a lot of consumers that have previously written it off for being ‘too expensive’ or for those heavily impacted by the negative press of the FiT cuts.

It’s important that we can continue to work together to explore the positives and promote benefits over this type of news. Attractive return rates can help build more consumer awareness and bring back demand for solar pv technology which is much needed for solar installers looking to maintain and build their business during 2012.

Research and image source@solarpowerportal.co.uk

Categories: feed-in-tariff, solar pv

Breaking News: Supreme Court rejects government’s feed-in tariff solar appeal

Posted by Chloe Bennett on 23rd March 2012

BREAKING NEWS: The Supreme Court has today thrown out the government's appeal against a previous ruling that deemed its controversial changes to solar feed-in tariff (FIT) incentives as unlawful.

This ruling means that companies who installed panels between December 2011 and March 2012 will receive the high feed-in-tariff rate of 43.3p kWh instead of the 21p/kWh initially proposed by the government.

This long awaited decision finally closes the door on the drawn out saga generated by the government and highlights their ‘unlawful’ attempt to cut the feed-in-tariffs (FiT’s) at an unprecedented rate last year.

Even though the decision is one step forward for solar, fresh cuts are anticipated as the FiT’s will undoubtedly continue to exceed its budget this year allowing the government to bring out a second round of cuts to the incentive scheme.

"The extra money DECC will now have to commit leaves us with serious concerns about the remaining FIT budget, which remains constrained under the Levy Control Framework," said Paul Barwell, chief executive at the Solar Trade Association.

 

Categories: decc, government, solar pv, feed-in-tariff

Feed-in-Tariff Announcement News

Posted by Chloe Bennett on 15th February 2012

Engineers fit solar panels to a roof at Silvertown Solar Village, Docklands, London. Photograph: Alamy

Last week the Department of Energy and Climate Change (DECC) released ‘a written ministerial statement by Edward Davey on reforming the Feed-in-Tariffs scheme.’ These proposed changes to the Feed-in-Tariffs (FITs) were the first time Mr Davey was able to publicise his position within the DECC after Mr Chris Huhne resigned as energy secretary at the beginning of this month.

Below is a summary of the changes announced last week that will directly affect the solar feed-in-tariff rate and the way in which it operates.

Energy Performance Certificate (EPC) requirement to level D

The DECC have said that properties must now hold a level D EPC from April 1, 2012 to receive the full value of the FiTs. Currently until this date, there is no official requirement for an EPC prior to solar PV installation national grid connection.

For those who are unsure of what an EPC is, it’s the information on your home’s energy use and carbon dioxide emissions. The certificate itself gives you information on how to make your home more energy efficient.

DECC clarified that people who want to use solar PV towards obtaining an EPC rating of D would need to “have the solar panel system installed, conduct an EPC and then apply for the FiTs scheme. The EPC must be sent with the documentation relating to registration for FiTs.”

Tariff Rates

The tariff rates are exactly as DECC confirmed on January 19, as laid out below:

*The on-going FiT legal disagreement means that an assurance for this particular rate cannot be guaranteed. However it is worth noting that 43.3p kWh will be paid for all systems that were registered between December 12 2011 an April 1, 2012 due to the government loss of the recent appeal.

This tariff level is subject to change come July 2012 and the rate will depend of the level of capacity installed during March 2012 and April 2012. The new tariff options are outlined as below:

The outcome of the appeal, although lost, has allowed the government to take the appeal to the Supreme Court. This has bought them time and allowed further uncertainly to spread across the market. Should the case reach Supreme Court, it should formalise the tariff rate for those homeowners who had PV installations during the 12 December 2011 & 1 April 2012 period. Should the government win, and this is doubtful, the homeowner would receive a rate of 21p kWh for the rest of the guarantee period which currently stands at 25 years. Should the case be thrown out and the appeal lost, the homeowner will receive the higher rate of 43.3p kWh for the rest of the guarantee period.

