Worcester Renewables Ltd

t:01386-871490 e:info@WorcesterRenewables.com

Tag: Fast Track

Turmoil over Feed in Tariff Rates Cuts for 2012

Businesses considering installing Solar PV are all rushing to install before March 2012, though for some even that may be too late.

At a meeting at the House of Commons today between industry representatives, the Government reiterated its position on the Comprehensive Feed in Tariff review.

Rachel Solomon-Williams, Head of the Feed-in Tariff Review confirmed today that the Comprehensive Review is underway in the Department of Energy and Climate Change (DECC), although she was unable to confirm details of when it would be revealed, or what the rates will look like.

It was however established that DECC has to operate within the Treasury-imposed, fixed envelope. It was made clear that if this budget overruns, the funding will need to come from DECC, for which, unfortunately, there is no budget.

She also reiterated that there are no planned changes before April 1, 2012 “unless earlier action is deemed necessary,”

And it is the fact that the Government consistently keep repeating that phrase at ever more frequent intervals that is causing major unease with potential customers.

After all, many still remember that phrase from the recent fast-track review, which ended in tariff rates as low as 8.5p for large scale projects, the concern is that all project over 10kWp could now also be affected and the rate drop  to a similar level.

Whilst the Government wouldn’t be pushed further, the chatter in the room and the corridors afterwards was that the most likely outcome was a 10% cut on the first band up to 4kWp, possibly the same up to 10kWp, a heavier reduction (and a new band) between 10kWp and 20kWp and a swingeing reduction for the 20kWp to 50Kwp sized systems. The chatter also suggested that the upper end of the cuts may be introduced as early as January 2012, in the same way that the Fast Track review effectively killed off all the projects over 50kWp, a rapid implementation of a >20kWp band would effectively kill off nearly all the commercial schemes currently under consideration, meaning that the only place left to install Solar PV was homes and small businesses.

Hence the rush to get systems installed before the end of this year.

Watch this space..

The Strategic Review of FITS – how quickly could it come into effect – 7th January 2012?

Content:

FITS Review
Fast Track Review
Modification to Extension of Plants

Based on extracts from DECC website:

FITs Review

On 7 February 2011, the Government announced the start of the first comprehensive review of the Feed-in tariffs (FITs) scheme for small-scale low-carbon electricity generation.

A principal objective of the review is determining how the efficiency of FITs will be improved to deliver  £40million of savings, around 10%, in 2014/15 as committed to in the 2010 Spending Review [External link]. This commitment reflects the need for a responsible approach to public subsidies like FITs, to ensure value for money for consumers. 

HM Treasury recently published a control framework for DECC levy-funded spending [External link] which includes the FITs Scheme. 

….

Comprehensive review

The comprehensive review is considering all aspects of the scheme including:

  • Tariff levels 
  • Degression rates and methods 
  • Eligible technologies 
  • Arrangements for exports 
  • Administrative and regulatory arrangements 
  • Interaction with other policies 
  • Accreditation and certification issues

We will consult on the comprehensive review later this year. The review will be completed by around the end of 2011, with tariffs remaining unchanged until April 2012 (unless the review indicates the need for greater urgency). 


Since then there has been very little from DECC or the ministers involved at all, apart from of course the fast track review that they conducted in March – June which effectively killed off all solar projects > 50kWp.

The only other information available officially from deck is the announcement of the above review, and the accompanying written statement, I’ve reproduced them in full below, you can see the originals here:

Huhne takes action on Solar farm threat (Press Release)

Feed-in Tariffs: Written Ministerial Statement by Chris Huhne


Huhne takes action on Solar farm threat

Press release: 11/010
7 February 2011

  • Comprehensive review of Feed-in Tariffs starts now to provide investment certainty.
  • Fast-track consideration to be launched into large-scale solar installations and farm-scale anaerobic digestion plants.

Energy Secretary Chris Huhne has today launched a comprehensive review of the Feed-in Tariffs (FITs) scheme following growing evidence that large scale solar farms could soak up money intended to help homes, communities and small businesses generate their own electricity.

