With the drop in the supply price of solar panels, the cost of installations, a LOT more sun (than England) and the much higher electricity prices now means that an economic investment can be made in Solar PV without the need for Feed-in-Tariff or Renewable Energy Obligation support . Of course that is at the industrial scale! – In just one province – Murcia in South East Spain – they plan to install 2.5GW of solar PV – that’s 10 times more than they did in the last two years alone.
Currently domestic installations of Energy Saving Materials and technologies only attract the reduced rate of VAT at 5%.
However if Brussels Bureaucrats have their way then the cost of any energy saving measure to domestic customers will go up by 15% as they levy the full rate 20% VAT.
What does this mean?
Potentially two things,
1) it could kill the Governments’ Green Deal initiative before it has even started
2) It could be the final nail in the coffin of self funded domestic PV installations.
Below is the latest information from Brussels
VAT: Commission requests UK to amend its rules on reduced rates
The European Commission has asked the United Kingdom to amend its legislation which allows a reduced VAT rate for the supply and installation of "energy-saving materials". This measure goes beyond the scope allowed under the VAT Directive.
Under EU VAT rules, Member States can only apply reduced VAT rates to a limited number of goods and services, which are clearly listed in Annex III of the VAT Directive. This list does not include the supply and installation of "energy saving materials". Therefore, the UK’s application of a reduced rate in this area contravenes EU legislation.
The request takes the form of a Reasoned Opinion (the second stage of an infringement procedure). If the legislation is not brought into compliance within two months, the Commission may refer the matter to the European Court of Justice.
For press releases on infringement cases in the taxation or customs field see:
For more information on EU infringement procedures, see MEMO/12/464
For the latest general information on infringement measures against Member States see:
and you can see the original here:
Fast Track Review
Modification to Extension of Plants
Based on extracts from DECC website:
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.
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:
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
- Broad terms of reference for the review are available from the First review of Feed-in Tariffs (FiTs) web page.
- 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.
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:
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.
Consult = 35 days
Prepare = 27 days
Before Parliament = 21 days
TOTAL: 83 days
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.
If you’ve been considering Solar Photovoltaic (PV) for your home or business, then with the planned changes being brought forward, then it really is time to act NOW. As the saying goes Act Now or Regret at Leisure (sic).
Too many times in life we say “If only I’d” or “I could have”, or “They were lucky”.
Back in February 2011, the Government announced a Strategic review of the Feed-in Tariff Scheme, aka FiTS or FiT. that review was originally scheduled to be delivered at the beginning of 2012 (January) with implementation form March 2012, and at the time it was widely believed that it would result in a slightly large increase in the degradation rates of the Feed-In Tariff Scheme, i.e the rates would go down.
Well early indications from Greg Barker are that it will do far far more than that. FiTS was NEVER intended as an investment vehicle for pension funds, in lieu of Tax free ISA’s as the like, well in the case of Solar PV, that is EXACTLY what it has become.
Over the past 2 years the cost of the materials associated with the installation of a Solar PV has fallen dramatically and Solar panels have in the wholesale market place now become a commodity as opposed to a specialist item, with even main-stream electrical distributors stocking all the parts for a solar PV installation. The effect of this is that the capital cost of installing a 4kWp system has fallen from around £20,000 to less than £14,000 and 50kWp systems have fallen from £250,000 to around £125,000 – £150,000.
So what has that got to do with you? As I mentioned above, the original purpose of FiTS as stated on the Government’s website is:
Through the use of FITs DECC hope to encourage deployment of additional small scale (less than 5MW) low carbon electricity generation, particularly by organisations, businesses, communities and individuals who have not traditionally engaged in the electricity market. This will allow many people to invest in small scale low carbon electricity, in return for a guaranteed payment for the electricity they generate and export.
It was never supposed to be what it has become – the most lucrative investment opportunity in the UK.
The problem is that the Government has changed it’s tune, in the early days they were happy to promote it, as you can see in our download : Worcester Renewables – Free Guide to Investing in Solar PV Greg Barker was more than happy to encourage people to invest in Solar PV when he said
“Feed-in Tariffs provide some of the best secure investment returns available in the market”
Greg Barker, Climate Change Minister
Well, a lot of people took his advice, and the effect was a massive increase in the take up of solar PV – just what he wanted!
However all FiTS payments despite being paid by the electricity companies from a surcharge on all electricity bills is under EU rules considered Government expenditure, and with Strategic Spending Reviews in place, Greg Barker had to cut expenditure in this area. The catch 22 situation here is that cutting FiTS immediately stats to undermine the whole Government Green / Renewables investment strategy and may cause them problems with meeting their EU renewables targets.
