We would like to alert you to an important quirk in the Feed In Tariff scheme rules which will result in all installations that registered on or before December 31st 2013 receiving an inflation linked increase in the Feed-In Tariff rate they will receive from 1st April 2014.
This means that Solar PV systems installed in November and December 2013 will receive approximately 2.5% more in total Feed-In Tariff payments for the lifetime of the system than systems that are installed from January-March 2014, which won't see their first inflation linked increase until April 2015. (exact rate tbc)
There is also a 3% drop in the Feed-In Tariff scheduled for new installations registered after 1st April 2014.
To maximise the financial returns from your proposed solar PV installation we would strongly recommend an installation before the end of this December if possible.
We are adding additional installation slots for December to cope with increased demand, but our installation slots for November and December are now filing up fast, so we would urge potential customers to please contact us at the earliest opportunity to avoid dissappointment.
Official DECC Guidance
nb These details are correct for sub 50kWp systems, for bigger installations than this, there is a 3% FIT degression from 1st January 2014 rather than April, but the RPI increase information is still the same.]]>
Following weeks of confusion and uncertainty over the period over which DECC was planning to calculate the installation figures for the preceeding 2 month 'quarter', DECC quietly slipped out the quarterly figures on 24th July.
This release shows that DECC is actually using the 3 months of April, May & June to calculate the figures, so the low installation rate in April as much of the country was still under winter conditions, has dragged the quarterly installation figures just under the lowest degression point for all sectors.
This means that there will be no reduction to the Feed-In Tariff rates paid to new installations this autumn as had been widely feared, meaning that the UK solar PV industry can look forward to 5 months of relative stability til the end of the year to build on the growth we've experienced in recent months until the end of the year.
Source = DECC Monthly MCS & Roofit Statistics release 24th July 2013
Solar Feed-In Tariff rate table
for new 0-250kWp solar PV installations registered from 1st July & 31st December 2013 (at the earliest)
|Feed In Tariff band||0-4KWp||4-10kWp||10-50kWp||50-100kWp||100-150kWp||150-250kWp|
Feed In Tariff rate
from 1st July - 31st December 2013
To qualify for Feed-In Tariff payments at this rates all installations must meet the following criteria; have an EPC rating of A-D, or not be connected to a building that has any heating or cooling (eg a barn), be connected to an existing metered supply, be installed and certified by an MCS certified company (up to 50kWp), and the system owner must not already own more than 24 other solar PV systems. Lower rates would apply if any of these criteria aren't met.
Sowing the seeds of confusion
The major cause of confusion and uncertainty over this degression stemmed from the previous quarter being defined as a 2 month quarter (in order to bring the FIT quarters into line with the financial year), and lack of clarity over whether this next quarters FIT degression would be based on the 3 months from April, or only the 2 months that actually formed the 'quarter'.
Had it been based on the latter, then the adjusted figures would have seen a 3.5% cut for both the 0-10 and 10-50kWp FIT bands as the installation rate picked up significantly in May and June.
We would urge DECC and Ofgem to please clarify such sources of confusion in future as early as possible to avoid mixed messages going out to the industry and public.
Onwards towards 3GWp
Leeds Solar hope that this news, along with the apprent resolution of the EU vs China solar PV trade dispute will enable the UK solar industry to get back to what we're best at, and break the 3GWp installed capacity barrier by the end of 2013.
This will be a massive achievement for an industry that was still little more than a cottage industry just 4 years ago.
For our part, Leeds Solar have now taken commercial installation orders for the Autumn that indicate we are on track to beat our 2011 figures for the total capacity installed in 2013, as our partnership with SolarWorld is proving a success.
UK solar bouncing back in 2013]]>
Leeds Solar's analysis of the latest weekly solar PV installation statistics released by DECC clearly demonstrates that there is no possibility that the quarterly installed capacity will reach the cut off threshold needed to trigger a Feed In Tariff cut on 1st May.
Unless the industry is able to install as much capacity in the next week in the snow as we've installed in the last 12 weeks, which seems a tad optimistic.
