In response to the FiT review

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Post author

Dr Barbara Hammond

You may all be reeling from the recent Government announcement that proposes a 50% plus reduction in the Feed-in Tariff for solar PV. Introduced in April 2010, the aim of the tariff was to make “low carbon electricity generation attractive for householders, businesses, and communities who have not traditionally engaged in the electricity market”. This current proposal is for a 54–59% reduction, and a further 20% for owners with multiple sites. The Energy Saving Trust has produced a factsheet on the proposed changes with a calculator to work out how much you can generate and earn after the reductions.

So, as a community, you might be thinking why bother? Well, the first thing to say is that it is meant to be a consultation and we think that it is still worth fighting to make the whole thing workable for communities. On this basis, we have put together a draft response to the Government’s consultation document. Please feel free to use the Hub’s response as the basis for your own and send it to DECC’s consultation hub or alternatively you can email your responses to fits@decc.gsi.gov.uk.  Please use the template provided to record your response, which can be found at the consultation webpage alongside the other consultation documents. You can send hard copies to: Feed-in Tariffs Team, Office for Renewable Energy Deployment, Department of Energy and Climate Change, 4th Floor, Area A, 3–8 Whitehall Place, London SW1A 2AW. The Low Carbon Communities Network are also producing a short paper on the FiT consultation for discussion. All responses have to be in by 23 December 2011. Greg Barker has tweeted that he thinks a community tariff is a good idea, so make sure you have your say.

We have taken a round of comments on the first draft of the Hub’s response to the FiT consultation already, and look forward to receiving more through the comments box below. Although all are agreed about the importance of supporting community-scale renewable energy projects, there have been a couple of questions about our dislike of the big domestic ‘”rent-a-roof” installers. One in particular pointed out that these schemes at least allow people who cannot afford to own the equipment to get the electricity saving. We would very much welcome further views from you on this point before we finalise our submission. West Oxford Community Renewable’s (WOCoRe) response to the very first FiT consultation noted how open to abuse the “right to assign” clause could be and recommended an accreditation scheme for aggregators as an extra category of the MCS alongside products and installers. I think the recent Which? report bears out WOCoRe’s concerns and it would be good to follow up on the point in this consultation response.

Just to note, this is the first phase of the consultation, which is solely focused on solar PV. Phase 2 will look at the wider issues and tariffs for non-solar renewable technologies, new cost control mechanisms, and administrative aspects of the schemes. This will be published at the end of the year.

The FiT review has had a knock-on effect for us as an organisation too. The core of our business  – to enable communities in Oxfordshire to invest together to install renewables – has been hit hard. We have had to spend a good few days thinking about, and revising, our business plan to make sure the figures still work at the new rates. The good news is that they do but the margins are a lot, lot tighter.

Our current plan works if –
a) we are exempt from the multiple site reduction tariff;

b) we operate at the scale planned to reduce equipment costs;

c) we share administration costs across a number of schemes; and,

d) that investments in the Hub will be eligible for the Enterprise Investment Scheme tax relief. At least we now have confirmation of this from HMRC.

So, our view is take a deep breath and keep going. The beauty of community renewable projects is their scale – small enough to be within reach but large enough to make a real difference. We still feel it is a really important thing to do and gives one of the deepest feelings of satisfaction available in life (apart from having children and eating chocolate!). If you have any queries and comments, get back to us via the comments box below.

Barbara Hammond

2 comments

  1. David Calver said:
    2 December, 2011

    re hub response to FIT consultation. part of the solution to the financing barrier might be “Securitisation”, ie combining asset-backed revenue streams (eg FIT payments) across multiple community companies, as security for the borrowing, therefore enabling GIB (or others) to lend at lower interest rates, thereby making more such schemes financially viable.

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