Breaking solar news UK:
The outcome of the (still legally-challenged) solar PV FIT consultation was published today, 9 Feb 2012.
DECC PV FIT cuts: PRESS release web page.
DECC PV FIT cuts: MAIN document pdf.
Key points for domestic PV FIT customers are:
- 21p per kWh domestic solar PV FiT from 1 April confirmed, with retained, but lower that proposed, minimum energy criteria.
- There is a home energy performance certificate EPC level D threshold, not level C. [Could have been worse.]
- Dropping to D scopes in 51% of homes instead of 15% (for C) at no energy upgrade cost. [Still affects half the country.]
- But 49% of homes will have to pay to upgrade their homes (or get only about 9p FIT instead of 21p). [One chunky incentive to comply!]
- Upgrading from level F to level D could include insulating your loft, cavity walls and hot water cylinder, fitting heating controls, and getting a new boiler. [Ouch!]
- Our estimates are that the cost of upgrading, if you do not need a boiler, should be under £2k for most homes. [Not too bad. Level C needs about £5k]
- But solid wall insulation will not be required. This exemption will help to avoid ghettoising older homes. [Phew…]
- Where level D is impossible to reach there will be an exemption. How to get this exemption is not yet clarified. [Errr…]
- Our thoughts are that an EPC lock-in may disadvantage small and medium companies and give EPC surveyors an upper hand in product specification. [Baksheesh…]
- Solar PV FIT levels are likely fall further and stepwise over time, probably more frequently but less chaotically than before, in line with targeted deployment of the technology.[OK]
- Once you get on a FIT rate, you will still remain wedded to it, index linked for 25 years. [Laughing alltheway to the stateowned crumblebank with wadsa newprinted statemoney.]
- Some aspects are still under legal review and might yet change! [Arrghhhhh…]
Solar Twin Ltd say that nevertheless, this package is a relatively good outcome for domestic solar PV customers.
But the news does mean that there are 2 dates where homeowners may lose out from if they do not act soon.
- Date 1 remains 2 March 2012, after which any chance of getting a 43.3p FiT vanishes. The tariff then becomes 21p. This “double or quits” opportunity is why we are seeing another surge in orders right now.
- Date 2 is 1 April 2012. After this date, about half of all UK homes will have to spend extra to upgrade their homes’ energy efficiency and to have certified this by 1 April 2013 in order to get 21p instead of 9p. This is likely to bring another surge of orders.
However, the DECC FIT review news for non-domestic customers of solar PV is less fun, with massive tariff cuts planned and industry fears that large scale solar PV (which is inherently more cost-effective than small scale) will lose out bigtime in favour of what looks increasingly like an electorally driven “democratising green energy” policy of giving posh voters a larger slice of a shrinking pie.
As for the free PV market, major concessions are being made to small “rent my roof” (RMR) operators, in that if they get income from under 25 properties they will not get the new 20% FiT penalty imposed on large RMR operators. No doubt this is intended to support community based solar PV projects, but it is just as likely to bring consultancy megabucks to creative corporate accountants who will work out how to legally fragment the larger (ie 20% penalised) RMR companies with over 25 properties into smaller, free-standing microbusinesses with 24.9999 properties each. How carefully have DECC thought about this getaround possibility?
Looking at domestic solar panels in general, a huge begged question remains: and it is one of solar technology parity. The domestic solar thermal market collapsed by over 75% following the introduction of the FIT. If UK government departments such as BIS and DECC want to UK innovation to thrive, then they need to give a level playing field to solar thermal and to implement support which enables domestic solar thermal technology to break even in the same number of years as solar PV. There are only 5 established SME business in UK making solar water heating panels and government now needs to ensure they they become world-beaters rather than just shadow-lurkers, shaded out by largely imported PV panels.