This means that the Feed In Tariff will definitely stay unchanged until 1st August July.
|Feed In Tariff band||0-4 KWp||4-50 kWp|
|Quarterly solar PV installation capacity required before 3.5% FIT reduction||100,000 kWp||50,000 kWp|
|New solar PV capacity registered this quarter (so far)||48,447 kWp||13,344 kWp|
|Capacity needing to be installed in 10 days in the snow before the end of January for a 3.5% FIT cut to happen||51,554 kWp||36,657 kWp|
Minimum 3.5% Feed In Tariff cut scheduled for August 1st 2013
Due to the rule that states that there can be no more than 9 months without a FIT cut before there is an automatic Feed In Tariff cut of 3.5%, we can now say with certainty that the next FIT cut will be a minimum 3.5% cut across the board from 1st August 2013.
6 months of certainty for the solar industry, and excellent returns for our customers.
Leeds Solar welcomes the 6 months of certainty this now brings the solar industry to allow us to get back to what we do best, and hopefully get the message across to the public that:-
Let's make 2013 the year the solar industry bounced back.
The urgency of the challenge of climate change is too important not to.
The official quarterly Feed In Tariff figures will not be released until mid February 2013, but it's virtually impossible for the industry to install the same amount of solar PV this week in the snow as it's installed in the last 12 weeks, so we're confident to call this now without waiting for official confirmation.
Electricity price rises of 15-20% at least before the winter of 2013 are now virtually guaranteed as the majority of the coal plants scheduled to close in 2016 have actually used up all their remaining hours in 2012-13 prior to the April 2013 carbon tax being imposed, and will now close or switch to 100% biomass in April 2013. This will result in at least a 30-40% reduction in coal generation, which will mostly have to be replaced by significantly more expensive gas generation - with wholesale UK gas prices also rising at over 10% per year due to an 8% per year reduction in North Sea gas output, being replaced by significantly more expensive imported LNG.
From January 2013 the Treasury raised the capital tax allowance to £250,000 for businesses. Government incompetence watchers will be interested to note that this follows a reduction in the capital tax allowance 9 months earlier from £100,000 to £25,000 a year, which almost looks as if the Treasury hasn't got a clue what it's doing... surely not.
Solar panel price rises are suspected to be on the cards for 2013 as the recent over capacity situation in the solar panel market reduces due to huge increases in demand from China, as well as reduced output from some lower tier suppliers mothballing plants, bankruptcies and companies pulling out of the market. Most solar manufacturers have been running at a loss throughout 2012, which isn't going to be a position that can continue long term, so some level of price rises are almost inevitable in our opinion.
The exact wording on DECC's maximum number of quarters of no cuts prior to an automatic cut is as follows
Degression will be skipped if deployment is below a floor threshold (for a maximum of two successive degressions – so there will be a minimum of 3.5% degression every 9 months).
Leeds Solar have used the google trends website to analyse the trend in the number of searches for the term 'solar PV' by google users based in England, and the results are fairly shocking.
Long term trend in Google searches for the term 'solar PV' in England
Note. The current level is shown by the horizontal black line
The number of searches has now fallen to approximately the level it stood at 2 years ago at the very start of the FIT scheme in April 2010.
Last 12 months trend in Google searches for the term 'solar PV' in England
The volume of searches in August 2012 has fallen to around 1/3 of the volume a year ago, and only around 20% of the peak volume that occured shortly after the October FIT cut announcement.
Interest continues to drop off through the year, and now stands at around half the level it was at in March after the first (legal) FIT cut to 21p.
Last 30 days trend in Google searches for the term 'solar PV' in England
We would show you the graph of the volume of searches for the last 30 days, but for the first time since 2009 the volume of searches isn't actually high enough for google to even register them on the trends website.
Analysis & Comment
In order to really understand the magnitude of these figures, it's also important to remember that the number of MCS certified solar PV installation companies is now around 10 times higher than in the Summer of 2010, and 4 x higher than last summer.
It seems clear that as many installers have suspected, this decline in interest must have been masked in the official installation figures by the rent your roof type volume installers who have large sales teams soare better able to overcome reduced levels of interest.
It's our assessment that public confidence in the industry, and the FIT scheme has been seriously damanged over the last 9 months, the blame for which must lie mainly with DECC for 9 months of chaos, confusion and a constant stream of cuts and ill thought through changes to the FIT scheme.
A Wake Up Call to DECC
We hope this analysis acts as a wake up call to DECC, and others representing the industry to stop burying their heads in the sand and pretending everthing's hunky dory.
It isn't, and another cut in 10 weeks time isn't going to help the situation. It's about time that DECC realised that it needs a partnership with the solar industry to actually deliver it's 2020 targets, and it's in severe danger of losing the majority of the trained workforce and experienced installation companies for good over the Autumn and Winter if it continues blindly on with it's current course of action.
