DECC launch FIT review

[SRE]

I hear that A Shade Greener has put its Head Office staff on 30 days notice. Unconfirmed report from an insider.

Installation teams currently unaffected but their time will probably come. Not the nicest surprise with Xmas on the horizon.

I understand they do 300+ installations a week....

I certainly saw no sympathy at all on PMQs today, we've been hit with stamp duty today as landlords and I'm expecting to be hit with EV too in light of the transport cuts. We seem to be hit whichever way we turn at the minute!

 

[SRE]

From our accountant - haven't heard it mentioned today but this is apparently from today's review. I suppose it was inevitable but not great timing is it?

"As a result of the recent EU court ruling that confirmed that the current reduced rate of VATbeing applied to energy saving materials in the UK does not comply with EU legislation, it hasbeen confirmed that the government will consult on legislation for Finance Bill 2016.It appears inevitable that the rate of VAT applicable to energy saving materials will increase tothe standard rate of VAT, bringing the UK’s treatment in line with the rest of the EU."

 

[Worcester]

Also this published today : https://www.ofgem.gov.uk/publications-and-updates/feed-tariff-fit-quarterly-report-issue-22

 

[The Solar King]

Ref VAT. What the Autumn Statement actually says on page 121 is:

3.64 VAT reduced rate for energy saving materials
– The government will consult on legislation for Finance Bill 2016 to ensure the reduced rate of VAT on energy saving materials is maintained in line with EU law. (Finance Bill 2016).

This is somewhat ambiguous but suggests they are looking at ways of maintaining the 5% rate.

 

[SRE]

Ref VAT. What the Autumn Statement actually says on page 121 is:

3.64 VAT reduced rate for energy saving materials
– The government will consult on legislation for Finance Bill 2016 to ensure the reduced rate of VAT on energy saving materials is maintained in line with EU law. (Finance Bill 2016).

This is somewhat ambiguous but suggests they are looking at ways of maintaining the 5% rate.

Never trust an accountant ;-)

 

[Worcester]

I don;t hold out much hope for a significant change from the consultation, Doemstic RHI has just been cut by £700m, DECC's budget cut by 22%, there is no way to find any more money...

I think they'll delay it a few weeks, and then make up a political spin re energy bills, fracking, gas generation (vs Coal) and close the smaller FiT bands.

See here: 7 questions George Osborne didn't answer in his Spending Review


Full Details: https://www.gov.uk/government/uploa...749/52229_Blue_Book_PU1865_Web_Accessible.pdf

 

[Gavin A]

RHI funding is directly within DECCs budget, FITs only nominally.

Best hope for FITs I think is if the treasury / OBR can be persuaded to take account of the merit order impact on wholesale prices when determining what classifies as being the net impact of renewables on energy bills rather than just taking the simple direct spending on the schemes.

 

[The Solar King]

Expect an announcement on Wednesday 16th. Best information is decision was taken a couple of weeks ago.

 

[SRE]

Any theory about what it's likely to say??

 

[Gavin A]

Thanks for the update, so it'll take effect from something like 24th Feb?

 

[The Solar King]

Any theory about what it's likely to say??

I feel it would be unhelpful to add to rumours and speculation at this stage.

The STA met with George Osborne's special advisor Neil O'Brien in a move to influence HM Treasury's thinking on solar, as it is understood they are calling the shots regarding the FIT review. He was briefed on solar, the LCF and pitched on the £1 emergency solar rescue plan.

Last week, the House of Commons held its regular Treasury question time where Seema Malhotra MP attacked Osborne on solar followed by a similarly terse exchange with Helen Goodman MP in the Treasury Select Committee. This much-needed pressure helps put the solar FIT on Osborne's radar.

As always, there can be little trust in what one is told or how one is received. Apparently Rudd did not want to meet renewable lobbyists due to her own discomforture at the position she found herself in. This then throws a different light on any discussions that have taken place with officials. This observation came in a personal conversation had with a highly respected independent industry commentator. His analysis is very sharp.

There may be some concessions, but as always there could be a sting in the tail. Do not forget the details included in the Consultation such as the Energy Performance requirement. A workable tariff with unworkable conditions is of little use to anyone.

The dissonance of the Governments position on renewables in relation to statements made in Paris at COP21 are well reported, as are comments from industry leaders (eg Unilever). Whether this has an influence or not remains to be seen.

I suspect that many of us will be wondering on Wednesday whether what is announced is enough to continue in the industry or change tack. What ever happens it will become a very different place.

 

[Worcester]

I suspect that many of us will be wondering on Wednesday whether what is announced is enough to continue in the industry or change tack. What ever happens it will become a very different place.

i.e whatever the announcement a lot of businesses are going to have to change tack, it's not going to be business as usual - see also my other new thread / post

 

[TedM]

Thanks for the update, so it'll take effect from something like 24th Feb?

11th Feb, according to my calcs, if they follow the 40 day rule.

 

[The Solar King]

God forbid they introduce a pause to FITs, as this would be 21 days (calendar).

 

[Gavin A]

11th Feb, according to my calcs, if they follow the 40 day rule.

ah yes, if the dates for the start and end of the recess are included then it lands just before the feb recess period, so that'd make sense for why they'd do it that day.