Full text of the DECC solar PV FIT press release follows:
Improvements to the Feed-in Tariffs scheme
Press release 2012/010
09 February 2012
The Government has today announced plans to ensure the future of the Feed-in Tariffs scheme to make it more predictable. Transparency, longevity and certainty are at the heart of the new improved scheme.
The reforms will provide greater confidence to consumers and industry investing in exciting renewable technologies such as solar power, anaerobic digestion, micro-CHP, wind and hydro power.
The Feed-in Tariffs (FITs) scheme provides a subsidy, paid for by all consumers through their energy bills, enabling small scale renewable and low carbon technologies to compete against higher carbon forms of electricity generation.
The surge of solar PV installations in the latter part of last year, due to a 45% reduction in estimated installation costs since 2009, has placed a huge strain on the FITs budget.
Climate Change Minister Greg Barker [Solartwin’s note: why are they saying he is climate change minister?] said: “Today we are announcing plans to improve the Feed-in Tariffs scheme. Instead of a scheme for the few the new improved scheme will deliver for the many. Our new plans will see almost two and a half times more installations than originally projected by 2015 which is good news for the sustainable growth of the industry. We are proposing a more predictable and transparent scheme as the costs of technologies fall, ensuring a long term, predictable rate of return that will closely track changes in prices and deployment.
“I want to see a bright and vibrant future for small scale renewables in the UK and allow each of the technologies to reach their potential where they can get to a point where they can stand on their own two feet without the need for subsidy sooner rather than later.”
A better FIT scheme for consumers and communities
- A tariff of 21p/kWh will take effect from 1st April this year for domestic-size solar panels with an eligibility date on or after 3rd March 2012. Other tariff reductions apply for larger installations.
- The Department has listened carefully to feedback on the energy efficiency proposals that we put forward in the consultation of 31st October. Properties installing solar panels on or after 1st April this year will be required to produce an Energy Performance Certificate rating of ‘D’ or above to qualify for a full FIT. The previous proposals for a ‘C’ rating or a commitment for all Green Deal measures to be installed was seen as impractical at this stage. We estimate that about half of all properties are already eligible for a ‘D’ rating.
- From 1st April 2012, new ‘multi-installation’ tariff rates set at 80% of the standard tariffs will be introduced for solar PV installations where a single individual or organisation is already receiving FITs for other solar PV installations. This reflects the lower costs of such installations, as they benefit from the economies of scale. Based on the feedback received, the threshold is set at more than 25 installations. Individuals or organisations with 25 or fewer installations will still be eligible for the individual rate. DECC is now consulting on a proposal that social housing, community projects and distributed energy schemes be exempt from these multi-installation tariff rates.
- The tariff for micro-CHP installations will be increased to recognise the benefits this technology could bring and to encourage its development.
A better FIT scheme for industry
- In line with the evidence of falling costs for solar PV, DECC is proposing to peg the subsidy levels to cost reductions and industry growth to provide more certainty for future investments. This will ensure that subsidy levels keep in step with the market. It builds on the best of the existing German system and will remove the need for emergency reviews.
- Using budget flexibility to cover the overspend resulting from high PV uptake this year, while still allowing £460 million for new installations over the Spending Review period. This won’t have any impact on consumer bills beyond the agreed overall cap on renewable subsidies as it will primarily be funded from an under spend on the budget allocated for large-scale renewables.
Notes for editors:
1. The documents published today can be found at:
- Response to FITs Phase I consultation
- Comprehensive Review of Feed-in Tariffs – Phase 2A: Solar PV cost control (consultation closes on 3rd April)
- Comprehensive Review Phase 2B: Consultation on Feed-in Tariffs – Non-PV tariffs and scheme administration issues (consultation closes on 26th April)2. The government cannot give certainty on tariff levels to people who install solar panels with an eligibility date between 12th December 2011 and 3rd March 2012 due to ongoing legal proceedings. DECC is appealing to the Supreme Court and has until 21st February to lodge its case.3. The government received a total of 2,392 responses to its 31st October consultation.
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