FITs consultation - please respond, and make your views known!

[Ivan]

Ted kindly sent me this link to the consultation on the change in FITs rates for PV:

https://econsultation.decc.gov.uk/office-for-renewable-energy-deployment-ored/comprehensive-review-part-1/consultation/intro/view

You can submit a response online here - https://econsultation.decc.gov.uk/office-for-renewable-energy-deployment-ored/comprehensive-review-part-1/consultation/intro/view

PLEASE DO SO. USUALLY VERY FEW PEOPLE RESPOND (~700), SO IT'S YOUR CHANCE TO PROVIDE SIGNIFICANT INFLUENCE ON THE SUBSEQUENT DECISION

I'll post my responses below.

[Ivan]

Q1. Do you agree or disagree with the proposed new tariffs for solar PV? Give reasons to support your answer

Disagree.

The cuts are too severe, too sudden and very damaging for the industry. As a result of the cuts, much less PV will be installed in the UK, undermining the purpose of the FITs scheme altogether.

The cuts are based on the government's selfish view that investment in PV should not be attractive. Even under the current situation (attractive investment opportunity), a very small minority of householders and businesses have invested in PV. The success of the scheme (intended to reduce UK's CO2 emissions) is not adversely affected by investors. In fact, investors are very helpful in reducing CO2 emissions from the poorest households (who could not afford to fit PV) whilst reducing the monthly overheads of these people providing both environmental and economic benefit. These households would simply not install PV without the investors.

I believe that investors are being unfairly penalised. Investments are taxed (whereas homeowner's income from self-funded PV is not taxed), so there is no need to provide this extra disincentive.

The rate of return for investors (people or organisations with more than one PV installation) and for installations over 10kW is insufficient to warrant the investment in PV. Rates of return may be attractive compared to financial investment products, but you must also consider that the original capital expenditure is effectively written-off entirely during the course of the 25year FITs period - unlike normal financial investments where the original capital is returned at the end of the investment, and of course the Rate of Return calculated by the government takes no account of maintenance, insurance, repairs or warranty costs.

The situation in Germany is clearly one that the government aspires to emulate, however, despite similar populations, Germany installs over 5 x as much PV annually as does the UK, even though the German scheme is well-established, having  run for several years.

The UK government published clear guidance for the industry showing staged reductions in FITs. The proposed changes equate to Year9 of the original FITs proposal.

The UK government claims this emergency measure is because of 'faster than expected uptake' of PV. I suggest this is not the case for two reasons 1)We install less than a fifth of the PV that Germany installs annually, and Germany can be considered a stable FITs situation given that it has run already for 7years there 2)The government did not publish target figures, therefore there is no reference to claim the uptake was faster than expected.

[Ivan]

Q2. Do you agree or disagree with the proposal of applying the new tariffs to all new solar PV installations with an eligibility date that is on or after a reference date that comes before the legal implementation of those tariffs? Give reasons to support your answer.

No

I believe the situation is being over-complicated with a view to short-changing a relatively small number of people who install between 12December and 1st April.

I also believe that this widely publicised proposal is intended to cause an industry crash, which will result in many redundancies in the sector, which might ultimately (pending final government and legal decisions) be avoided. Of course by doing things this way, the government has forced this crash to occur regardless of the government's final decision and regardless of the legal basis upon which they could make such a decision

[Ivan]

Q3. Do you agree or disagree with the proposed reference date of 12 December 2011? Give reasons to support your answer.


Disagree

I believe that to provide 1)stability to the industry and 2)confidence in our political leaders the changes in FITs should take place as scheduled - annually on 1st April.

If the government demonstrates that it can pull the rug from under the industry's feet at any moment in time, confidence in the scheme will also be undermined, and many potential customers are already citing lack of confidence in the government's long-term committments to FITs, given that it has demonstrated that it cam move the goalposts whenever it chooses.

[Ivan]

Q4. Do you agree or disagree with the proposal to introduce new multi-installation tariff rates for all new solar PV installations that meet the definition set out above and have an eligibility date of on or after 1 April 2012? Give reasons to support your answer.

Disagree

This is aimed at making PV less attractive for investors than for home-owners. This has a negative impact on the poorest households who rely on investors to provide free PV systems. The rates changes make this much less likely to occur now, without any additional reduction. Also, bear in mind that investors will pay income tax / corporation tax on the revenue, so they are already 20-50% worse off than home-owners before any additional disincentives.

Making investment in PV unattractive will obviously reduce investment in PV, but it also ensures that only the most attractive investments are made (ie 4kW South-facing unshaded locations) - this will be unfair on those who have less than ideal properties to attract outside investment to provide their PV systems

[Ivan]

Q5. Do you agree or disagree with the proposed multi-installation tariff rates? Give reasons to support your answer.

