Possible 6 Month delay to FIT Cuts

[The Solar King]

My point exactly!

Think there has been a recruitment freeze for a very long time.

 

[The Solar King]

You may find the attached timeline helpful.This is the commentary that goes with it:

"The STA has had several meetings with government officials over the last few weeks, including Treasury, DECC as well as the No.10 Special Policy Advisors and Andrea Leadsom. We are continuing to push the merits of the '£1 plan', and why the extra £100m is needed to support the rooftop sector over the next 3 years. It is interesting to note how many myths still need unravelling such as a lack of understanding about how important the UK supply chain is to future costs reductions and that volume growth, not caps, is an essential element to stable support and maintaining jobs.

We have also been working out exactly how and when the various policy changes could be brought in, and when we are likely to hear news on the future of CfD auctions, as well as the impact for solar thermal under the RHI. Our interpretation of all these timelines are highlighted below:

• RO Consultation: The RO consultation response now appears likely to be released at the same time as the FiT consultation response as DECC considers that the two responses are linked.
• FiT consultation: There have been in excess of 50,000 responses, with 2,500 responses providing specific suggestions and evidence. These will all need full consideration and review and it is unlikely that a FiT response will be provided before Paris (30[SUP]th[/SUP] Nov-13[SUP]th[/SUP] Dec), and unlikely (politically) during Paris. There is a small window before Parliamentary Christmas recess on the 17[SUP]th[/SUP] December, but releasing consultations is not likely to happen during recess. The next opportunity for the response would therefore be from the 5[SUP]th[/SUP] January. Note the requirement to lay the Order before parliament for 40 days before being implemented. It is unclear whether a possible "pause" of the scheme could be implemented before the end of this 40 day period.
• CfDs: The intention is to provide further clarity on further CfD auctions before the end of Autumn. This might happen on or after the Comprehensive Spending Review (CSR) on the 25[SUP]th[/SUP] November, but could be as late as the 17[SUP]th[/SUP] December.

On the basis of these meetings and our analysis, we have developed some possible timelines for RO/CfDs and FiTs. These are not definitive, but represent our latest understanding of when policies could be decided and legislation could be brought in.

These are live documents and will be updated as we learn more."

 

[TedM]

AFAIK any revocation of an SI requires the same 40 day Parliamentary process as any change. The 2012 FiT SI revoked all previous FiT SIs, for example.

Changing the tariffs without changing any SI (e.g. to implement zero tariffs to suspend FiTs and get around the 40 day period) is possible but only in line with the timetable already laid down in the extant SI, which means that the next tariff change could only apply from 1st April 2016 and if published by 1st February.

 

[whinmoor]

Changing the tariffs without changing any SI (e.g. to implement zero tariffs to suspend FiTs and get around the 40 day period) is possible but only in line with the timetable already laid down in the extant SI, which means that the next tariff change could only apply from 1st April 2016 and if published by 1st February.

Is there any rule that says changes have to be introduced from 1st of a particular month? Or is that just a convention to make it more convenient and understandable?

 

[TedM]

The present FiT legislation specifies a set of "solar tariff periods" and these are:

1st January to 31st March
1st April to 30th June
1st July to 30th September
1st October to 31st December

Until any new legislation is enacted that might alter this the first day of those 4 quarters are the only dates on which a tariff change can happen and the new tariffs have to be published 2 months earlier.

So the 1st January tariffs have to be published on or before 1st November, which is why OFGEM published the January 2016 rates on 31st October.

 

[Somecamel]

I'd imagine they are being very very careful after what happened 4 years ago

 

[pvman]

Am I correct in thinking that we are now too close (40 days was yesterday 22nd) for a tariff cut before end of March?

Thanks

Tom

 

[whinmoor]

Am I correct in thinking that we are now too close (40 days was yesterday 22nd) for a tariff cut before end of March?

I think they could cut it on 1st Feb or 1st Mar or even a random date of their choosing (such as 11th Feb or 16th Mar) or whatever suits their timescales.

I reckon we will certainly get 12.03p for domestic for a while from 1st Jan but I'm doubtful that it will last for 3 months.

Some people have suggested that it would be bad publicity to make a negative announcement during the Paris Cop21 summit which finishes on 11th Dec. DECC also have to read all the responses to the consultation which might take a few weeks.

It's difficult to plan without knowing the extent of the cuts. RECC have been pestering me for next year's subscription. I wonder how many won't bother renewing.

 

[Gavin A]

I suspect that they'll leave it until after the Christmas shutdown (if they'v actually figured out that the christmas shutdown doesn't count within the 40 days).

THey have about 4 days after the COP summit to submit the proposals, but submitting it then would result in and extra 3 weeks or so of notification to the industry, giving us 3 weeks to work out what to do etc. and only gain those 4 days earlier date for the cut by doing it. I reckon they'll take that time themselves to revise the proposals and drop them on us first day parliament is back in the new year.

But that's all just guesswork, and it does seem as if DECC don't even realise that holidays don't count, so they could submit it just before the break with an illegal cut date, resulting in court action that they'd lose, the cut going ahead on the illegal date then the previous FIT being reinstated and a new date 40 days later becoming the actual date as per the balls up in 2011-12.

If I were a betting man I'd bet on the latter scenario due to the sheer incompetence at decc, which is the worst of all worlds as the publicity around it makes it all such a shambles and like there's been 2 huge cuts one after the other, so all logic about actual returns available goes out the window and the orders books dry up entirely even if it does make financial sense still.

 

[pvman]

I think we are looking at a end of March cut, looks like it would be more complicated to cut before then.

DECC response to FiT cuts delayed until early 2016 | Solar Power Portal

 

[The Solar King]

The previous timeline posted here is still the best information available. Have checked the updated version published on Monday and all dates are unchanged.

In terms of business planning, this is what we are working to.