So what did they do – First the launched the Strategic Review – what was supposed to be a year long exercise looking at the fundamental structure of the FiTS – and secondly the launched an emergency review which came into force in August and promptly killed of all the large scale solar PV investment.
Well the Strategic Review is about to be published – most sources are suggesting mid October, and the outcome is expected to be swift and hard, the key things are a MASSIVE CUT in FiTS payments to new Solar PV installations, and instead of waiting until April 2012, it is anticipated that this could come in as soon as JANUARY 2012, even back in August, I was predicting that it could go as low as 30p / kWh (for =< 4kWp systems) compared to the current 43.3p / kWh – and that would be in line with the above (£14,000 / £20,000 x 43.3p = 30.3p), some people are predicting it could go as low as 26p / kWh.
The time to act therefore is NOW – don’t delay for a free quotation click here: Request Your FREE No-Obligation Quote
To find out just how LUCRATIVE the current scheme is – and to see how much you will earn from the FITS – Click here: Energy Saving Trust – CashBackCalculator
For more background information on how rapidly this area of FiTS see these recent articles:
Worcester Renewables Ltd is an MCS Registered Installer of Solar PV systems and installs both Domestic and Commercial Systems, and is registered with and bound by the REAL consumer code.
Article reprinted from Blogs by Guest Blogger Published on 07 October 2011 Updated on 07 October 2011
Original article here:: http://www.solarpowerportal.co.uk/blogs/50kw_pv_installations_will_there_ever_be_a_better_time_for_co5478ial_solar/
In the lead up to the Comprehensive FiT Review there is really no better time to invest in solar energy.
In the wake of the Fast Track Feed-in Tariff Review there may never be a better time to install a 50kW PV system in the UK.
The cost of a 50kW commercial solar photovoltaics (PV) system in the UK has now reached a price range of £130k to £150k. With the UK feed-in tariff set at 32.9p/kWh generated, I would argue that UK solar PV is currently in a bubble — one that serves up a golden opportunity for businesses to add solar PV to their property. David Owen’s excellent blog post on the new FiT, prices and the future for solar in the UK: Part 1 only serves to underline this point. In my opinion, it is unlikely that there will ever be a better time to act, so my advice would be: fill ‘yer boots!
A commercial 50kW PV system, taking up the rooftop area approximately the size of two tennis courts and located in the middle of the UK, would typically generate between £13k and £17k in FiT income and energy bill savings annually, generating a profit of approximately £260k over 25 years. Now, when you consider that the FiT income is index-linked to the CPI as well as being Government-backed, as a business case, commercial solar PV is a now a ‘no brainer’. This point is only accentuated as electricity prices escalate.
However, as good as this all sounds, many of us in the commercial solar sector know all too well that the timescale of a client’s decision and action is one of the key threats to the likelihood of projects proceeding at all. This issue became apparent when developing large-scale solar parks in the UK . Parks that were built were associated with landowning clients who actually took decisive and prompt action to proceed, therefore cutting through solicitor and agent delays. Yet for every landowner’s project brought into fruition before the August 1 FiT deadline, five are now, in hindsight, bitterly disappointed that their project didn’t make it. Many of these were cancelled purely due to delays in decision and action.
The time is now
To avoid similar disappointment businesses thinking of installing ~50kW solar systems must now act quickly or risk missing out. With less than six months remaining for solar PV systems to become operational and registered on the current FiT rates, there is effectively only two months left for businesses to begin the process of adding new solar to their property portfolio.
It is important to remember that although a survey and PV system design can be done quickly, planning permission typically takes three months and an application to connect the system to the electricity network is generally a two month exercise.
New applications must be in by the end of November 2011 to have realistic chance of being installed in time.
Unfortunately making decisions quickly is not always something that Business Managers are always encouraged to do. However, we are beginning to see signs that the message of the need for speed is just starting to get through. In fact, one of our clients is now vigorously taking the solar message to its Local Council and wider Government sector with the headline. Likewise we are seeing individual barn or rooftop owners decide that now is the time to act — particularly those farmers in Cornwall that are becoming more expert than the experts in solar PV!
Over the coming weeks we anticipate evaluating and planning hundreds of 50kW business solar PV systems for telecoms, transport, local council and agricultural clients in the race to be installed prior to April 2012, when the effects of the Comprehensive FiT Review will set in.