Here we go again- Feed in tariff cuts to come in weeks

[Somecamel]

Suprised no one else has picked up on this over the weekend but lets just say it ruined my Friday night.

DECC reportedly set to launch ?big reset? of solar subsidies ?within weeks? | Solar Power Portal

 

[Worcester]

We've been expecting that for a while. So no surprise for us, I reckon there will be a complete re-alignment of both the FiT and RHI schemes during October / November with details formally announced in January, so we won't really have clue whether there will be any support beyond April 2016 until then.

 

[Worcester]

FiT what FiT?
RHI What RHI?

Government departments slated for overspend and not managing budgets properly, with some of the cuts to departments slated at as high as 40% Draw up 40% cuts plans, George Osborne tells Whitehall departments - BBC News

FiT and RHI budgets are both overspent despite the degressiion measures, and on top of that DECC has to save £70m (http://www.bbc.co.uk/news/uk-politics-33013567 )

And some public perception that renewables are costing Joe public money, I see a massive ramp up in promotion of the Green Deal and Finance plans to replace FiT and RHI...

Thoughts please, or am I well wrong?

 

[Somecamel]

Just been watching Amber in one of the DECC Parliamentary meetings.

Storage is brought up at around the 11:42 minute mark. Rudd makes some interesting comments which may give a small hint as to where they are going with the FITS.

Parliamentlive.tv - Energy and Climate Change Committee

 

[Somecamel]

Might be an announcement tomorrow morning at 7am

Is the government planning to cut solar subsidies? | EAEM

 

[Worcester]

Listening to what she said, they aren't interested in Mr & Mrs Joe Bloggs (JB), they are interested in the BIG schemes, that give then an easy answer to their obligations.

However the challenges is that the small scale fit =<50kW and the Domestic RHI (i.e that managed by the MCS Scheme) have been excellent vehicles for educating and getting buy in at the individual level, which then translates to looking at energy efficiency in the work place..

Wind/Solar without subsidy = Large Scale deployment, not MicroGeneration (aka MCS)

11:33 I have had to reduce subsidies as already over spending on budget...

No comfort for the MCS market place in her words.. Vs Big Business / Bankers who will be very happy with her words so far..
11:49 she confirms that its big businesses with money that she's talking to..
@ 11:51 they talk about the alienation of Mr & Mrs Joe Blogs, remove the MCS opportunity for JB and you'll p**s off even more JB's ....

(11:23 - 11:52 Renewable Energy / Carbon Saving )

 

[Worcester]

Latest:
Amber Rudd lays out DECC's priorities for 2015 and beyond

Check the bit on Energy efficiency , sounds to me like more opportunities for the big boys. BG, Mark Group etc and a ramp up of Green Deal branded initiatives. NO mention of RHI or FiT...

 

[Leesparkykent]

Latest:
Amber Rudd lays out DECC's priorities for 2015 and beyond

Check the bit on Energy efficiency , sounds to me like more opportunities for the big boys. BG, Mark Group etc and a ramp up of Green Deal branded initiatives. NO mention of RHI or FiT...

mark group have just sold up to SunEdison.

http://www.solarpowerportal.co.uk/n...k_group_to_bolster_uk_solar_rooftop_push_3425

 

[Worcester]

12 months ago Mark Group were in the s**t with the cockup over the External wall insulation funding and about to go to the wall, since about October last year, they've been raking it in again based on ECO funding, and also back to their roots of loft and cavity wall insulation, all paid for in one way or the other by the Govt through cert and now eco. A big part of their client base is the Social Housing market place, so that will also be a big market for solar on new Social Housing projects.

A shrewd move, they probably picked it up for not a lot as MG lost a vast swathe of their good people in the middle of last year.

 

[Energetic]

DECC Press release:

https://www.gov.uk/government/news/controlling-the-cost-of-renewable-energy

 

[Somecamel]

So what from I can gather we have until at least September with no cut to the existing rate regardless of what banding sub 5mw.

It looks like new 'subsidy' system will come in from April 2016.

Anyone else gleamed any nugget's?

 

[TedM]

Following the early closure of the RO to >5MW PV this past March, the industry has reacted by developing <5MW solar farms. (NSS!)

DECC have now reacted to this by deciding to close the RO to all PV from April 2016 (with a 12 month grace period for projects already running as at 22 July 2015 - under similar terms to the grace period for >5MW solar).

