DECC launch FIT review

[SolarCity]

"In my view this should be a wakeup call for the industry to start working on business models where we don’t rely on subsidies any longer."

This was the response from BPVA. What a poxy organisation they are. How do they suppose I respond to this wake up call? Work without scaffold? Tell my employees to work for free? Persuade suppliers to offer me free materials.

 

[Worcester]

"In my view this should be a wakeup call for the industry to start working on business models where we don’t rely on subsidies any longer."

This was the response from BPVA. What a poxy organisation they are. How do they suppose I respond to this wake up call? Work without scaffold? Tell my employees to work for free? Persuade suppliers to offer me free materials.

We're back to big business again, - it goes back to my post (seems like forever ago, was probably yesterday ) about the drivers.

Government will hit the big consumers harder and force them to invest in renewables - like the 2MW Bentley rooftop. BPVA will be pushing the massive installations carried out by a very few companies that use cheap subcontract overseas labour rather that the thousands (still 2653) MCS Solar PV installers that exist in the <50 kW market place and I'll bet 95% of those are in the <10kW

The BPVA is only interested in working with big business, and that model with the carbon penalties that will come to the big consumers will install PV / wind etc even without subsidies - they'll have no choice.

The BPVA was only feathering it's own nest to ingratiate itself with Government, it doesn't care a **** about the FiT market place. It's comments were very calculated.

 

[SibertSolar]

Spot on Gordon....

 

[Worcester]

Here's the official document:
The Feed-in Tariffs (Amendment) (No. 3) Order 2015
The Feed-in Tariffs (Amendment) (No. 3) Order 2015

 

[TedM]

Which I see was laid before Parliament today (when Parliament is not sitting) rather than yesterday.

Also I see:

Part 3 (accreditation and matters relating to accreditation)

4. For article 4 (application of this Chapter) substitute—

“4.—(1) This Chapter applies where an application has been made which meets the conditions in paragraph (2) or (3).

(3) The conditions in this paragraph are that—

(a)an application has been made to a FIT licensee for FIT payments for an eligible installation which uses an MCS-FIT technology;

(b)the FIT licensee has submitted details of the installation to the Authority for accreditation under the process for MCS-certified registration; and

(c)not less than two weeks have passed since the date on which the installation’s MCS certificate was issued.”.

So after the installation the new owner has to wait 2 weeks before being able to apply for a FiT contract (or it has to sit in a supplier's in-tray for 2 weeks) and they have to wait for the supplier to lodge it on OFGEM's database.

 

[Worcester]

Which I see was laid before Parliament today (when Parliament is not sitting) rather than yesterday.
Also I see:
So after the installation the new owner has to wait 2 weeks before being able to apply for a FiT contract (or it has to sit in a supplier's in-tray for 2 weeks) and they have to wait for the supplier to lodge it on OFGEM's database.

Meaning the cut off date is effectively two weeks earlier.. so tariff drop on 1st April, means system has to have been commissioned at least 14 days earlier (17th March latest)
.
Interesting it refers to "the date on which the installation’s MCS certificate was issued" and not the commissioning date - yet ANOTHER time date trap to fall into.

Have they added these dates as definitions What if the MCS database is down? They have already threatened to close it for a period in March to cope all the changes need for the new ErP regs.

I suppose it stops some not so scrupulous installers from registering the systems in the last 4-14 days before a drop and predating the commissioning; you can register a system on the MCS database up to 10 days after commissioning.

 

[TedM]

Still trying to get to the bottom of some of the changes that have been sneaked in.

But it looks like the deployment quarter that sets the tariff for the subsequent quarter is now abutted directly to those 3 months instead of having the 2 month gap we have at the moment. OFGEM have to publish the new rates for a tariff period within the first 5 working days of that period.

So until those new rates are published you are not going to know exactly what the tariff will be.

 

[solarsavings]

I wonder what RECC's guidance on selling this new feed in tariff arrangement is going to be.

 

[Worcester]

That'll be one of the reasons for the two week processing time / delay.... effectively gives them 3 weeks to get the data together.

Depends whether Ofgem use the MCS database or FiT database for their calcs. Probably the MCS database because any MCS registered system, even if they don't immediately, could apply for it at a later date.

TedM a good one for you:

The new QUARTERLY caps are set at the average MONTHLY installation rate acheived between January and July last year (2015), so that's cutting it by 2/3rds..

What happens if either the quarters deployment , or two quarters worth is registered / logged during a pause? Will people have to wait 6 months to see if they get anything?

---------
DECC have assumed an average installation size of 3.15kWp (MW / # of Installations)

Anyone done the math yet on the cheapest (non MCS compliant) 3kW system that you can install, and say in 18 months time you can add storage in, does it add up without FiT?