Either way April 1, 2012 is certainly a date for the diary for anyone interested in the outcome but hopefully the result of the Supreme Court appeal should be announced before this date.

DECC's proposed mechanism for changing tariffs after July will include an automatic baseline transgression of 10% every six months, which can be triggered early if deployment exceeds pre-determined levels. The system will be reviewed annually to ensure that it is performing well against its objectives.

Announcing the new changes, climate change minister Greg Barker said:

"Our new plans will see almost two and a half times more installations than originally projected by 2015 which is good news for the sustainable growth of the industry. We are proposing a more predictable and transparent scheme as the costs of technologies fall, ensuring a long term, predictable rate of return that will closely track changes in prices and deployment."

Some of the other changes:

The reduced tariff rate of 21p kWh will remain in effect from 1st April 2012, for domestic sized solar panels with an eligibility date on or after 3rd March 2012. Other tariff changes will apply for larger installations.

From 1st April 2012, a new ‘multi-installation’ tariff will be set at 80% of the standard tariff. This will apply to existing installations where a single individual or organisation is already receiving FiT subsidies for other solar PV installations.

Due to the ‘unlawful’ cuts that were first ruled on the cuts in December 2011, the government have said these changes should bring "transparency, longevity and certainty,” we’ll see…

 

Categories: renewable energy, solar pv, feed-in-tariff

FIT Update: The Current Position

Posted by Chloe Bennett on 30th January 2012

On Wednesday 25th January 2012 the DECC lost their appeal against the tariff rates and have since announced their intention for further appeal. The court of appeal haven’t yet granted the DECC permission for further appeal but they are seeking direct permission from the Supreme Court in which to do so.

Should they be granted leave to appeal and become successful it could take up to a year before the final outcome is known. This appeal could also mean that they will be able to legislate to apply new tariff from the 12th December reference date.

Oh the uncertainty.

This uncertainty of not being able to guarantee either tariff rate (reduced rate at 21p kwh or last year’s higher rate of 43.3p kwh) on installations made between 12 December 2011 and 3rd March 2012, means that installers cannot correctly promote their services and homeowners are less confident about installing panels when they are less certain about the return of investment.

Delaying the outcome of the case could cause further damage to the industry due to the negative hype they’re continuing to create. The government are very keen not to give away 43.3p kwh as they simply cannot afford it so are trying their best to put off other buyers & installers off solar for selfish reasons until the next consultation on 3rd March 2012.

In an announcement by the DECC and in their formal response to question 1 of the consultation they have however confirmed that tariff rates will be no lower than 21p kwh from 1st April 2012 even if they government win their appeal.

Homeowners should be jumping at the chance to get involved as they may potentially be eligible to receive the higher rate of 43.3p kWh should the government lose their appeal. They have already lost twice so it might just be worth the gamble.

imagesource@solarpowerportal

Categories: decc, government, feed-in-tariff

Government loses right to appeal FIT tariff ruling

Posted by Christos Panayiotou on 25th January 2012

Towards the end of the year we blogged about how the government cuts to the feed in tariff had been ruled unlawful. At the time the government were not given leave to appeal but they then proceeded to do just that. However the Court of Appeal has today denied the Department of Energy and Climate Change (DECC) a hearing for its appeal against the High Court’s ruling back in 2011

So what does this mean?

There is still some confusion about what happens now. Essentially the feed-in tariff will increase back to 43.3p for system installed on or before March 3, 2012. It also means that for many people who had solar PV systems installed since the original proposed cut off date of December 12, and those who intend to install systems before the March 3 cut-off point, will receive the higher feed-in tariff rates for the full 25 years. Installations completed and registered on or after March 3 will qualify for the current higher rate until April 1, at which point the rates will drop to 21p. **(See update below)

The decision is likely to lead to another period of frantic activity and installations for many in the industry. The original announcement was made back in November and provided just over 1 month for installers to complete their installations. As a result more PV installation were completed in November than for previous months in 2011.