We urge DECC to urgently review the consequences of their actions over the last year, and sit down with the industry to jointly agree the best way forward, before ploughing ahead with further cuts and half baked changes.
*Please note, Leeds Solar will be starting work on a contract in September to install 150-200 solar PV systems for a property management agent, which should keep us busy through the Winter, and have several other large contracts in the pipeline, so should survive ourselves. At current installation rates we're seriously concerned about how many companies will survive through the winter.
We hope this blog article might alert DECC to this ticking timebomb of an issue so they can understand more fully the consequences of their actions, as we believe the full consequences for installers in the domestic market are being masked in the official figures.]]>
Having listened carefully to industry, we are looking at scope for pushing back a little the next proposed reduction in the
As per usual, this announcement does nothing to clarify the situation, as the lack of an announcement on Friday 11th May, 40 parliamentary days before 1st July, already meant that we knew that any cuts would have to be delayed a little. We can't help but suspect that this announcement about a slight delay is more likely the result of a cock up at DECC regarding the date they needed to make the announcement on than DECC actually listening to the industry.
We'll keep this website updated with any further news, but the message must be for anyone contemplating installing solar PV before any cuts to get on with it to avoid the inevitable rush once the announcement is made.]]>
30th June 2012 is the next proposed date for further Feed In Tariff cuts;
Book now for pre 30th June installations
The government has proposed a further cut to the Feed In Tariff rates for solar PV from 30th June 2012, with the level of this cut being dependant upon the volume of installations that were registered in March and April.
Our analysis of these installation figures shows that it's likely that these cuts will mean the current 21p/kWh FIT rate for below 4kW solar PV installations could fall to 16.5p/kWh with similar cuts for larger installations.
We're hoping DECC will agree to defer these cuts, but would strongly advise anyone considering having a solar PV installation fitted to request a quote from Leeds Solar as soon as possible to beat the inevitable rush if DECC press ahead with these planned cuts.
The price reductions since last December mean that we're still able to offer excellent rates of return of 8-10% for many systems even at the current 21p FIT rate, so now's the time to get your solar PV system installed in time to catch the best of the summer's sunshine.
Leeds Solar are now taking bookings for May and June installations, please book now to avoid the last minute rush.
Energy Performance Certificate (EPC) arrangements
All solar PV installations now need to have an Energy Performance Certificate (EPC) produced once the solar PV system has been installed that gives a rating of band D or above in order to claim the higher Feed In Tariff rates.
Leeds Solar will supply a provisional EPC assessment as standard with all our solar PV quotes, and also include a full EPC with your MCS certificate once the solar PV installation has been commissioned.
Energy Efficiency Package
If your property doesn't initially meet the band D rating, we will produce a package of low cost energy saving measures for your property to enable it to meet this band D requirement,. These measures will also save you significant amounts of energy and money for many years to come, often with better payback times than the solar PV itself.
These measures are likely to include; loft insulation top up, low energy lighting, improved heating controls, thermostatic radiator valves.
The solar PV installation itself can also usually raise a building's EPC rating up by a band, so virtually all band E properties would be capable of achieving Band D with a solar PV installation and a selection of these additional low cost measures.
If necessary we can arrange for more extensive energy saving work to be carried out such as low cost boiler replacement, cavity wall insulation, internal or external wall insulation or double glazing work, which should be able to bring all but the most energy inefficient listed buildings up to a band D EPC rating.]]>
In the phase 2a consultation document DECC laid out their plans for a further cut in the Feed In Tariff rate from 1st July 2012, with the level of that cut being based upon the capacity of solar PV with eligibility dates in 4th March to end of April 2012.
DECC gave 3 bands for the installation rates in that period that would lead to different FIT reductions as follows;
Option A = over 200MW installed,
Option B = 150-200MW installed,
Option C = under 150MW installed
Proposed Feed In Tariff rates for Solar PV from July 1st 2012
|FIT rates in p / kWh||4kW||4-10kW||10-50kW||50-150kW||150-250kW||250kW-5MW||
Analysis of the March-April PV installation figures
Our analysis of the latest Solar PV installation figures up to 29th April (from 3rd March) shows that the capacity of solar PV registered with MCS between 1st March-29th April is almost certain to be in the below 150MW range, resulting in the FIT rates given for Option C in the table above if DECC go ahead with their plans as stated in the consultation document.
