Feed in Tarrif - Post April 2012 - concerned?

[JamieK]

I attended a seminar this week in which a member of the DECC was speaking and it was very obvious there is real potential for the FiT to be drastically slashed in April 2012.

I think many would agree that if theTarrif fell off a cliff in April much of the drive in the renewable market (specifically PV) would disappear and many who had invested in MCS and training could be left out of pocket.

The "spending envleope" for each year was noted as:

2011-12: £80m
2012-13: £161m
2012-14: £269m
2014-15: 357m


The figures above are the DECC cap on spending for renewable incentives for each year.

It was telling that the guy from DECC couldn't, or wouldn't give any figures beyond this point.

Foor for thought.

Some even suggested that we may experience retrospective cuts in the FiT going forward.

 

[TedM]

They won't go beyond 2014-15 as that is as far as government spending forecasts go at the moment.

It would be interesting to put those figures against the number of systems already signed up for FiTs and see what the slack left over is after allowing for predicted generation and payments already committed to.

It's not far off a straight-line level.

Year 1: £80m
Year 2: £80m + £81m
Year 3: £80m + £81m + £108m
Year 4: £80m + £81m + £108m + £88m

Assuming, say, 75% of that is accounted for by just domestic PV at around 40p/kWh then you are looking at approx 150 to 250 MW of new PV each year, which at 4kW per system, is 40,000 to 65,000 households per year.

Nothing to worry about yet.

[edit] Oops, just noticed that 2010-11 isn't included there, so the figures will be lower by the systems already installed in the first year.

 

[t4sltd]

There is currently 70MW of PV a month (over 25,000 systems) being installed with around 100,000 done in 2010-11 so by my reckoning they can't afford to fund the system if install rates continue. I expect install rates will drop a lot in April due to the proposed cuts in FIT, we will have to see if they reduce rates further than already proposed but wouldn't be surprised. I expect a price war in April lot of sub-contractors not getting work anymore and installers going bust / being bought out by large companies (but I could be completely wrong). Renewables is a boom and bust industry and always has been as governments mess around with funding making life extremely difficult.

 

[TedM]

Don't agree with your figures I'm afraid.

At the end of June there were just under 45,000 systems registered for FiTs. There were 30,000 systems at the end of March so the total installs for all FiTs systems (not just PV) is only around 5,000 a month currently.

These cumulative figures include all the systems that were installed prior to FiTs which have been migrated from ROCs which include nearly 3,000 PV systems.

The total amount of domestic PV actually installed in the first year of FiTs (April 2010 to March 2011) was 61.5MW across 23,500 systems.

The total amount of PV installed in the 3 months from April to June 2011 was about 45MW (15MW per month) across 15,000 systems at an average of 3kWp per system.

All this info is available from data published by OFGEM - Feed-in Tariff Installation Report 30 June 2011 - More Document Information

 

[t4sltd]

Thanks for the data Ted - I agree with your sums (I had mis-red some cumulative figures as monthly). So on that basis the install rate could go up by factor of 2 or 2 before the money starts running out? I still expect the install rate to drop in April and for it to get tough for some people but we will see.

 

[TedM]

Here's a graph of the most recent 27 months for PV installs (taken from the OFGEM data mentioned above). Now that I've SQLed it , it looks like there is some delay between the commissioning date and OFGEM actually getting the data into their figures, so this looks a little different to the figures I quoted before. I expect that when the next quarter's data are released that current low figure for June 2011 will jump up a bit higher, for example.



Anyway, there are currently 42,590 PV systems registered for FiTs giving a total TIC of 120,162 kWp.

 

[SRE]

I reckon that the payback will just move from 8 years to 10 years again when the Fit drops. Yes there will be a drop in installations in April - everyone will be wanting it done by March 2012 but once April has passed and the sun starts to shine again - 10 years will look attractve again and off we will go until the next change in FiT. We didn't have a problem selling with a 10 year payback and don't anticipate having a problem doing it again. I reckon we'll need April off to recover from the Jan - March rush - then again, I'm always optimistic.

 

[TedM]

I've back-casted the figures from those DECC budgets for FiTs and I get this for a predicted number of small scale PV installations.

2010-11 25,200
2011-12 24,100
2012-13 51,400
2013-14 70,300
2014-15 55,700

Of course there are several assumptions included in the calculation and changing any one will affect the result:

1 kWp produces 1000 kWh per year
RPI increases 5% each year
2012 tariff 40p
2013 tariff 38p
2014 tariff 36p
90% of FiTs is for PV
95% of PV is for small PV
Average size of system 3.2kWp

but I think these are all reasonable with the data I currently have.

 

[SRE]

2010-11 25,200
2011-12 24,100
2012-13 51,400
2013-14 70,300
2014-15 55,700

These projections are per year, not cumulative aren't they??

 

[beefheart]

sre you need some sleep, if cumalative alot of installations getting uninstalled in 2011-2012......

 

[SRE]

It's my new business idea - lol :rolleyes4:

 

[TedM]

Yes, they are numbers of new installs in each year.

 

[SolarCity]

Any idea why there appears to be drop this year?

 

[TedM]

Probably just because of assumptions I've had to make.

The DECC budget figure given for the current year 2011-12 is £80 million, which I've had to apportion as x% for new installs last year (2010-11) that are now receiving their second year of payments and y% for new installs this year. I've had to do this as there is no DECC figure given for last year on its own.

I chose a 50-50 split which pretty much aligns with the known PV installed (from OFGEM data) but then this years payments are about 5% higher than last due to RPI so the kWp for new installs has to be a little lower to make up for this.

The model is actually very sensitive to the irradiance factor implied in the 1kWp = 1000 kWh/year. Just changing this to 1050 would reduce the number of installs by more than 10,000 across the 5 years. And changing it to 950 increases it by more than 10,000.