Here we go again!

[SRE]

Cuts to be announced for solar from 2015. It's my fault - I said I was looking forward to next year

 

[pwboston]

This is the headline

Ministers will announce that they will cut support for onshore wind and solar energy, but give more backing to offshore wind power.

To me that could read that FITS are ending for new installations from 2015, so hopefully that is just bad wording on the BBC website.

 

[SRE]

I've dug around a bit more looks like a 10am announcement and affecting strike price - so big installations only. Pushing bigger players into the domestic market possibly??? We'll know soon ....

 

[SpitfireW'sale]

As above I believe this to be strike price so should not affect FIT directly. However it is yet more bad press and homeowners considering solar will likely hear the negative headline and put the seed of doubt in their mind about whether solar is a good idea or not. Not helpful really. I very much doubt the big utility scale installers will be interested in getting into the domestic market but we are certainly in for some change (again) It sounds like the FIT might be put in to general taxation rather than from energy bills in future though?

 

[SRE]

I don't really understand the strike price but it seems that STA asked for £91 by 2018 and the government have allocated £100 - seems a bit random ....

Missed the bit about Fit going into taxation ....

 

[SpitfireW'sale]

It's an agreed price between large scale developers and government, funded through electricity bills. An agreed price (used to be £125MW/h I think) is guaranteed - if the wholesale price drops below that then the shortfall is funded through subsidy, with money added to electric bills to pay for it. It is meant to guarantee an investment rate in volatile markets to encourage investment. It's also been in the press recently for nuclear, so it is not a solar/wind scheme! The bit about the FIT going into taxation was from discussions I had heard on the news etc. I don't think there has been any announcement about it, just a general political urge to appease the energy companies by removing renewables subsidy costs from bill payers.

- - - Updated - - -

It's an agreed price between large scale developers and government, funded through electricity bills. An agreed price (used to be £125MW/h for solar I think) is guaranteed - if the wholesale price drops below that then the shortfall is funded through subsidy, with money added to electric bills to pay for it. It is meant to guarantee an investment rate in volatile markets to encourage investment. It's also been in the press recently for nuclear, so it is not a solar/wind scheme! The bit about the FIT going into taxation was from discussions I had heard on the news etc. I don't think there has been any announcement about it, just a general political urge to appease the energy companies by removing renewables subsidy costs from bill payers.

 

[TedM]

The announcement https://www.gov.uk/government/speeches/electricity-market-reform-update-investment-in-renewables with more detail here https://www.gov.uk/government/news/...city-to-bring-green-jobs-and-growth-to-the-uk and the full report here https://www.gov.uk/government/uploa...es_-_CfD_contract_terms_and_strike_prices.pdf

Large-scale solar gets a strike-price of £120/MWh, which should still be high enough to be an decent incentive - the previously published figure was £125. The roughly equivalent FiT figure is (Jan-Mar 2014) £112.50 being 6.61p plus 4.64p per kWh for systems > 250kW or stand-alone.

 

[The Solar King]

There are discussions already ongoing about what replaces the current FITs scheme when it expires. This in itself should be seen as encouraging. It will certainly be different from what we currently have. It is very early days and some of it little more than constructing a wish list.

One current concern on FITS is the levels of return for those investing are way higher than the level originally intended (which was 7.5%). This does leave the programme exposed in the current climate.