It would make no sense in these circumstances to leave the FiT open to <5MW PV solar farms (stand alone systems) as all the developers would merely switch from joining the RO to FiTs, as they are currently entitled to.

So expect closure of FiTs to stand-alone PV from 1st April 2016 - or maybe a size cap; e.g. reducing the max PV under FiT to be dropped from 5MW to 1MW or something similar, with this to be consulted upon by DECC over the coming months.

 

[Worcester]

Thanks TedM, concise as always

Amber Rudd on BBC news just now (12:47), she made NO commitment to any PV FiT even for households beyond April 2016, "subsidies were always going to come to an end"

 

[Somecamel]

Hi Ted,

How do you see this affecting the smaller sub 4kw domestic market?

I'm sure I read something somewhere that said Rudd can reduce the FITS for Solar PV by 29% without any need to go to consultation but maybe I'm wrong.

In the absence of any more announcements today about any potential FIT changes can we safe to assume we have until at least the 2nd September at the current rate?

I would imagine with a tariff cut due at the end of September anyway, they might do something then with it.

 

[TedM]

Yes, I would think so - current rates until 30th September. Hopefully DECC learnt from the changes to FiTs they tried last time that they need to follow the due process and give reasonable warning of future changes.

I can forsee that FiTs support will shrink in line with current tariff bands; e.g. anything currently over 10p will be degressed and retained, anything currently below 10p will go.

So new tariffs would be:

< 4kW - 10p
4 - 10 kW - 8.5p
10 - 50 kW - 8.5p
> 50kW - nil
stand alone - nil

Whether this will happen from October or next April is anyone's guess, but there probably isn't quite enough time to run a consultation to meet the October deadline unless DECC announce their intentions within a few days.

The tariffs that are to apply from 1st October have to be announced before the end of this month.

 

[njcuk]

Yes, I would think so - current rates until 30th September. Hopefully DECC learnt from the changes to FiTs they tried last time that they need to follow the due process and give reasonable warning of future changes.

I can forsee that FiTs support will shrink in line with current tariff bands; e.g. anything currently over 10p will be degressed and retained, anything currently below 10p will go.

So new tariffs would be:

< 4kW - 10p
4 - 10 kW - 8.5p
10 - 50 kW - 8.5p
> 50kW - nil
stand alone - nil

Whether this will happen from October or next April is anyone's guess, but there probably isn't quite enough time to run a consultation to meet the October deadline unless DECC announce their intentions within a few days.

The tariffs that are to apply from 1st October have to be announced before the end of this month.

What I simply can't understand is the gaping hole of 50kW-250kW medium scale commercial industrial. However, I am not surprised by anything in relation to renewable energy and its administration. The biggest farce is that they have not learned from other countries failure to deploy successful fit based schemes.

Ted, where is the information that the sub 50kW market will continue or is it your understanding? Thanks for the info.

Doing basic maths on a 100kW install, who is going to invest in something with a 10 year+ payback (and that is the best case scenario for a high energy user). I certainly would invest elsewhere. Unless, product prices drop massively, the no subsidy option just is not an option at present. Leaves the industry open to cowboys and poor equipment again.

 

[njcuk]

Also, could somebody explain to me 'Grandfathering'? Does this mean that you will not be guaranteed the FIT rate for 20 years index linked? Or will installs up until 1st April next year still get 20 years at a set rate?


Thanks

 

[TedM]

Those figures are just my guesswork, nothing announced for FiT yet other than the consultation on the removal of pre-accreditation and pre-registration.

RO "grandfathering" just means a guarantee that the rate that is in force when an installation is accredited will not be affected by future changes. The consultation proposes to remove that guarantee from today. This only applies to RO not to FiTs.

 

[Worcester]

Hi TedM, they refer to changing FiT in here : https://www.gov.uk/government/consultations/changes-to-financial-support-for-solar-pv

They say that they will consult on it later this year (expect that to be in a month or so ! )

14. Solar PV up to 5MW is also able to deploy under the FIT scheme. The FIT scheme is currently under review. The Government is consulting on a proposal to remove pre-accreditation from the scheme, and later in the summer will be consulting on further cost-control measures relating to the FIT scheme.

 

[TedM]

Yes, I meant they have not issued the consultation yet not that they have not pre-announced it! It's certain that the FiT will be changing but no more detail than that.