Since FITs began last year it has been a huge success at stimulating green growth, driving innovation, creating jobs and cutting carbon.

More than 21,000 installations have been registered to date. The vast majority of these are domestic installations, including solar panels, wind turbines and microhydro plants.

Last year’s Spending Review committed government to save 10% of the costs of FITs in 2014-15 through a review due to start in 2012 or earlier if uptake exceeded Government expectations. Because of the risk of an increasing number of large scale solar farms which could push FITs costs off track, and the need to give industry added certainty to invest, the coalition is today announcing a comprehensive review into the scheme. We also hope to publish next month measures to support renewable heat within the budget agreed at Spending Review.

Chris Huhne said:

“The renewables industry is a vital piece in the green growth jigsaw and this review will provide long term certainty while making sure homes, communities and small firms are encouraged to produce their own green electricity.

“Large scale solar installations weren’t anticipated under the FITs scheme we inherited and I’m concerned this could mean that money meant for people who want to produce their own green electricity has the potential to be directed towards large scale commercial solar projects.”

The comprehensive FITs review will:

  • assess all aspects of the scheme including tariff levels, administration and eligibility of technologies
  • be completed by the end of the year, with tariffs remaining unchanged until April 2012 (unless the review reveals a need for greater urgency)
  • fast track consideration of large scale solar projects (over 50kW) with a view to making any resulting changes to tariffs as soon as practical, subject to consultation and Parliamentary scrutiny as required by the Energy Act 2008.

Alongside the fast track review of large scale solar PV, a short study in to the uptake of FITs for farm based Anaerobic Digestion (AD) plants will also take place. Only two such projects have been accredited so far and by this point at least six were expected. The tariff rates will be examined to see if they are enough to make farm based AD worthwhile.

The Government will not act retrospectively and any changes to generation tariffs implemented as a result of the review will only affect new entrants into the FITs scheme. Installations which are already accredited for FITs at the time will not be affected.


Notes for editors
  1. Broad terms of reference for the review are available from the First review of Feed-in Tariffs (FiTs) web page.
  2. According to Ofgem, the total installations to date (to 26 January 2011) under the FITs scheme are as follows:
  • Anaerobic digestion – 2
  • Hydro – 178
  • Micro CHP – 36
  • PV – 19854
  • Wind – 1132

The total installations have a combined capacity of 76.66MW.


Feed-in Tariffs: Written Ministerial Statement by Chris Huhne

7 February 2011

I am today announcing the start of the first review of the Feed in Tariffs (FITs) scheme for small scale low carbon electricity generation.

Decentralised renewables are vital to green growth and the FITs scheme has proved highly successful at stimulating growth, driving innovation, creating jobs and cutting carbon.

Since the scheme began last year more than 21,000 installations have registered to date. The vast majority of these are domestic installations, including solar panels, wind turbines and micro hydro installations. The scheme is working well. The take-up of solar photovoltaic (PV) panels under FITs has been a success with 20,000 installations now registered. However, there is room for improvement. I am concerned about the impact of super-size solar installations. I am also disappointed at the lack of farm based Anaerobic Digestion plants currently accessing FITs.

In light of the economic and fiscal situation, inherited by the Coalition, it is imperative that we take a more responsible and efficient approach to public subsidy, including where this subsidy is funded through energy bills. Specifically the Spending Review committed to improving the efficiency of FITs and finding £40million of savings, around 10%, in 2014/15.

Since the Spending Review, I have become increasingly concerned about the prospect of large scale solar PV projects under FITs, which was not fully anticipated in the original scheme and could, if left unchecked, take a disproportionate amount of available funding or even break the cap on total funding. Several large solar installations have already received planning permission. Industry projections indicate there could be many more in the planning system. In light of this uncertainty and the risk that such schemes could push FITs uptake off trajectory and may make the Spending Review savings difficult, I have decided to end the potential for damaging speculation and bring forward the review of the Scheme to look at ways of correcting these early teething problems.

