The latest on the feed-in tariffs
With on-going consultations and reviews on the Feed-in Tariffs, the current situation is now quite complex. We thought it would be useful to summarise the latest position so that you know where you stand vis-à-vis potential community renewable projects.
The Government published three documents on Thursday 9th February 2012:
- The Government Response to the Consultation on the Phase 1 Review of Solar PV FiT
- The Consultation on the Phase 2 Review of the Solar PV FiT
- The Consultation on the Phase 2 Review of the Non-PV Technologies
The first thing to note is that the deadlines for responding to the two new consultation documents are different:
3rd April for the Solar PV one and
26th April for the non-PV one
The Low Carbon Hub will be drafting responses to both of these consultations and circulating them for comments before we submit. Please post any feedback in the comments box below and email email@example.com if you would like to be put on the circulation list to comment on the drafts of the Hub’s response.
outcomes from phase 1 consultation on solar pv
A summary of the outcomes of the Phase 1 consultation is:
- If you manage to install solar PV by 3rd March, you might still get the higher FiT rate if the Government loses its appeal at the Supreme Court to overturn the ruling that the cuts to the Feed-in Tariff for solar PV were unlawful. This means that you would still get 43.3p/kWh for a domestic-size installation.
- If you install solar PV by 31st March, you will get the lower rate of 21.0p/kWh but you won’t need to have an Energy Performance Certificate (see point 4 below).
- You can own up to 25 installations of any size before the lower rate for “aggregation” kicks in.
- If you install solar PV by 1st July, you will get the lower rate of 21.0p/kWh and you will need to have an Energy Performance Certificate (EPC) showing that your building is at, or above, band D in order to qualify for the Feed-in Tariff.
This outcome was not all bad, although it is going to be interesting to see how the EPC requirement actually works in practice. I still think community projects, particularly on community halls and churches, should be exempt from this requirement. We are asking for clarification on whether the requirement applies to churches or not. The drafting is not clear and the European Buildings Performance Directive suggests that churches are exempt because it is so difficult and expensive to make them energy efficient.
proposals for phase 2 consultation for solar pv
A summary of the main proposals in the Phase 2 consultation on solar PV is:
- The Government wants to move away from basing the Feed-in Tariff on rates of return to a system where the price is set according to the amount of PVs installed across the UK.
- This means that the proposed tariff rates from 1st July will be set according to how much PV is installed between 3rd March and the end of April. Whatever happens, the rates will reduce by at least 22% or at most 35%.
- The tariff will reduce by 10% every 6 months irrespective of how much PV is installed, so it would be reduced to zero within 5 years – which presumably means that this is when the Government expects PV to achieve grid parity (ie.. where the cost of generating the energy from a technology is no higher than the current average).The reduction would be triggered earlier if rates of installation exceeded a set amount.
- To pay the Feed-in Tariff on solar PV installations for 20 years rather than 25.
proposals for phase 2 consultation for other technologies
A summary of the main proposals in the Phase 2 consultation on the rest of the Feed-in Tariff Scheme is:
- Microhydro and anaerobic digestion tariff rates are proposed to stay broadly stable.
- Rates for small wind are significantly cut (see consultation document) because both capital and maintenance costs are lower than expected. Medium and larger projects have small cuts or remain stable.
- The micro-CHP tariff has gone up (see consultation document).
Chapter 4 is about whether there should be special consideration for community-owned installations in the Feed-in Tariff. It covers the definition of community and proposes two possible benefits.
- The ability for communities to keep a higher rate of FiTs for multiple project
- The possibility for communities to be able to “fix” the FiT tariff at a particular point in the development of a project.
Clearly the last point is very important to the work we are all doing and we will be gathering views to help us draft a response to the consultation.