Disagree

No further reduction is necessary for investors, who already pay additional taxes by comparison to owners of single systems

[Ivan]

Q6. Do you agree or disagree with the proposal that for solar PV attached to a building, eligibility for the standard tariffs proposed in chapter 2 should be contingent on a minimum energy efficiency requirement being met? Do you have views on whether such a requirement should apply in relation to all buildings or just to dwellings or non-domestic buildings? Give reasons to support your answer.



I agree with this proposal, but only on the basis that the targets for energy efficiency relate to what is physically possible for that particular building.

For example, older buildings will be substantially more difficult to bring up to a high standard of energy efficiency, and for some buildings (eg listed buildings), government policy prevents owners from achieving the minimum standards proposed.

I think it perfectly reasonably to expect householders to attain minimum standards of energy efficiency if these standards are practical and inexpensive. However, if we set the standard too high, then neither the Solar PV nor the energy efficiency improvements will be instigated.

However, it brings about problems for investors - poor households can reduce their energy bills and CO2 emissions substantially (by up to 4000kWh / £800 / 2tons CO2) regardless of their household insulation efficiency for example. It would be unreasonable to expect an investor to pick up the cost for cavity wall and loft insulation - so this may prove a barrier to uptake.

The government clearly takes a dim view of investors, but the government must realise that investors are the key to providing solar PV for low-income households - unless of course the government is prepared to foot the bill for these installations

[Ivan]

 Which of our two lead options for the energy efficiency requirement – requiring a building to achieve a specified EPC rating , or requiring the installation of all measures that are identified on an EPC as potentially financeable under the Green Deal - do you prefer for (1) dwellings, and (2) non-domestic buildings? Give reasons to support your answer.

ANSWER: Option 2 (Requiring the installation of all measures that are identified on an EPC as potentially financeable under the Green Deal)

I believe that the 'Green Deal' is an unworkable project, but not for discussion here.

If a mechanism exists (such as EPCs) which can identify the maximum potential improvement, then clearly it is nonsensical to demand a higher standard unless the aim is to prevent some home-owners from achieving eligibility.

However, as previously stated, I think there are significant problems in linking PV to energy performance targets simply in that it will put some people off the idea of installing PV. If this is the aim of the proposals, then it is a mechanism which will work, but my understanding of the FITs scheme is that it is intended to encourage people to install PV rather than to discourage them.

[Ivan]

Q8. Under the first option for the energy efficiency requirement, do you agree or disagree with the proposal that the EPC rating required to be achieved should be level C or above? Give reasons to support your answer.

Disagree

It would allow people with Energy Certificates of C or above to make no effort, when in fact, they could make a significant improvement to CO2 emissions by making simple and cheap changes (eg increased loft insulation)

It prevents people living in older accommodation from becoming eligible for PV. Just because someone lives in an old and therefore energy-inefficieny house should not preclude them from installing PV. Listed buildings and churches are good examples of properties which could not become eligible for PV FITs.

[Ivan]

Q9. Do you agree or disagree with the proposal that, for a transitional period only, all solar PV installations attached to a building should initially qualify for the standard tariff, and their continued eligibility for that tariff should be conditional on the building to which the PV installation is attached achieving the energy efficiency requirement within a specified period? Give reasons to support your answer.


Agree.

It allows the revenue generated from the PV system to be used to bring the property up to a higher energy-efficiency standard, that perhaps could not be afforded otherwise

(Q10 and Q11 - no comments)

[Richard Owen]

Done.

[M]

Ivan, may I ask what tariff rate(s) you propose?

Thanks.

Mart.

[Baz]

A bit messy with multipart questions like No 6 but at least it worked on a basic computer with old browser and didn't need one to pay homage to the empire of new OS/browsers. Email ack was instant too.
Pity my common sense responses will be totaly ignored in favour of some political/big business agenda.

[desperate]

 

Desp

[Ivan]

I haven't considered what the tariffs should be - it's not one of the questions, unless I missed something. My main objections are to the manner in which the rates have been suddenly and unexpectedly slashed, and the effects on the industry - both directly in immediate damage and the long term effects caused by a lack of confidence in the government. The viability of solar hasn't suddenly changed, so there should be no need for sudden changes in policy, and the uptake of solar hasn't been dramatically increased (although I did hear someone - energy minister? - citing the massive increase in solar uptake over the last 6weeks as evidence of the need for change in legislation....clearly doesn't rate the public's intellect very highly!