 

[solarsavings]

Can they force us to only install mcs compliant kit?

 

[Worcester]

One to check out:
https://www.ofgem.gov.uk/ofgem-publications/98179/draftguidanceonpausingthefitsscheme-pdf
Draft Guidance on Pausing the FITs scheme
Feed-in Tariffs: Commissioned Guide
https://www.ofgem.gov.uk/ofgem-publications/98155/fitcommissionedguide-pdf

Both published on the 16th..

all from here:
https://www.ofgem.gov.uk/environmental-programmes/feed-tariff-fit-scheme

and another:
Draft MCS Deployment Caps FAQ
https://www.ofgem.gov.uk/publications-and-updates/draft-mcs-deployment-caps-faq

 

[TedM]

There is a nasty 'gotcha' hidden in one of those docs:

Transitional MCS installations
1.11. Installations which have MCS issue dates and commissioning dates before 15 January 2016 but which apply to their FIT licensee on or after this date will not count towards deployment caps. These installations must apply to their licensee before 1 April 2016 or they will not be able to receive FIT payments.

1.12. The “eligibility date” and “tariff date” of these transitional MCS installations will be 8 February 2016.

So someone with an install that is commissioned on the 14th January is going to have to get their FiT application in on the same day or lose out in a big way.

 

[SolarCity]

Are all these changes coming in on 15th Jan?

Or are things like pre-accreditation implemented now? Being able to do that would save a lot of stress for my current customer.

 

[Worcester]

Warning: The MCS database will crash / freeze on the 14th as everyone tries to register them on the same day.
The new concept of the date that the system is registered on the MCS database is one to watch out for, along with the EPC date.

 

[TedM]

Are all these changes coming in on 15th Jan?

Or are things like pre-accreditation implemented now? Being able to do that would save a lot of stress for my current customer.

Normal preliminary accreditation (only available for DNC > 50kW PV, not an extension) is closed and doesn't open again until 8th February.

For a qualifying "community organisation" (only available for a DNC < 50kW PV, not an extension) you can apply before 15th January for pre-registration and the eligibility date will be the later of:
- the date that OFGEM received the pre-registration application
- the date the system is commissioned
and the tariff date will be that same date.

 

[SolarCity]

Thanks Ted.

 

[The Solar King]

Had occasion to speak to the MCS help desk today. Be aware Ofgem are planning quite a number of audits on FIT submissions toward the end of the qualification period to ensure there is no cheating/fraud - paperwork completed but systems not etc. It maybe the householder they go after as it will be easier to trip them up.

 

[Gavin A]

odd that Ofgem have time to do that when they're now 10 months behind processing the paperwork for one of our commercial PV installations.

 

[Somecamel]

They won't be doing this themselves.

I remember talking to our MCS assessor (NAPIT) after the last big rush (2011/12?) and he was telling me that they were trying to get their assessors out there to go and check installs.

I think he refused but I do remember him telling me that one of his colleagues had agreed to do it and he literally got chased off a job that had already been signed off with the install guys on site when he sprung himself on them!!

 

[whinmoor]

Anyone got any hope of a last ditch rescue by Corbyn or Baroness Featherstone? (who!?!):

Labour leader Jeremy Corbyn and Lib Dem peer bid to block feed-in tariff cuts | Solar Power Portal

 

[Somecamel]

The EDM seems pretty weak Early day motion 912 - ELECTRICITY - UK Parliament

Just asking for it to be annulled without any reasoning screams lip service to me.

I've had a flood of commercial enquiries this last week where FITS doesn't really matter but if I'm honest, I've had enough.

I don't know about you guys but I'm kinda looking forward to this 4 week break

 

[SRE]

We fitted our last full system before Christmas and I've got to say I'm pleased to see the back of it. I really hope it works out for you guys but I'm sick of playing by the rules while watching idiots install in gale force winds and rain with no scaffolding, rubbish kit and shoddy installations making more money than us.

We'll really struggle with EPC ratings and domestic rate fit and we're just not geared up for commercial or have any intention of doing so. We have one inverter on a new build to get in before next week and that's us. I'll be keeping an eye on you though ;-)

 

[Gavin A]

frankly I think the sooner we get this over with the better, so far the press coverage has been minimal due to announcement being just before christmas, and we can make the figures stack up with the current FIT levels. Unless there's a late flurry of negative woe is us press coverage, I'm hoping we can avoid the massive irrational drop off of enquiries that happened last time and hit the ground running.

I'm intenting to do a newsletter to send out to all previous customers and inquiries basically highlighting the positives of the situation, to spread the word that solar is still viable and has never been more affordable, and use the quarterly cuts to encourage rapid turnaround from quote to install.

EPC issue could be an opportunity to sell add on energy efficiency measures that probably have better paybacks than PV.