I recognise that industry needs a long term plan for investment in which it can have full confidence. Today I am announcing a comprehensive evidence based review in to the FITs scheme and, to provide further certainty to the renewables industry, I can confirm that we also hope to publish next month measures to support renewable heat within the envelope agreed at Spending Review.

The FITs review will:

  • Assess all aspects of the scheme including tariff levels, administration and eligibility of technologies
  • Be completed by the end of the year, with tariffs remaining unchanged until April 2012 (unless the review reveals a need for greater urgency)
  • Fast-track consideration of large scale solar projects (over 50kW) with a view to making any resulting changes to tariffs as soon as practical, subject to consultation and Parliamentary scrutiny as required by the Energy Act 2008.

Alongside the fast track review of large scale solar PV, we will also undertake a short study into the take-up of FITs for farm based Anaerobic Digestion plants. Only two such projects have been accredited so far and by this point at least six were expected. We are looking again at the tariff rates inherited from the previous administration to see if they are enough to make farm based Anaerobic Digestion worthwhile.

Broad terms of reference for the review are available from the First review of Feed-in Tariffs web page and we are seeking views on specific issues to be considered. The Government will not act retrospectively and any changes to generation tariffs implemented as a result of the review will only affect new entrants into the FITs scheme. Installations which are already accredited for FITs at the time will not be affected.

 


Here’s what they did before:

Fast track review 

As part of the comprehensive review, we have given fast-track consideration to the tariffs for large-scale (over 50 kilowatts) and stand alone solar photovoltaic (PV) projects and farm-scale anaerobic digestion (AD) projects (up to and including 500 kilowatts). A consultation on the fast-track review was held over the period 18 March to 6 May 2011.

The outcome of this consultation was announced on 9 June 2011. This confirmed that, having carefully considered the responses received, the Coalition Government has decided to proceed with the proposed tariff reductions for large scale solar PV (over 50 kilowatts) and all stand-alone PV projects, and increases for farm-scale AD projects (up to and including 500 kilowatts). The detail of this decision and the analysis underpinning it are set out in Feed-in tariffs scheme: Summary of responses to the Fast Track Consultation and Government Response.

The new tariffs for large scale (over 50 kilowatts) and stand alone solar PV came into force on 1 August 2011. These new tariffs were introduced through:

Modifications to the Standard Conditions of Electricity Supply Licences

Timeline:

Announce – Publication = 39 days
Consult = 49 days
Prepare = 34 days
Before Parliament = 53 days

TOTAL: 175 days

Treatment of Extensions Change to Fits

Since announcing the outcome of the fast-track review, we became increasingly aware of evidence that some large-scale solar PV developers were intending to use provisions in the FITs legislation on the accreditation of extensions to installations, to take advantage of the current tariffs beyond 1 August 2011. This was not the intended effect of the extension rules and was clearly inconsistent with the objective of the fast-track review.

Therefore, a consultation on the treatment of extensions was held over the period 27 July to 31 August 2011. The outcome of this consultation was announced on 27 September 2011 and confirmed the decision to amend the rules on extensions. These amendments are being made through the Feed-in Tariffs (Specified Maximum Capacity and Functions) (Amendment No.3) Order 2011. This was laid in Parliament on 27 September 2011 and will come into force on 18 October 2011.

Timeline:

Consult = 35 days
Prepare = 27 days
Before Parliament = 21 days

TOTAL:  83 days

 


POSSIBLE TIMELINE:

Based on their previous track record, they will have already decided what they are doing and the ‘consultation exercise’ will be purely to go through the motions.

Consultation period: 40 days

At the end of that period it will be laid straight into parliament.

Before Parliament: 40 days

So if the Strategic review is published on the 19th October and they allow 40 days for consultation and 40 days before parliament that gives until the 7th January.