Given the massive reduction in the installation rate since the start of April, with less installations registered in the entire month than were being registered per day in the week before the 3rd March deadline we can only join the urgent call from Our Solar Future for DECC to urgently reconsider their position, and either delay or scrap their planned 30th June cuts.
We believe that the solar industry is viable now with the current FIT rates, once the impact of the EPC requirements and the negative perception surrounding the reduced rates dies down, but the industry needs time to get back on our feet after the chaos of the last few months.
We particularly need time to adapt to the new EPC requirements, which considerably add to the time and costs required for many installations that need additional energy efficiency work carried out, as well as the lost work involved in quotes for buildings that simply can't meet the EPC D requirements.
We accept that further cuts could be justified in the future, but not until October at the earliest.
This is particularly the case now that the Renewable Heat Incentive (RHI) has been delayed until the Spring, as we and many others in the industry had been relying on the previously planned Autumn launch of RHI to provide a boost to that side of our business to reduce the impact of any FIT cuts on the business as a whole. This is a factor that the industry wasn't aware of when responding to the consultation about the FIT cuts as the RHI delay wasn't announced until the end of the consultation period.
What can you do to help?
We would urge everyone who agrees with this position to write to their MP, and DECC, as well as signing the letter issued by Our Solar Future at the links below
Write to your MP : http://www.writetothem.com/
Sign Our Solar Future's letter to the Prime Minster >here
note - a previous version of this post wrongly included the figures for 1-3rd March, which would have taken these figures into the rage for Option B. We now understand that these figures are not to be taken into account by DECC according to the terms in the consultancy document.]]>
Leeds Solar have reproduced it in 2 parts. This is part 2, part 1 is available at this link
Please note that as DECCs actions have currently been found to have been illegal by 2 of the highest courts in the UK, we're publishing this for information purposes only, but recommend that anything DECC say here be treated with caution as it is likely to be heavily spun. We will attempt to analyse this and respond asap.
BRIEFING ON OUTCOME OF FITS JR APPEAL
The Government has lost its appeal on the FITs JR.
This means that as the law currently stands, we cannot legislate to apply new tariffs, from 1 April 2012, to installations which became eligible for FITs on or after 12 December 2011.
The decision doesn’t affect our announcement last week of new lower tariffswhich, subject to parliamentary clearance, will apply to new installations that become eligible for FITs on or after 3 March. Nor does it preclude us from taking forward other proposals from the FITs consultation (e.g. new energy efficiency requirement).
We respectfully disagree with the judgment and are seeking permission to appeal to the Supreme Court.
The Court of Appeal hasn’t granted permission for a further appeal, so we are seeking permission directly from the Supreme Court. We have 28 days from the Court of Appeal’s decision in which to do this.
This means that the reference date proposal isn’t completely off the table. If our appeal were successful, we could legislate in future to apply new tariffs to installations that became eligible for FITs from a December 2011 reference date.
There are a number of reasons for our decision to pursue a further appeal. Key is the fact that the current tariffs for solar PV are not sustainable. We estimate that the additional cost to consumers of the current high tariffs continuing to be available until 2 March (for the next 25 years) would be around £1.5bn (real, discounted).
The Government wants as many people as possible to be able to benefit from FITs. For every one installation that can be afforded at the current 43.3p/kWh tariff, two could be supported at the new 21p/kWh rate.
(nb Leeds Solar think DECC left this bit in by accident relating to their media strategy)
Policy Handling: Contingency plan already in place with licence modifications laid before Parliament. Subject to the Parliamentary process, new tariffs due to come into force from 1 April 2012 in respect of installations with an eligibility date on or after 3 March 2012. Seek permission to appeal to the Supreme Court.
Line to take: “The Court of Appeal has upheld the High Court ruling on FITs albeit on different grounds. We respectfully disagree with the judgment and are seekingpermission to appeal to the Supreme Court.”
Media Handling: Greg Barker statement on the DECC website. Greg Barker to accept media bids received
Q AND As
What does the judgement mean?
The Court of Appeal has upheld the High Court’s ruling that the “reference date” approach to implementing new tariffs is unlawful.
We respectfully disagree with the Court’s judgment and are seekingpermission to appeal to the Supreme Court.
·We will not know the outcome of this appeal in time to apply new tariffs to electricity generated from 1 April.
Will DECC appeal against the Court of Appeal’s decision?
