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

[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.