Drastic cut in FITS generation rates?

[tonybrett]

I've just read this on moneysavingexpert.com

"Update: 18 Oct 2011. Free solar subsidy could be slashed

We've heard strong industry rumours the rules may soon change, so if you want solar (free or bought), go quick.

The Government may be due to cut feed-in payments by 50%+ for those installing after 31 March '12, though changes are unlikely to affect those already signed up. If you want to take advantage, hurry, as it takes time to sort and could spell curtains for free solar. "

(See http://www.moneysavingexpert.com/utilities/free-solar-panels#what)

MSE is normally quite a reliable source of information.  Does anyone have any other information on this?

I know it won't affect me as our system is already installed and commissioned but I guess it will be a worry for those who have invested a lot in setting up installation companies.

Tony

[rondurrans]

http://www.navitron.org.uk/forum/index.php/topic,15294.msg171268.html#msg171268

[GavinA]

Our position hasn’t changed. All tariffs in the scheme are being considered in the Comprehensive Review and we will be consulting on proposals later this year. We’ve made clear that tariffs will remain unchanged until April 2012 unless the review indicates the need for greater urgency.

 

The FITs scheme is paid for by energy consumers through their bills and has a fixed budget. The scheme is proving popular with households and we’re continually monitoring the take up of the scheme to make sure that we stick to budget.

 

Sorry we can’t provide more detail that that at the moment.

from Rachel Solomon-Williams the head of FIT review at DECC to BPVA in response to this rumour.

Dear Member,

 

I am aware that in the past 24 hours many of you have received information that FIT is under an imminent fast track review and may be cut to as low as 9 pence across the board. The BPVA Board of Directors and I have been in contact with DECC officials to clarify this and we have been re-assured behind reasonable doubt that these are unsubstantiated rumours. I am sure that you agree firstly,  this kind of news at this crucial time has a negative impact on the whole industry, it is counter productive and also may give ideas to DECC!?

 

I have written to those responsible for spreading these rumours and have asked them to clarify on what basis they have made these announcements. I will update you with any progress however the e-mail sent out has a sentence saying “We need resources - both cash, people and other resources to help coordinate and run a campaign to tell this story …” , I leave it to you to judge what their motive is behind writing such e-mails?

 

I will get back to you as soon as I have further news,

Kind regards,

Reza

initial email from BPVA to members.

tbh, I don't think anyone really knows, even the people at DECC, as a lot of it depends upon take up, and how close we're getting to the treasury imposed limits for FIT spending. I'm currently working on an assumption of a 25-30% cut at the end of March, and I think we could live with that. 50% in one go would be a huge blow, and I really don't think the government would go that far as there'd be no justification for it, particularly not after they made such a big thing out of FIT being mainly meant to encourage domestic installations when they slashed the rates for the big installations. Their green reputation would lie in tatters if they chopped it by 50% and destroyed the entire industry in the process.

[stuartiannaylor]

hopefully they will cut the red tape and unfair tiered FIT rates and put all renewables on the same level for KW produced and saved. Then innovation and the market will decide what is best for the country than some quango.

[GavinA]

hopefully they will cut the red tape and unfair tiered FIT rates and put all renewables on the same level for KW produced and saved. Then innovation and the market will decide what is best for the country than some quango.

well, all that would do would be to utterly kill off the solar PV market in the UK at a time when it's delivering something like 20% per annum reductions in installed costs. Surely it makes more sense to keep supporting it at a higher rate for another few years but reducing year on year to force the price down to the point where it is at least competitive with wind etc rather than killing it dead now as your proposal would do.

[baker]

Hi
 in Roi  the ESB the 9 cent payment is set to end on 31 DEC 2011
with no guarantee of a feed in tariff
it was extended  for one year last year, and not sure how its going to go next year
what can be done?
 

[StationHouse]

Starting to panic here, just about to pay deposit for PV and worrying that the FITS will be cut or is this only for install after mar 2012 

[M]

hopefully they will cut the red tape and unfair tiered FIT rates and put all renewables on the same level for KW produced and saved. Then innovation and the market will decide what is best for the country than some quango.