Yes. We are seeking permission to appeal to the Supreme Court.
We have 28 days from the Court of Appeal’s decision in which to seek permission.
Why are you appealing the Court’s decision? Can’t you just admit you were wrong and draw a line under it?
We respectfully disagree with the Court’s decision.
The fact remains that the current high tariffs for solar PV are not sustainable. The longer they continue, the greater the impact on the FITs budget which is funded by consumers through their energy bills.
Would you consider closing the scheme?
We have no current plans to close the scheme but cannot rule out any option at this stage.
Whatever happens, the fact remains that the current high tariffs for solar PV –paid for by consumers - are unsustainable.
Does this mean that the current tariff rates continue unabated?
In any scenario we have already laid draft licence modifications which, subject to Parliamentary approval, will reduce the tariffs from 1 April for installations with an eligibility date on or after 3 March 2012.
We are planning to appeal to the Supreme Court against this decision.
We will not know the outcome of this appeal in time to apply new tariffs to electricity generated from 1 April. However, if our appeal to the Supreme Court were successful we would have the option of applying new, lower tariffs to electricity generated from a later date.
What does this mean if I installed between 12 December and 2 March – do I get 43p for 25 years?
We cannot guarantee this at this stage.
We are seeking permission from the Supreme Court to appeal against the Court of Appeal’s decision.
Pending the outcome of that appeal, we cannot provide any certainty to generators with an eligibility date between 12 December and 2 March as to whether they would be eligible for the current tariffs for 25 years.
If our appeal to the Supreme Court were successful we would have the option of applying new, lower tariffs to electricity generated from a later date.
When will you publish the government response to the consultation?
The consultation closed on 23 December 2011 and over 2,000 consultation responses were received which we have been analysing carefully.
Last week we published the response to the question on reducing the tariffs and have laid licence modifications in Parliament which, subject to the parliamentary process, will bring new tariffs into force from 1 April in respect of installations with an eligibility date on or after 3 March 2012.
We are intending to announce the outcome of the rest of the consultation(including the proposals on energy efficiency and multi-installation tariff rates)by 9 February 2012, in time for any resulting legislative changes to come into effect from 1 April 2012.
Our aim is that this announcement will be accompanied by a set of reform proposals for the next phase of the comprehensive review of the FITs scheme, which will be the subject of a further consultation.
What about after April – there's no certainty, is there?
The full phase 1 decision document, combined with the consultation proposals for phase 2, should provide greater clarity on the future of PV tariffs beyond 1 April 2012.
GENERAL Q AND As
What regulations did you lay last week?
DECC has laid before Parliament draft licence modifications which, subject to the Parliamentary process set out in the Energy Act 2008, makes provision for a reduced tariff rate (from 1 April 2012 onwards) for new solar PV installations with an eligibility date on or after 3 March 2012 under the Feed-in Tariffs scheme (FITs).
Further information on the Government’s response to this aspect of the FITs consultation, together with a summary of the relevant consultation responses, has been published on the Department of Energy and Climate Change’s website.
Why did you take this action?
We needed to act as quickly as possible. It was not clear when we would get the judgement from the Court of Appeal, so we are acted to protect consumer bills and to avoid bust in the industry and the budget.
Was too important for us to sit and do nothing while we waited for the judgment.
We put in place a contingency that will bring a 21p rate into effect from April for installations with eligibility dates on or after 3 March to put us in a better position to protect the budget for everyone involved.
What evidence have you got that you should reduce it to 21p from 1 April for those with an eligibility date on or after 3rd March? How can you do this without publishing the government response?
We have published a government response to the relevant question (Q1) from the consultation document – this is available on our website.
Many respondents to the consultation agree that tariffs need to be reduced
We will publish the full government response to the rest of the consultation alongside our final decisions on the whole package
What did Greg Barker say about the contingency regulations?
Energy and Climate Change Minister Greg Barker said: “I know this is a difficult time for the sector and I want to do as much as I can to end the current uncertainty created by the legal challenge. We must reduce the level of FITs for solar panels as quickly as possible, to protect consumer bills and to avoid bust in the whole Feed-in Tariffs budget.
We’re appealing against the court ruling that’s challenged our proposal for a December reference date. This remains our aim, and we are waiting for the judgment of the Court of Appeal. But this is too important for us to sit and do nothing while we wait.
