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News – Solar PV subsidy review by DECC in UK – FIT tariff cuts expected by June 2011.

Filed under: Latest News
  • PV solar farms feeding-frenzy triggers urgent FIT review.

  • DECC’s “Comprehensive” FIT review is “pants-off-scary”.

  • RHI announcement delayed again until March.

  • Solar industry “self-regulation” fails the consumer.

Solartwin news: 7 Feb 2011.

The UK Government is, in effect, doing a solar U-turn. Its solar policy wonks clearly got its subsidy level numbers wrong on solar electricity subsidy levels (ie payments per unit of solar electric energy) when it set up the Feed In Tariff (FIT) renewable electricity subsidy scheme.

Growing evidence that a rush of international speculative investment in large scale solar farms, on good quality farmland in southern England will cause all FIT subsidy funds to run out, is causing Government to urgently review the amount of money they pay per unit of renewable energy that is generated.

But it may not all be bad news for farmers: a dismally takeup for on-farm-generated biogas generation suggests that this particular green energy variant may actually get more subsidy!

So, what does all this mean for domestic scale solar PV electricity? Will green energy subsidy levels be cut for newcomers to home PV generatiion? Will homeowners who want to install PV’s on their roofs dash to get on board today’s higher rates before they, perhaps, fall? The answer is anybody’s guess.

On one hand, the UK government appears to show general support for domestic-scale solar PV installations, (but not for farm-scale PV). On the other hand, last year, soon after the FIT’s were launched, a centre-right thinktank called for ALL Feed In Tariff PV subsidies to be abolished!

Might people planning domestic-scale PV’s miss the boat? The official government press release is reproduced in below [with OUR asides and comments, added in square brackets. I hope the annotations inspire you to laugh, or at least, to groan tunefully].

We live in interesting times!

Sunny regards, Barry.

PS. Hidden away in this week’s FIT review announcement is also news that Government hopes to publish “measures to support renewable heat” in March. Presumably a reference to the Renewable Heat Incentive (RHI). An announcement on the R.H.I. has been repeatedly delayed since last December, perhaps partly due to the fact that the Office of Fair Trading (OFT) has taken a (long overdue) interest in the renewable energy sector, within which, the solar water heating industry has managed to give itself permission from “regulators” to (a) cut corners on customer safety and (b) indulge in rampant solar heating performance overclaiming in order to maintain market dominance for traditionally-built mains-pumped solar thermal technology. For more on the “OFT off grid energy study” see: http://www.solartwin.com/office-of-fair-trading-oft-to-probe-renewable-energy-industry

News from: pressoffice@decc.gsi.gov.uk Sent: 07 February 2011 10:04
Subject: DECC Press Notice: HUHNE TAKES ACTION ON SOLAR FARM THREAT

Comprehensive review of Feed in Tariffs starts now to provide investment certainty [Certainty for whom – Treasury, consumers or industry?]

Fast-track consideration to be launched into large scale solar installations and farm-scale Anaerobic Digestion plants. [How fast is not clear but we suspect it means by the start of the summer parliamentary recess: ie June]

Energy Secretary Chris Huhne has today launched a comprehensive [not partial – in other words, anything may happen – wow!] 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. [Translation 1: the coalition inherited the FIT’s from the previous government. With it we are now keen to tinker, now that we have been in power for over half a year. Translation 2: the solar industry’s oil-free lobbyists managed to mug the last government, but this is something up with which we will not put no more, no more, no more…]

Since FITs began last year it has been a huge success at stimulating green growth, driving innovation, creating jobs and cutting carbon. [Translation: Government supports the concept of green energy and green energy jobs, but have reservations about some aspects of its direction. The bucket has a huge hole in it.]

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. [Translation 1: the domestic nature of these installations has cross-party support. Translation 2. How to lie with statistics? Well, counting installations is but one measure. If you count the actual amount of energy generated from a small number of huge solar farms, and you can see that the domestic voter, sorry,. green energy user, is getting squeezed out very fast.]

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. [Translation 1: We are only being responsible. Translation 2: Just look at these scary dates! 7 May 2015 is the date of the next general election. We’d look like a bunch of charlies if the FIT budget ran out before then, wouldn’t we?] We also hope to publish next month measures to support renewable heat within the budget agreed at Spending Review. [Note: This last announcement means that solar water heating panels may soon get subsidised again, after having been sidelined by PV’s for a year. Great news!]

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 [Translation 1: just don’t blame us! Translation 2: This scares the pants off us, old chap!] 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 [Translation: the pot will obviously run dry for everyone if we don’t stop PV farming very soon.] .

The comprehensive FITs review will:

  • Assess all aspects of the scheme including tariff levels, administration and eligibility of technologies [Comment: scary! Does this “eligibility of technology” assessment mean that the least cost-effective technologies, in carbon terms, which are PV’s, might become ineligible at some (or all!!!) scales of installation? One centre-right think tank supports this idea and calls for a complete end to FIT subsidy for all PV’s, saying “At the very least, some policies which are wasting money should be abolished, including the feed-in tariffs.” See: http://www.solartwin.com/green-policy-think-tank-calls-for-abolition-of-feed-in-tariffs];
  • Be completed by the end of the year, with tariffs remaining unchanged until April 2012 (unless the review reveals a need for greater urgency) [This, on first impression, gives some certainty to householders who may buy PV as late in December 2011 that as long as they install quickly they will get on the current FIT rates. But the round brackets at the end withdraw that certaintly!];
  • Give 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. [UK trade bodies think that the scrapping of large PV solar farm projects may begin in June 1011 at the latest.
  • [Poo Gas] 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. [AD is a great technology, but it not very sweet smelling, cuddly or attractive for photo-opportunities: it usually involved pumping vast amounts of poo into a warm dark tank and then burning the methane gas which bubbles off it.] 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. [Note: the word “attractive” was not used. For good reason. Methane has a global warming impact fifty times that of CO2, which is the gas which is emitted when it is burnt. Let’s hope that there are no leaks.]

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. [Phew: this is VERY reassuring! But for those people who do not have FIT eligible PV solar electric installations and who do have the cash to invest it would be prudent to buy now.]

Notes for editors:

1. Broad terms of reference for the review are available from www.decc.gov.uk/FITS
2. According to Ofgem, the total installations to date (to 26th January 2011) under the FITs scheme are as follows:

Anaerobic digestion
Hydro
Micro CHP
PV 19854
Wind  1132

The total installations have a combined capacity of 76.66MW.

Department of Energy and Climate Change
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