The whole point of subsidies, is to subsidise the young, weak and fragile. Forget any ideas of level playing fields, FITs is there to artificially lead / help the market reach a point that it would either not reach, or would take longer to reach. If you don't agree with any support for renewables then fine, I see your point even if I don't agree with it. But if you are arguing for intervention but only if it is equal, well that simply isn't what intervention and subsidies do!

Regarding your last sentence. Innovation always need a helping hand unless you are willing to wait longer. The market will give us coal fired power stations as they are cheap and easy. And what QUANGO are you referring too, DECC is a government department?

Martyn.

[M]

Starting to panic here, just about to pay deposit for PV and worrying that the FITS will be cut or is this only for install after mar 2012 

StationHouse - don't panic, but....

1. FITs has a scheduled reduction for new installs from 1/4/12.
2. Current review widely expected to recommend a larger reduction from 1/4/12.
3. Worst case, I think unlikely, but certainly possible, that reduction date could be brought forward as soon as review is complete, eg 1/1/12. *

None of the above will be retrospective, though anything is technically possible, whether or not probable.

Technically an install that is certified a few days before end of March should qualify (thoughts?) but I have been suggesting to friends that they aim for an install date no later than late Jan, to give 2 months to complete FITs applications just in case. Might now suggest they aim to complete install this year!

* Made up by me as an example, please don't quote me.

Martyn.

[StationHouse]

Thanks for easing my mind...

But this govt is a joke, policies are so short term that it's impossible to plan for the long term. I don't think RHI for my ASHP will come to anything despite all the govt hype and now FITs under attack 

How many months does a FITs application take?

[A.L.]

hello,

stationhouse & M,

this from Ted indicates that the 'eligibility date' is the important detail, and it can be the commisioning date - www.navitron.org.uk/forum/index.php/topic,15252.msg170794.html#msg170794

[Ted]

Yes, write to your supplier now telling them you plan to apply for a FiTs contract once the system is installed and all the paperwork is available. Then you should be able to get the commissioning date as the start of your contract.

On the note of cuts - this report is the most detailed and up to date info I have seen - http://www.solarpowerportal.co.uk/news/industry_fears_mount_in_the_lead_up_to_the_comprehensive_fit_review_5478/ - covering the level of systems being installed and consequent pressure on DECC to make reductions. (Even OFGEM haven't published that.)

[StationHouse]

Thank you 

[tange179]

Whilst a "guarantee" means existing installs should continue to receive the current level of FIT, this is by no means guaranteed. However if they were to change the rules retrospectively all hell would break loose, and this is highly unlikely to happen in my opinion.

Slashing the rate for future installs too heavily and many jobs will be lost, so a balanced solution is needed and I believe we will get this i.e. the FIT rate will still be an attractive proposition but the rate of return will be much lower but perhaps slightly higher than the average deposit savings account.

If you are sitting on the fence, it may be worthwhile talking to your installer......considering that a parts shortage (inverters for example) may leave you out of pocket....need I say anymore.

John

 

[M]

Thanks Ted, that's a very interesting report.

In an effort to be fair, I'm trying to imagine what I would do if I was the DECC. Balancing an expanding industry against limited funds. Decided I'm glad I don't have to make that call.

I think I'd steal an idea Gavin A has mentioned a few times and go for regular staged reductions. Perhaps 35p in April, 30p in Sept, then 25p April 2013. Which would be about half the current FITs assuming roughly 43.3p +5% twice, so around 48p. Hopefully by then a 4Kwp install will be around £8k.

StationHouse, do what Ted said and get everything ready asap. I sent off all my paperwork the day I had all the certificates (the morning after the install). EDF say that it will run from that day, and have confirmed by e-mail that they are processing it (15/8/11), and subsequently by phone 2 weeks ago. I'm reasonably calm and confident, however, if those 2 months happened to be straddling 1st April, I might start sweating a bit, but that's just me!

Martyn.