The new FiT, prices and the future for solar in the UK: Part 1

Article reprinted from  Blogs by Guest Blogger Published on 06 October 2011 Updated on 06 October 2011

Original article here: http://www.solarpowerportal.co.uk/blogs/the_new_fit_prices_and_the_future_for_solar_in_the_uk_part_1_5478/

The new FiT, prices and the future for solar in the UK: Part 1

Solar Media’s Founder and CEO David Owen talks us through exactly where the UK solar industry is headed as we build up to the Comprehensive Review.

By David Owen, Founder and CEO of Solar Media Ltd.

It’s almost one year since the Comprehensive Spending Review (CSR) and rumours are beginning to fly around the UK solar industry as to what the upcoming Comprehensive Consultation on the feed-in tariff (FiT) holds. I decided it was time to investigate what people are actually saying, and to find out how much of what is being said matches the facts around budgets, pricing and deployment.

If I had £1 for every time I have been asked, “what will the new FiT look like?” in the past three months, then I would have, according to my calculations, £589. I am writing this blog in the hope that people will read it and reduce the wear and tear on my phone.

I do understand however, that we are at a seminal point in the PV industry’s development where drastic changes to the FiT could irrevocably harm the positive growth we have seen since April 2010.

Current size of the market

Let’s take stock. Ofgem’s register tells us that in this current FiT year there have been 197MW of PV installed to date. Still to be added are more than 75MW of large-scale projects already connected to the grid, which are outlined in Emma’s great piece on just how many solar projects beat the fast track review, while an estimated further 15MW in projects were extended under the FiT loophole.

Most in the industry assume that Ofgem is three months behind in logging registrations, but let’s forget that for the time being and focus on the numbers we know. By adding the latest installation figures with the confirmed large-scale projects, deployments in this current FiT year amount to around 287MW.

We can also add to this figure a number of large-scale social housing projects with as many as 5,000 homes at a time that have recently started deployment. This is likely to raise the run rate for domestic installs considerably and, as we are half way through the FiT year already, it looks likely that we will exceed 550MW by year end 31 March 2012.

Remember this is just PV installs, the other technologies, particularly AD are just starting to ramp.

So, what happens next?

Last year’s CSR imposed a budget cap on the FiT scheme (rightly or wrongly it is there) and if the 550MW projection is correct than that budget will be under severe pressure. Slides I have seen with the DECC original modelling of FiT deployments for PV was much lower at 86MW of new PV to be connected this year (see chart below).

The Renewable Energy Association (REA) had their own models (Feb 2011) which were provided to DECC before the Fast Track Feed-in Tariff Review when they called for a reduction to all tariff bands including the under 50kW sector. These estimations appear to be quite accurate given the current state of play, but were unfortunately ignored by those in power (see graph below).

Effect on the FiT

Looking at the cold hard facts, it is clear that something has got to give. The budget will not sustain another year of growth this strong. The DECC were planning to come out with their initial consultation on the Comprehensive Review of the FiT in September, that hasn’t happened. It seems that DECC have finally realised the magnitude of the potential budget overspend (little to do with large-scale PV it should be noted) and have rightly delayed the consultation as they asses their options and get their facts straight.

It is anticipated that the Comprehensive Review will now come out some time around or before October 19th, incidentally the week before the largest industry gathering at Solar Power UK in Birmingham. This late timing will at least allow the industry to digest the announcement in full and come together to assess the future.

Based on what I have heard, coupled with the deployment and budget conditions mentioned above, we should see at least a 30 to 50% decrease in the domestic feed-in tariff. Many companies are looking at their own costs and margins against the DECC target of 7 – 9% return for consumers and are coming up with figures much lower, at around the 15% mark.

What you should do

If you are basing your business plan on digression that low then my advice is re-assess now!

The good news is that owing to weak demand in global PV markets the price for solar components, especially modules, has dropped dramatically in the past six months. But with positive signs starting to emerge from Germany these prices will begin to plateau by the end of this calendar year.