Today we’re putting in place a contingency that will bring a 21p rate into effect from April for installations from 3 March. However, we are still pressing ahead with our appeal and if successful, we retain the option of introducing a December reference date. In the circumstances we believe this gives the industry as much certainty as is possible. And it puts us in a better position to protect the budget for everyone involved.”
What are the latest figures of budget against spend under FITs?
The figures change day by day as new installations are registered, but the total budgetary impact is impossible to determine as we don’t yet know if we will have to pay 43p for the next 25 years for all installations between 12 December and 1 April, nor how many of these installations there will be.
We’re fighting to keep the FITs scheme open for all.
Haven’t you already overspent the budget?
The FITs budget is under a lot of pressure. The latest comparison of estimated expenditure and the budget is available in the answer to supplementary question four from the select committee and is available here http://www.publications.parliament.uk/pa/cm201012/cmselect/cmenvaud/1605/1605we13.htm]]>
Leeds Solar have reproduced it in 2 parts. This is part 1, part 2 is available at this link
DECC briefing on the Feed In Tariff Appeal 26/01/12 part 1
GB Feed in Tariffs Scheme | Key Facts
By mid January, there were nearly 210,000 PV installations with a capacity of 840MW - a total capacity that is far more than we originally projected under the scheme.
OFGEM reports another 36MW of large-scale in pipeline.
More small scale PV capacity (380MW) installed in the 6 weeks between launch of the FITs consultation and the proposed reference date (12 December) than in the whole of the year before then (310 MW).
Rates of return have doubled – 5% to 10%
PV costs have fallen at least 30% since April 2010
Electricity prices have risen 13%
Each week at mid-November installation rates and tariffs costs £275m (over 25 yrs)
On latest data, doing nothing would add £40p/a in 2020 to domestic electricity bill (was £26 in IA)
Not doing the Fast Track review on large-scale would have added additional £10 to consumer bills in 2020
GB Feed in Tariffs Scheme | Current consultation proposals
Cost to consumers by 2014-15: £250m-£280m, £2.60-£2.80p/a on average domestic electricity bill.
Could be higher given recent installation rates – £320m-£360m in 2014/15, or £3.30-£3.60p/a on bills
Typical domestic installation could still earn around £500p/a plus £190 bill savings.
Waiting until 1 April 2012 to make changes would lead to additional costs of:- £60m p/a in 2014/15, adding 80p to bills (Impact Assessment)
Given recent installation rates, could add £160-£170m p/a in 2014/15, or £1.60-£1.80 to bills]]>
*10.12.2012 - UPDATE*
*Please note this is an old blog post from the start of 2012, but seems to be getting a lot of hits still - the information is now a year out of date, please ignore it*
DECC have announced their plan B for the Feed In Tariff scheme if, as seems likely, they lose their current High Court appeal against the ruling before Christmas that the original 12th December cut off date for the 43.3p FIT rate for solar PV to be changed to 21p was illegal.
A brief overview of the situation as Leeds Solar see it
As we predicted, the government lost it's appeal in the High Court, however the Government has since announced it's intention to appeal again to the Supreme Court. The Supreme Court have stated that they are unlikely to be able to rule on this appeal for several months, certainly not until after 3rd March.
This basically means that nobody can currently be sure what rate will finally be applied to installations commissioned between 12th Dec and 3rd March, other than that the 2 possibilities are 21p or 43.3p (for under 4kWp systems).
Leeds Solar are therefore advising all our customers and potential customers to only go ahead with an installation if they would be happy with the returns at the 21p rate, and to view the potential for their installation being eligible for 43.3p as being a bonus that may or may not happen.
We had already cut our prices by 20-25% since December prior to this confusion to ensure our customers could look forward to good rates of returns on their investments even at the new 21p FIT rate, so an installation now makes good economic sense regardless of the eventual outcome of this court case.
The announcement means that if the High Court rules that the 12th December cut off date was illegal, then a new cut off date of 3rd March 2012 will apply instead.
If this happens, it would mean that any domestic installations completed and registered before 3rd March would be eligible for the old 43.3p per kWh FIT rate for the 25 year lifetime of the FIT payments.
Installations after 3rd March would then be eligible for the reduced 21p FIT rate, although it's likely this will then be cut again from 1st April, when additional energy efficiency requirements are also likely to apply.
The High court hasn't yet made its decision, and may yet agree with the government, in which case the cut off date would revert to the 12th December 2011 and any installations registered after 12th December would be eligible for the 21p FIT rate.
