PHASE 1 & 2 FITS ANNOUNCED

Phase 1 and Phase 2 Feed-in Tariff summary announced - February 9, 2012

Renewable Energy News Alert

Phase 1 – Solar PV

Phase 1 (Phase one) proposes that the tariff rate of 21p/kWh for solar PV will take effect from 1^st April 2012 for domestic installations (<4kW), with an eligibility date on or after 3^rd March 2012.

For installations which take place on or after 1^st Aril 2012, properties will be required to meet Energy Performance Certificate (EPC) ‘D’ rating to qualify for the full Feed-in Tariff (FITs) rate.

The Department of Energy and Climate Change (DECC) estimate that half of all UK properties are already eligible for the ‘D’ rating.

From 1^st April 2012, a new ‘multi-installation’ tariff rate will be set. This will be set at 80% of the tariff for solar PV installations where an individual or organisation has more than 25 installations of solar panels (e.g. at various properties).

DECC are also consulting on a proposal that social housing, community projects and distributed energy schemes be exempt from these multi-installation tariff rates and will therefore still be eligible to receive the individual tariff.

Phase 2 A – Solar PV cost control

The consultation for Phase 2 A (Phase two) proposes the implementation of a ‘cost-control’ mechanism, whereby the tariff for solar PV is reduced by 10% every 6 months.

However, this will be dictated by the level of take-up for solar PV – a ‘deployment trigger’ – to ensure that subsidy levels are in line with solar PV costs. This is inspired by the German system, and is designed to remove the need for emergency reviews and create a stable, predictable future for solar PV and the FITs scheme. It is also intended to keep the long-term costs of installing solar panels down in order to increase the number of people able to benefit from the FITs over time.

This consultation will be open for 8 weeks from 9^th February to 3^rd April 2012.

Phase 2 B – Tariffs for non-PV renewable technologies and scheme administration issues

Phase 2 B (Phase two) is reviewing the tariffs for the four non-PV renewable energy products: wind turbines, Hydro, Anaerobic Digestion and micro-CHP.

This will also introduce a digression mechanism dictated by ‘cost evidence’ – past and future trends in the costs of equipment and installation.

It will propose the ‘tariff guarantees’ for wind turbines, anaerobic digestion and hydro projects so that consumers of these technologies can have certainty about the rates of return they will receive.

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Short Video on Powerfilm Solar Golf Cart. 

Government Loses

Government loses second case on solar tariff cut

The government had said the subsidy cut would ensure the scheme carried on in the future

The government has failed in an appeal against a decision which blocked its attempts to reduce solar subsidies.

The Court of Appeal case involved the government's move to halve the payments made to households with solar panels, which it says are unsustainable.
However, the government has said it will seek leave to take the case to the UK's Supreme Court.
Under the feed-in tariffs programme, people in Britain with solar panels are paid for the electricity they generate.
The rulings will not affect households that have installed panels before the changes on 12 December.
Solar businesses and campaigners had warned thousands of jobs could be lost as a result of the proposed tariff cut.
"We want to maximise the number of installations that are possible within the available budget rather than use available money to pay a higher tariff to halve the number of installations," said Energy and Climate Change secretary Chris Huhne.
Employers' group the CBI said the government should abandon its legal battle.
"The judgement should be used to draw a line under this saga, which saw the government scoring a spectacular own goal and confidence in the renewables sector undermined," said director general John Cridland.
Damian Kahya Business reporter, BBC News
The latest twist in the legal battle over solar subsidies will leave consumers more confused than ever.
When the government announced that subsidies would be halved from 12 December, it prompted a rush of installations, but not everyone beat the deadline.
However, that cut has now been declared unlawful by two courts.
It means consumers may still be able to get the higher rate on installations finished since 12 December, at least until the government's new cut-off period of 3 March.
With the 43p tariff one of the most generous in the world, many may be tempted to take a punt.
But with legal action now moving to the Supreme Court, consumer group Consumer Focus is warning consumers to ensure they can still afford the lower, 21p rate, before investing.
If not, the government may yet win its case and consumers who have installed panels since 12 December would be caught short.
Confusion

The decision, and the government's intention to launch a second appeal, will lead to widespread uncertainty for consumers and installers.

It means consumers cannot know what subsidy they will receive for any panels installed since 12 December.
The previous tariff was just over 43p per kilowatt-hour generated.
The new tariff of 21p per kilowatt-hour had been expected to come into effect from 1 April.
But in October, the government said the cut would take place ahead of schedule, with the reduced rate paid to anyone who installed solar panels after 12 December.
The government announced a consultation on the proposals, which closed on 23 December - 11 days after the decision was to have been implemented.
The High Court ruled that changing the tariffs in this way was "legally flawed", a decision the Court of Appeal has now upheld.
The change had particularly upset industry, as it affected projects which may already have been commissioned, but not installed.
"This decision has very important implications for the whole renewable energy sector in the UK," said Ben Warren, a partner at Ernst and Young.

Excerts from Solar Energy

RE FITS
. Do these tariffs mean that small-scale schemes such as domestic installations will still be financially viable if they are under 4kW?
A. According to the UK Government:

• The FITs scheme was designed to deliver a rate of return (ROR) of 5-8% for well located installations.
• The new proposed tariff of 21p is intended to deliver a 4% ROR for well located installations.
• A 4% (real, tax free) return for domestic PV is more appropriate bearing in mind how the investment market has changed since the FITs scheme was introduced.

Q. Will the UK Government be increasing the export tariff to make it more worth my while and to compensate for the reduction in the FIT?
A. The UK Government does not plan to change the export tariff from its current level during this review.
However, the FITs scheme will be subject to periodic reviews which will consider all aspects of the FITs scheme, including tariffs levels, degression rates and methods and make changes if necessary. The second stage of the Comprehensive review, which will be published shortly, will provide more detail on these aspects.

Updated today

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www.solartoysandgadgets.co.uk