If you are planning your installation or distribution business in the UK right now than you cannot afford to miss the upcoming Solar Power UK Conference in Birmingham from the 26th to the 28th of October. Get out of work for one or two days and ensure that you are aware of and prepared for drastic cuts in the tariff. Don’t leave your blinkers on and assume everything will continue at the current unsustainable pace. Industry experts and the biggest selection of component suppliers will be out in force to help you reduce the costs to your business for customer acquisition, product sourcing and quality to ensure you can stay competitive under a new FiT regime.

Interestingly, the conference is exploring the idea of a PV industry without a FiT in the UK and it could come sooner than you might think.

In Part 2 of this blog I will look at the prices you should be paying for your products now, how to get a better deal and how to prepare for the pending changes to the FiT.

David Owen is the Founder and CEO of Solar Media Ltd – the largest global business-to-business media company dedicated to the solar PV industry. With a combined online audience approaching 230,000 per month, in English and Chinese, Solar Media Ltd is at the forefront of independent coverage of the PV industry. In the UK David has spoken at many events, consults for companies throughout the supply chain and has been active on the REA and STA steering committees for a number of years.

Reprinted from: http://www.solarpowerportal.co.uk/blogs/the_new_fit_prices_and_the_future_for_solar_in_the_uk_part_1_5478/

Solar firms file for judicial review against feed-in tariff cuts!

Group of solar developers launch legal action, alleging government has trampled over its own processes with feed-in tariff review…

A group of 11 solar firms filed a claim in the High Court late yesterday, seeking a judicial review against energy and climate change secretary Chris Huhne and his decision to launch a fast-track review of the feed-in tariff incentives available for larger solar installations.

The legal action has been widely anticipated ever since the government shocked the industry by launching the surprise review on 7 February. It accuses the Department of Energy and Climate Change (DECC) of reneging on previous commitments to not cut feed-in tariffs until 2012, and failing to adhere to its previously stated processes for reviewing the incentives.

Speaking on behalf of the group filing the claim, Mark Shorrock, chief executive of Low Carbon Solar UK, said that the companies felt that a judicial reviews was the "only course of action left" after raising their concerns over the proposed cuts with the government.

"We hope the secretary of state of energy and climate change will abandon this fast-track review and work with us to find a more appropriate solution for the future of the feed-in tariff," he said in a statement. "In pulling back on a commitment to support solar energy, the government will cause the abandonment of hundreds of community-scale schemes. The cost of not getting this right, aside from the government meeting its climate change targets, include the creation of new jobs, a diversified income for farmers and landowners, reduced energy costs for businesses, and the provision of more secure and reliable energy for the UK. "

Speaking to BusinessGreen, a spokeswoman for the group said the companies were seeking an expedited judicial review that could be completed before the end of the government’s consultation on its proposed cuts to feed-in tariffs, which is scheduled to end next month.

The legal challenge has been launched by Alectron Investments Ltd, Element Power Ltd, Juwi Renewable Energies Ltd, Lark Energy Limited, Low Carbon Solar UK Ltd, MO3 Power Ltd, Donald Anderson, Guy Anderson, Kate Kenyon and The Green Company (Europe) Ltd.

However, the case will be watched closely by the wider solar industry. Many companies have warned that the proposed cuts to feed-in tariffs of between 40 and 70 per cent would make virtually all installations with more than 50kW of capacity financially unviable.

The application for a judicial review centres on a series of legal arguments relating to the government’s handling of the fast-track review.

It notes that previous indications from DECC suggested that the first review of the feed-in tariff scheme would not take place until 2012, and no changes would be implemented until April 2013.

It also claims that, while DECC indicated in November 2011 that an earlier review might take place, this was originally intended to be carried out over a 12-month period with any changes to tariffs implemented from 2012. The government is now planning to impose any cuts to feed-in tariffs from the start of August.

The application points out that the government failed to announce a "trigger point", despite ministerial assertions that an early review would only take place once that pre-announced "trigger point" was reached.

Finally, it accuses the government of failing to provide adequate evidence that the UK is facing an "excessive deployment" of large-scale solar projects that will undermine the effectiveness of the feed-in tariff scheme. It argues that it is "irrational " for the government to cut incentives for cost-effective solar farms and larger installations when the UK has to meet legally binding renewable energy targets.