Onward and upward... we all knew the end game was to end up subsidy free, so best we get on with it really.

That being said, I am putting feelers out for a legal challenge to the quarterly caps mechanism, which IMO have been implemented illegally as they restrict the uptake of SSEG's rather than encouraging it, and the energy act 2008 only gives powers to administer FITs scheme to encourage SSEG uptake via SIs, would need full act of parliament to legally change it to restrict uptake in this way not and SI.

 

[Gavin A]

The EDM seems pretty weak Early day motion 912 - ELECTRICITY - UK Parliament

Just asking for it to be annulled without any reasoning screams lip service to me.

I've had a flood of commercial enquiries this last week where FITS doesn't really matter but if I'm honest, I've had enough.

I don't know about you guys but I'm kinda looking forward to this 4 week break

6 signatures?

6?

Is that really the best that Corbyn can manage?

 

[Gavin A]

right, that's all Leeds MPs hit up on twitter to sign that EDM.

If everyone else did their local MPs as well, we could get some momentum going behind that EDM, and at least get it debated in Parliament.

 

[Gavin A]

did I really just hear Leonie Green on the news saying that pv would now have a 13 year payback?

That's really not the message we need to be getting out there, what needs to be being said is that for high daytime energy users it's still very viable with 8-10 year paybacks possible due to the reduced pricing.

Are STA still using the flawed financial model that doesn't include any allowance for RPI / energy price rises?

 

[whinmoor]

Sorry to break up your monologue, Gavin!

BBC report about likely local impact: Yorkshire and Humber solar jobs threat over subsidy cuts - BBC News

I'm sure the same is true in other regions.

 

[Gavin A]

That report kinda highlights the problem

Homeowner Dan Andrews had the solar panels fitted at Christmas and said he would not have paid almost £8,000 for them under the new tariff."We wouldn't have done it with the changes being brought in," he said.
"It's a big investment over a long period of time and it's not worth the risk when the payback could be in 15 or 20 years time."

Shouldn't really have been paying £8k in the first place, but the figures will stack up a lot better if it's more like £5k.

We all know that most customers won't look at payback times above 10 years, so we presumably all know that we have to cut our pricing and adjust what we're offering customers to the point where the payback time is back in the 8-10 year range, same as we did in 2012.

For sure there will be some customers that it just won't work for, but there will still be many that can get those sorts of payback times and returns, and I'm unsure what this last flurry of publicity was aimed at achieving.

 

[Worcester]

The Dom RHI is based on 7 years as that is the average home ownership period.
in practice our customer base is made up of people moving into a new house either to build their family nest or to retire to, and so see themselves there for 15 years.

 

[Gavin A]

The Dom RHI is based on 7 years as that is the average home ownership period.
in practice our customer base is made up of people moving into a new house either to build their family nest or to retire to, and so see themselves there for 15 years.

even if they do, they'd generally want to see that they'd be into profit on their investment well before they thought they might be moving IME.

 

[The Solar King]

did I really just hear Leonie Green on the news saying that pv would now have a 13 year payback?

That's really not the message we need to be getting out there, what needs to be being said is that for high daytime energy users it's still very viable with 8-10 year paybacks possible due to the reduced pricing.

Are STA still using the flawed financial model that doesn't include any allowance for RPI / energy price rises?

The figures are based on those used by DECC. This is one of several more positive stories put out to pre-empt negative stories in the press. Journalists have been requesting contact to report on job losses etc, which no one wants to participate with, it won't make things better. See here for what STA have been trying to acheive:

Solar still a good option despite subsidy cut and VAT hike, says industry | Environment | The Guardian

We have has the EST quoting a 20 year payback under the new rates, so Leo's comments are in high contrast to this.

What a pay back period is depends on how you calculate it, and there is no given standard. I use a full DCF which gives a longer but more realistic period. I will maybe have to stop doing this.

We need a load more bad news of Government failure, NHS crisis, international crisis to bury the changes and allow us all to move forward.

 

[Gavin A]

Not much point still using DECC's figures, the deed is done now, the task now is to support the solar industry and get the message over to the public that solar is still viable. DECCs £6k figures were out of date when published, and I doubt we're going to be doing anything over £5k for 4kWp now, which instantly drops that 14 years to 11, but surely better to give the example of high energy users where payback can be as low as 8-9 years still at the lower pricing for good situations rather than giving a 14 year payback example.

I think I'm going to have to work up some case studies / examples to show how viable it still can be in different situations.

The Solar Trade Association said solar was still attractive even though the payback period for an average system – costing about £6,000 – would now be about 14 years, up from eight years with the current incentive rates.

ETA I know STA have done as much as they can to reduce impact of cuts, and meant well with this press, I liked most of what was said, but was just a bit shocked when I heard Leonnie using these figures.