Due to the major solar PV price drops that have continued since DECC's original announcement in October, this means that solar PV systems installed by Leeds Solar between now and 3rd March will either result in returns on investment of around 7-10% at the 21p FIT rate we've based our quotes on, or returns of 15- 20% for most installations if the 43.3p rate is applied.
How likely is it that the High Court would rule against the Government and the new 3rd March date would apply?
Fairly likely in our opinion. The Judge in the original trial advised the government that any appeal stood little chance of success, although there is always a chance that the High Court will view things differently.
Is there any chance of the Government cutting the FIT rate further than 21p if they win the court case?
No. At least there's no chance that the Government can cut the rate further before 1st April, and DECC have confirmed this both in their statement today, and in earlier statements. It would also be entirely illegal if they tried it.
What is likely to happen from 1st April?
We anticipate that the Government will add some form of energy efficiency requirements to the FIT scheme for Solar PV as suggested in the consultation document. This would make it harder for many houses to get the highest rate of FITs if they don't meet the energy efficiency requirements. However, they will still be eligible for the lower FIT rate, and our analysis shows that this could still be a viable option in some circumstances.
We also think it's likely that there will be further reductions to the Feed In Tariff rates as DECC reacts to the significant reductions in the cost of solar PV installations since December and tries to manage the Feed In Tariff budget overspend.
We think it's quite likely that DECC will be able to apply the 8% cut that was originally planned for 1st April on top of the cut to 21p without needing to conduct further consultation, or notify parliament of this change, as it is already built into the original legislation. Even if we're wrong about this, it's almost certain that there will be a further cut over the next few months.
What would Leeds Solar advise people to do?
We'd strongly advise anyone who's already received a quote from us to contact us as soon as possible to book an installation slot before the 3rd March without waiting for the court decision. Anyone who's not already had a quote from us should fill in their details on our request a quote section as soon as possible. We will produce you a quote as soon as we can, and will probably be able to fit some additonal installations in during this period.
If you decide to go ahead before 3rd March, the worst case scenario will be that you end up with the rates of return which we've quoted, which are mostly in the 7-10% range, with the possibility of this rate of return increasing to something in the region of 15-20% if the High Court rules against the Government.
Can Leeds Solar guarantee to complete and register our installation before 3rd March?
In short, yes. If we confirm that we accept your installation for a pre 3rd March installation date, then we guarantee that it will be installed and registered before that date.
In the period before 12th December deadline, Leeds Solar completed and registered all our contracted installations with 3 days to spare. We have an experienced dedicated office team to process all the paperwork required, and if needed can have 3 experienced installation teams working at once. We also have a warehouse big enough to store as much equipment as might be needed, and have already stocked up on much of the equipment that was in short supply in December in anticipation that this announcement could be made.
As of 20th January, we currently have plenty of spare installation capacity in February, but anticipate that this will fill up rapidly once news of this announcement spreads, so would encourage anyone who wants a slot to get in touch as soon as possible. We will attempt to update this page as our installation slots fill up.
What are all the planned new rates?
|FIT Band||Current FIT Rate||New FIT rate|
Isn't there something about installations being eligible for 43.3p until April?
Confusingly, yes. Any systems installed after 3rd March are still going to be eligible for payments of 43.3p per kWh until 1st April, but literally only until 1st April, after which they will only be eligible for the 21p rate.
Where can I get more information about the announcement?
DECC's announcement on it's website
DECC's written parliamentary statement
Decc's official response to the consultation on the FIT changes (question 1 only)]]>
DECC have sneaked out an increase to the FITs budget spending envelope, by taking the money from the ROCs budget spending envelope, then claiming that it's neither an increase in the FIT budget spending envelope or a decrease in the ROC budget spending envelope despite the FIT budget going up, and the ROC budget* going down. This is because the ROC budget apparently always included money that was intended to have been in the FIT budget but they'd left it in the ROC budget because the dog ate it.
I say 'sneaked out' because they made no announcement about it, simply tucked the change away in a table and explanation note in the catchily titled 'Control Framework for DECC levyfunded spending Questions and Answers' released on the fuel poverty section of their website on the 8th December... a date when the entire industry was a wee bit busy to notice.
To be honest, we can't help but be impressed with this ingenius slight of hand, that at least means the FIT's scheme should stay within new budget for this year anyway. It gives us some hope that maybe DECC do have a reasonable handle on the figures and potentially could be able to find some extra envelope of the spending kind for FITs in the coming years.