DECC was unavailable to comment at the time of going to press.

However, the government has consistently argued that cuts to feed-in tariffs are required to stop large solar farms eating into the funds available for domestic rooftop installations. As such, DECC is expected to contest any judicial review.

by James Murray ‘Business Green’, 19th of April 2011 , See his original post here: http://www.businessgreen.com/bg/news/2044601/solar-firms-file-judicial-review-feed-tariff-cuts

Feed-in Tariffs Review launched–Here’s how you can comment

Feed-in Tariffs: Written Ministerial Statement by Gregory Barker, Minister of State

18 MARCH 2011

I am today announcing a consultation as part of the fast-track review of Feed-in Tariffs (FITs) for small scale low carbon electricity generation.

On 7 February, I announced the start of the first comprehensive review of the FITs scheme for small scale low carbon electricity generation which would:

  • assess all aspects of the scheme including tariff levels, administration and eligibility of technologies;
  • be completed by the end of the year, with tariffs remaining unchanged until April 2012 (unless the review reveals a need for greater urgency);
  • fast-track consideration of large scale solar projects (over 50kW) with a view to making any resulting changes to tariffs as soon as practical, subject to consultation and Parliamentary scrutiny as required by the Energy Act 2008; and
  • alongside the fast track review of large scale solar PV, undertake a short study into the take-up of FITs for farm based Anaerobic Digestion plants.

The document published today deals with the last two of these points, and seeks views on proposals to changes tariffs for solar photovoltaic (PV) installations larger that 50 kilowatts and farm scale anaerobic digestion (AD) of up to 500 kilowatts. The proposed new bands and tariffs are as follows:

For large PV installations:

  • >50kW – ≤150kW: 19p/kWh
  • >150kW – ≤250kW: 15p/kWh
  • >250kW – ≤5MW: 8.5p/kWh

And for farm scale AD installations:

  • ≤250kW:   14p/kWh
  • >250 – ≤500kW: 13p/kWh

The FITs scheme has been a success since its launch in April 2010 with over 27,000 FITs installations registered to date, of which 92% are domestic-scale solar PV generators, which are not affected by the proposed changes in the fast track review. The FITs scheme rewards generators for the green electricity they produce, use and sell back to the grid. We want to protect the diversity of the FITs scheme, and ensure that it benefits homes, small businesses and communities, and the full range of innovative technologies.

In these financially challenging times, it is even more important that we get the balance of the scheme right. The projections for take up of FITs published by the previous government failed to anticipate any large or small scale non-domestic solar PV installations until 2013. These projections have clearly proved to be flawed. Current market indications are that a rapid increase in the number of larger solar installations entering the scheme could distort funding for smaller and domestic scale installations as well as other technologies. Conversely the current tariff levels have failed to spur a meaningful uptake for anaerobic digestion which means that this technology is not fulfilling its potential contribution to our energy mix.

Decentralised renewables are a vital part of green growth and the FITs scheme has proved highly successful at stimulating growth, driving innovation, creating jobs and cutting carbon. We must act now to ensure that the scheme continues to deliver and we are able to achieve both our Spending Review commitment to improving the efficiency of the scheme, which will deliver £40million of savings (around 10%) in 2014/15, as well as ensuring that the benefits of a faster fall in technology costs are shared as widely as possible rather than captured in higher returns for a small number of individual investors.

We are seeking views on proposed tariffs until 6 May 2011. The Government will not act retrospectively and any changes to generation tariffs implemented as a result of the review will only affect new entrants into the FITs scheme. Installations which are already accredited for FITs at the time will not be affected. We propose that these changes take effect from 1 August 2011, subject to the outcome of this consultation and Parliamentary scrutiny.

We are also seeking views on the scope of the comprehensive review by 12 April 2011.

The consultation document can be accessed on the FITs Consultation page of the DECC website