Many in the industry see this decision as a victory for common sense and justice:

Daniel Green, CEO of HomeSun, said: “Four judges, including three in the Court of Appeal, have now called the Government’s actions illegal. That’s a four-nil victory and a decisive ruling that Government may not make retrospective changes to the FiT because, as Lord Justice Moses concludes, to do so ‘would be to take away an existing entitlement without statutory authority.’”

“Both this appeal and the Judicial Review in The High Court would not have been required had DECC simply followed its own process and allowed the industry, that it claims to support, time to prepare for a lower feed-in tariff,” continued Green.

It is right that the government be held accountable for their actions and the way in which rash decision and actions impact on industry. However what the industry really needs now and in the future is stability. Hopefully the ruling will help towards this. Greg Barker said it best when he tweeted:

“Win, lose or draw today, important we move forward together, drive down costs + step up deployment.”

This is and will be the key aim for the industry moving forwards.

**UPDATE: 12.30pm: The government within the last hour has confirmed they intend to appeal this decision. As such this again throws uncertainty over whether or not PV installations will qualify for the higher tariff despite the fact it is highly unlikely the government will win this appeal.

 

Categories: decc, government, feed-in-tariff

Not Quite The Fairy Tale Ending; Solar Industry Waits on Governments Feed-In-Tariff Appeal Decision.

Posted by Chloe Bennett on 16th January 2012

Once upon a time, the 'greenest government yet ' launched an incentive scheme rewarding a homeowner with 43.3 kwph for every unit of electricity generated via solar energy. This new incentive was called the Feed-in-Tariff which promoted the production of green energy which could be fed back into the national grid. By contributing to the production of green energy, the government agreed to look after the homeowner’s investment by allowing the rate to be protected for up to 25 years.

However in December last year, the fairy tale hit the rocky middle part where the ogre (we’ll call him Greg Barker) rushed to cut the incentive scheme in half because his incentive pot of gold started to dry up. Instead of adapting some sensible planning with plenty of notice, Barker opted for a quick fix which jeopardised nearly 30,000 jobs.

The ‘quick fix’ was cutting the subsidy from 43.3 kwph to 21 kwph overnight and leaving solar PV installers and homeowners with less than 40 days’ notice. Needless to say this sent the industry into panic as homeowners wanted to secure the higher rate and there simply weren’t enough installers to do the jobs they were confronted with. Great news for the installer in the short term, but this opened up a pit of uncertainty as no one could rightly say what the industry would look like in the New Year.

Meanwhile, Environmental and Climate change company, Friends of the Earth started campaigning that the FIT cuts were ‘unlawful’ and won a high court case against the government. Since then, the government appealed the court ruling in early January and we’ve all been clinging to our seats since to hear how this story ends.

Well the ending has been err...delayed and it turns out the judge ruling on the governments appeal case, has postponed his decision which will undoubtedly create more uncertainty for the industry and its future.

How will it end?

Fingers crossed the government loses they’re appeal, the ogre will get a slap on the wrist and everyone can get the chance to get their pot of gold before the inevitable review date of 1st April. The sooner the appeal decision is announced, the sooner we can repair the holes the government has created in such a lucrative industry. It’s a shame it’s had to come to this, but the good guy always wins in the end don’t they?

Meanwhile: At least we've got support from our MP Henry Smith:

(Image above was in reply to email sent from company director Carl Bennett regarding FIT support.)

disneycastle - Imagesource@thecontaminated.com

Categories: feed-in-tariff, government

Solar PV Review Judicial Update

Posted by Chloe Bennett on 5th January 2012

The recent feed in tariff review, published in October 2011, announced expected yet sudden cuts due to commence in the early days of December 2011. The cuts that were announced saw the solar PV incentive halve from 43.3p p/kwh to 21p/kwh for installations carried out on and after the 12 December 2011.  This sudden cut was ruled unlawful by Mr Justice Mitting in the consualtion on 12th December 2011 and he set a deadline of 4th January 2012 for the Department of Energy and Climate Change (DECC) to seek permission to appeal. In the meantime the cut-off date of 12th December was pushed back to the 1st April 2012 so consumers could adopt the higher rate until this ruling was appealed.