Comparison of Previous and New FIT & ROC's Budget
|New Feed In Tariff budget||94||196||328||446||1064|
|Old Feed In Tariff budget||80||161||269||357||867|
|New Renewables Obligation budget||1750||2156||2556||3114||9576|
|Old Renewables Obligation budget||1764||2191||2615||3203||9773|
*figures in £million
While this is welcome news, unfortunately our calculations show that the FIT scheme is still going to be over budget by at least £75 million in 2012/13 just from the Solar PV installations registered by 18th December, but this is at least an improvement over the previous £161 million figure for the already committed overspend.
We can only hope that this is an indication that DECC are giving serious consideration to these budget figures, and will find a way to increase them in order to enable solar PV to continue to be installed at at least the rate it was in the last few months of 2011 (500MWp in 4 months, equatings to a rate of 1.5GWp per year).
In return, we as installers expect and would accept further cuts to the FIT rate in April and September as justified by the ongoing reductions in the panel and equipment costs. We recognise that FIT's purpose was both to stimulate the market for PV, and drive the costs down towards grid parity, and are happy to work in partnership with DECC to achieve both aims.
DECC's explanation of the budget changes in full...
Technical note on Levies Budgets
The spending limit for the Feed in Tariffs (FITs) scheme as originally published (and set out in the table below) referred to additional expenditure on installations of less than 5MW over and above the baseline of installations that would have happened anyway (because some installations would have come forward under the Renewables Obligation (RO)). We have now incorporated that baseline into the spending limit for FITs so that it is clear what the totalspending limit is for FITs and the RO. This technical adjustment to the published spending limits merely provides a more accurate picture of the money that was always available for installations above 5MW and for installations below 5 MW. We have not made more subsidy available for FITs or less for the RO
>Link to full document<
*we got bored. if it walks like a duck, quacks like a duck, swims like a duck, flies like a duck, we reckon it actually ought to be called a duck, or in this case a budget.]]>
Analysis of UK Installed Solar PV Capacity as of 21/12/2011, and the total payments due for this installed capacity alone in 2012-13
|Installed Capacity||FIT rate||Annual Generation||Annual FIT Payments|
|Standalone >Aug 2011||1.4||0.085||1,111||£0.1|
The Total Feed In Tariff budget for 2012-13 is currently set at £161 million, so with £270.5 million of payments already due for just the solar PV systems installed up to this point the Feed In Tariff scheme looks set to be £109.5 million over budget in 2012-13 based on the current installed capacity alone.
We estimate that the solar PV industry should add at least the same capacity of solar PV in 2012 as it has in 2011 even with the planned FIT rate cuts, which means that the FIT budget for 2012 looks set to be at least double the level the treasury capped the FIT scheme at for 2012-13. This is without taking into account other micro renewables such as wind, hydro etc.
We therefore call on the government to urgently review not only the FIT rate (as it is doing), but also the actual cap that the treasury imposed on the scheme last year. It's clear that there is no possibility of the FIT scheme staying within these spending limit, and the government must now face reality and increase those limits.
If the limits are increased, Leeds Solar and the rest of the industry don't have a problem with ongoing FIT rate reductions to reflect the cost reductions occuring within the industry, but we can only cope with this if we can continue to benefit from economies of scale that can only happen if the industry is allowed to continue to expand.
It's time for this government to make a decision, as the greenest government ever, are you going to be responsible for throttling the solar PV industry at birth, and in so doing ensuring that the cost of PV remains high, or supporting its ongoing growth while driving costs down?
If the government chooses the 2nd option, then at the rate of installations we've seen in the last 4 months we could easily see 15-20GWp of solar PV installed by 2020 in the UK, and if the level of cost reductions are allowed to continue then there's no reason why solar PV can't become cost competitive with wind, nuclear and even fossil fuels well before then (given the rate that fossil fuel prices are increasing, and North Sea production is reducing)
The figures in the table above are taken from the·weekly update for MCS registered installations for 18/12/2011,·combined with the November update for FIT registered installations.
Note that the·weekly figures are only for MCS certified systems, which are only up to 50kWp systems. The monthly FIT registered figures are used to provide the figures for over 50kWp systems. As it takes some time for the FIT registration process to take place, in reality even these figures are certain to be at least a slight under estimate.
solar panels Leeds]]>