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Feed-in Tariffs Review - 2 Nov 2011

This week the Government announcedcomprehensive review of the Feed-in tariffs (FITs) scheme, which makes proposals that would affect any Solar PV installations from now. The headline change is that a new tariff would be introduced for schemes up to 4kW in size of 21.0p/kWh – down from the current 43.3p/kWh.

This is a decrease of about 51%, and will come into effect from December 12th. This means that PV panels installed after this date will be subject to the new rates (e.g. 21p per unit rather than 43p for 4kwh schemes or smaller, or 16.8p rather than 37.8p for 4-10kwh arrays). 

Prices of panels are dropping (by as much as 50%) and efficiencies improving, so in theory costs of installations will drop.

What does this mean?

If you already have an eligible solar PV installation with a complete and valid Microgeneration Certification Scheme (“MCS”) certificate, and your FIT licensee (an electricity supplier) has received your application form and MCS certificate, there will be no change. You will continue to be eligible, for 25 years from the eligibility date of your installation, to receive the current rate which is 43.3p for each kWh of electricity you generate.

If you are in the process of installing, or are about to start doing so,  and your installation is completed and certifiedbefore midnight on 11 December 2011, you will be eligible to receive the current rate for each kWh of electricity you generate.

If you are in the process of installing, or considering installing PV, butdo not both complete and certify the installation before midnight on 11 December 2011, you will receive 43.3p for each kWh of electricity you generate between the date your application is received and 31 March 2012. From 1 April 2012 you will receive a lower rate of 21p per kWh generated for the remainder of the 25 years eligibility period. 

If you complete the installation and certification on or after 1 April 2012, you will be required to demonstrate that the building to which your installation is attached or wired meets specified energy efficiency requirements in order to be eligible for the new 21p tariff. If you do not meet these requirements at the time you apply for FITs (or, for a transitional period, within 12 months afterwards), you would receive a lower tariff of 9p per kWh.

Full details of this information is available athttp://www.decc.gov.uk/assets/decc/11/meeting-energy-demand/renewable-energy/3373-solar-pv-consumer-guide.pdf

Clearly the interest rate returns on a solar project will not be as financially attractive as they were (more like a 4%-5% interest rate return rather than 6%-8%) and it will take longer to pay off any loan (say 12-16 years instead of 7-8).

Shrinking the Footprint Petition

The national CofE Shrinking the Footprint campaign is urging the Department of Energy and Climate Change (DECC) to extend the deadline for eligibility of the higher rate back to the previous date of 31st March 2012 for churches and community groups in appreciation of the longer planning time required in these projects. Churches may not have to improve their energy efficiency like domestic users (Shrinking the Footprint is again questioning the need for churches to produce Energy Performance Certificates) to secure the FiTs from next April, although it seems likely that churcheswill be required to show clear evidence that they have made efforts to reduce their energy consumption and improve their efficiency through a benchmarking or auditing scheme (Shrinking the Footprint are developing this at the moment and will ask DECC to approve it as an alternative to EPCs).

In light of the value incentives have added to the church and community sector Shrinking the Footprint have started an online petition asking for an exemption for churches and other not-for-profit groups from the reduction in FiTs.

To sign the petition visit:https://submissions.epetitions.direct.gov.uk/petitions/20928

Consultation

The proposals are subject to an eight-week consultation period, and views are sought by Friday 23 December 2011. For further information and to view and download the consultation document visit:www.decc.gov.uk/en/content/cms/consultations/fits_comp_rev1/fits_comp_rev1.aspx

Resources

For all general information on the Feed-in tariffs from the  Department of Energy and Climate Change - visitwww.decc.gov.uk/FITs

Other resources for churches exploring Solar PV can be found at:http://www.oxford.anglican.org/environment/resources/your-church-and-solar-pv.html

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