Yesterday afternoon the government announced that they filed this request to appeal and outlined their grounds for appeal in a move to help speed up the legal process.

Should the government win this appeal, the rates will immediately drop back down to 21p/kwh and those consumers who were able to seek the 43.3p/kwh after the 12th December 211 cut-off date will have their incentives cut. This will not affect consumers who had PV installed before 12th December 2011 as their incentives will be protected by contract for up to 25 years.

If the government does not win this appeal then the 43.3p/kwh will remain until the parliamentary process has concluded which is actually expected to be 1st April 2012 or earlier.

Whilst most disagree with the way in which the government handled the cuts with special reference to the time period given to installers and the like to complete installations, it seems this brief relief period until (hopefully) 1st April 2012 will help to put consumer trust back into the industry and be some sort of compensation to consumer and installation companies who were and could have been harmed by the ‘unlawful’ cuts.

Either way it worth getting your PV installed asap as not only will incentive continue to drop as all do, but it may be worth seeking the 43.3p/kwh while you can. As for installers, be prepared for a busy few months as solar PV installation is still a very lucrative and modern money earner.

We have a range of solar PV courses available for those wishing to take advantage of the predicted demand.

 

Categories: solar pv, feed-in-tariff

Feed In Tariff Cuts Unlawful

Posted by Christos Panayiotou on 22nd December 2011

So last night the government’s decision to cut feed in Tariff’s on December the 12th was ruled unlawful by a high court judge. The judge also said that the government had been “incompetent” in the way it handled the cuts.

The result of this decision has seen many people in the industry celebrating that common sense and justice prevailed. Everyone in the industry agreed the tariff’s need to be cut to ensure longevity of the scheme and stability for years to come. However the timescales provided by the government to cut the tariff’s before it had completed its consultation period was the key issue. It was quite clearly rushed through and didn’t take into full account the impact on the industry, consumers and the cost of energy in the future.

So what happens now?

Despite the fact that the government was not given leave to appeal, they are applying for permission to do just that. This must be done by the 4th January. If it isn’t then the higher rate of 43.3p per kwh will apply until the end of the parliamentary process meaning thousands more homeowners will benefit from better returns probably until April 2012.

This means that many installers who have been working around the clock in the past few weeks will be doing so again in the New Year as another rush to complete numerous projects may ensue.

What is likely to happen in the future?

Whatever happens the tariff’s will need to come down to ensure they can be maintained long term. It is possible that the government will appeal and win, however we believe this is unlikely based on the rulings of the high court judge yesterday. We expect following a proper period of consultation the government will recognise the tariff supports not only a growing industry, but also much tax revenue. It should also recognise that many studies confirm that the main increase in the household energy bills is due to the rising cost of gas and In fact the better than expected uptake of solar PV will in reduce the cost of energy in the future.

So following proper consultation and review we expect that cuts will happen in April and further into the future but should be carried out in a more realistic and manageable way. If the review takes all of these factors into account then it is likely that the cuts will not be so deep and so quick. Whatever happens it is clear that solar PV is going to be here for some time to come and is clearly a very important part of the renewable energy market. Despite the original cuts in December many installers still found orders coming in for the New Year and demand remained above levels seen at the start of 2011 for many that we spoke to.

In the short term the real winners here are likely to be homeowners who have had installations booked in after the 12th December deadline many of which at a greatly reduced price. Not only will they have paid less but they are likely to receive the higher tariff.

 

Categories: government, feed-in-tariff

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