Fit Rumours

[SRE]

A colleague was at a meeting recently where a representative from DEC was attending. She was asked about FiT post March 2012 but wouldn't even commit to it still being there at a reduced rate - has anyone else heard anything????

 

[JD6400]

Hi SRE

I have heard that a well respected land management agency has sent out publicity of above 10kw coming down to 19p but have not seen it myself !

My personal view is that under 4 kw will go up maybe as much as 10p , 4-10 kw will stay about the same with maybe just a small uplift , and 10 kw plus is going to tumble to probably around the 20p mark ?
Obviously just pure conjecture , but what do others think ?

 

[SRE]

In theory the anticipated Fit for under 4kwp was going to be around the 37p mark from April 2012 but I haven't seen anywhere whether this is before or after RPI is added. So it could possibly be 37p + 2 lots of RPI - maybe 40p ....... I wish someone would just confirm what it's going to be so we all know where we are with it! I can't remember where I heard it (maybe on this forum) but I'd heard there would be a further review of 10 - 50kwp by Christmas. Don't know how true that is ..

 

[TedM]

All of FiTs is currently under review - apart from the > 50kW PV and AD that has already been announced under the DECC 'fast track'.

I would expect <50kW PV rates to drop from where they are currently - just as a result of lower market costs.

 

[SRE]

Ted, do you know when they are due to be announced?

 

[SRE]

What is the aim of the feed-in tariff? And what do you think it should be? | YouGen Blog | YouGen, Renewable Energy Made Easy

Found this - looks like we won't know anything until just before the changes. not quite sure how you do your business planning around that!

 

[Worcester]

Had lunch the other day with the head of one of the UK's biggest banks, (his shout - he earns more than I do! ) His comment was that during their discussions with the Government, they have made it perfectly clear that if they mess around with items such as the Feed in Tariff too much, the banks will pull finance from ALL sectors of renewables as tey won't be able to trust the Government. So, mess around with FiT without proper notice and we'll also pull offshore wind was the message!

 

[whlphil]

Obviously the Fast track review will come into force (maybe) on Aug 1st (there is a move from house of Lords to block the review but dont think it will happen), the whole of the Feed in Tariff system is under comprehensive review which will be concluded by the end of the year with the review to take effect Apr '12.

My feeling is that Sub 4kw will get cut 5-10%, over 4kw cut 30%, 150kw 3-5%, 250 and above unchanged.

Now for the bad news the FiT scheme has a finite amount of funding which when its used its gone, there will be no more within this spending review period which takes us up to 2014-15. The total amount of funding equates to if I can remember rightly somewhere between 400-500Mw currently as of a couple of weeks ago there was 145Mw installed so far. My best guess is that with the massive amount of free solar schemes that are currently running ( I know of 3 that are doing between 10,000 and 30,000 and there lots more in the pipeline) the money will be all spent by the mid to end of next year.

So make the most of it now!

 

[BruceB]

Unlike RHI, FIT money does not come from Government coffers, so why do you say it is limited?
Regards
Bruce

 

[whlphil]

Unlike RHI, FIT money does not come from Government coffers, so why do you say it is limited?
Regards
Bruce

FiT money is regarded as OECD borrowing by the ONS which sees it as national debt - as essentially its a tax that you cant get out of as its applied to everybody who purchases electric, taxes are national debt under their rules - the government is trying to cut the debt so therefore they have to control the overall pot which is why its was included in the CSR (spending review last year) theres a bit in this doc about half way down that explains that the ONS (office of national statistics) are still to make a judgement on that but the government has decided thats the way they will see it.

http://www.decc.gov.uk/assets/decc/What%20we%20do/UK%20energy%20supply/Energy%20mix/Renewable%20energy/1691-qa-info-levy-funded-spending.pdf

 

[BruceB]

OK, I take the point, but they would be pressed to simply stop the spending if it hit the limit. The mechanism for adjusting the spending appears to be defining FIT rates for new entrants. And presumably they want to get close to the limit because that will helping meet various renewables targets.
Regards
Bruce

 

[whlphil]

I'll dig the limits of the scheme funding and what that equates to out, got it somewhere as Ive looked at it for a funding document just may take me a day or two. Greg Barker has stated repeatedly that the scheme will not go over its budget (it cant as they will then not achieve the lending criteria and credit ratingfrom the IMF and others which they absolutely will not do) but equally there are moves afoot to change the funding but we wont find out about that till next year at best.

 

[TedM]

The total funding for FiTs was set out in one of the supporting documents (I'll see if I can find this) to the original DECC consultation. It's always been my understanding that FiTs would stop when that figure was reached, the purpose of FiTs being to kick-start the UK industry to a state where it could continue without needing the subsidy.

At the rate electricity prices are rising that might be a lot sooner than previously anticipated.

[edit] Here's the original Impact Assessment http://------/qxMqsc

The figures in there will have been amended by last year's CSR.

 

[whlphil]

The total funding for FiTs was set out in one of the supporting documents (I'll see if I can find this) to the original DECC consultation. It's always been my understanding that FiTs would stop when that figure was reached, the purpose of FiTs being to kick-start the UK industry to a state where it could continue without needing the subsidy.

At the rate electricity prices are rising that might be a lot sooner than previously anticipated.

[edit] Here's the original Impact Assessment http://------/qxMqsc

The figures in there will have been amended by last year's CSR.

I think your right Ted hopefully prices will rise but thats more dependent on things like China's sustained growth or wether Fracking can make an impact on gas prices, Its going to be difficult for a year or too when FiT's run out as we wont be at grid parity until at least 2016-17 with domestic electric prices and probably 2018-19 on commercial elec rates prices unless some of the disruptive technologies like Alta Devices Gallium Arsenide cells come to fruition but thats a good 3 to 4 years off on commercial scale and a bit of a pipe dream anyway.

Looks like we will have to become experts in Tax and PPA's to sustain the industry!