Ofgem’s Sustainable Development Focus has released figures showing that in the first 6 months of feed-in tariffs in the UK, over 11,000 generator have registered for the tariff, marking a considerable surge in solar photovoltaic installations in particular. Indeed, with 11,352 renewable systems installed, it indicates that the scheme has been more successful than predicted, with enough output to power around 35,000 homes.

Feed-in tariffs work by offering fixed, premium rates for both the energy generated from renewable systems (which is then fed-back into the grid), and the energy used. When first introduced by the Department of Energy and Climate Change (DECC), it was with the intention of incentivising investment in green energy by off-setting the costs of installing renewable energy systems by creating long term, guaranteed yields from the projects. Emulating schemes applied successfully abroad, it seems that in the first 6 months of operation, the tariffs have certainly been effective as a means of boosting renewable installations across the UK.

In order to get the UK grid network fully up to speed with the complex requirements of a low-carbon economy, the Sustainable Development Focus Report also published its proposals for updating the country’s network. Working on a framework of Revenue= Incentives+ Innovation+ Outputs (RIIO), Ofgem is planning on generating £32 billion of investment much needed to upgrade a UK national grid not yet ready for green energy and the mechanisms set up around it.

Alistair Buchanan of Ofgem wrote in a foreword to the report,

“This is the biggest change to the regulatory framework for 20 years and sets the network companies on a path to playing their full role in the transition to a low-carbon economy while delivering value for money for all consumers.”

Solarfeedintariff.co.uk has received hundreds of enquiries asking how the coalition government’s Spending Review will impact on feed-in tariffs. Feed-in tariffs, in the UK known as the Clean Energy Cash Back scheme were introduced as a way of incentivising investment in green energy through the payment of fixed, premium rates for energy generated from small scale renewable projects. Most of the enquiries coming through this website have focused specifically on how the Spending Review will affect UK solar projects so we will seek to answer some of the most popular queries.

How will the Spending Review affect Feed-in Tariffs?

The Department of Energy and Climate Change (DECC) has stated that the tariffs will now be focused on the most cost-effective technologies and fortunately, this includes solar pv. The DECC has said,

“Feed-in tariffs will be refocused on the most cost-effective technologies saving £40m in 2014-15. The changes will be implemented at the first scheduled review of tariffs [in 2012, to kick in 2013] unless higher than expected deployment requires an early review.”

While rates for solar projects will remain unchanged, the government has announced that changes could be made in the 2012 review which could see the tariff cut by 10 per cent in 2014 and 2015. Rates paid by the tariff could be effected by what the DECC have termed a ‘Trigger Point’ where a figure for solar installation is met, reducing the tariff payments.

When will the Trigger Point take affect?

No announcement has been made as yet on the Trigger Point criteria but is likely to revolve around something like installed capacity or applications to install. We will not hear anything until 2012 at which point the government will have to revisit the legislation because currently there is no mention of trigger points in the tariff scheme.

When is the best time to install?

Perhaps one of the most common questions coming to us through our website is the question of the best time to install solar pv panels in order to start taking advantage of the feed-in tariffs. Our answer is always, right away! As it currently stands, you will be able to take advantage of rates of 41.3p until 2012 for units of energy generated from your solar panels. If, however there is a massive take up in solar installation within the next 2 years, the government may decide to reduce the tariff for future installations.

How will any changes affect people who have already installed?

It won’t. Contracts are fixed meaning that anyone who signs up for a tariff rate of 41.3p for units of energy generated can expect those payments for the next 25 years.

Solarfeedintariff.co.uk along with a number of environmental groups are happy with the way solar pv projects are safeguarded amongst the government’s drastic spending review. Now is certainly the time to take advantage of high tariff rates and generate revenue for your household for the next quarter of a century.

Market research and consulting firm, iSuppli has released a report showing the UK as the world’s fastest growing solar market in research looking at solar uptake since last year.

Good news indeed for UK solar and exactly the kind of market reaction which was expected following the announcement of the introduction of feed-in tariffs by the Department of Energy and Climate Change. While the cynics among you might point out that the UK was starting from the lowly figure of 6MW of output in 2009, it in no way detracts from growth figures of 1500 per cent, up to 96MW this year.

Feed-in tariffs, introduced in April 2010 work by offering fixed, guaranteed rates for small scale producers of renewable energy both for the energy they use and the surplus energy fed-back into the grid. The power companies are obliged by the legislation to buy the units of electricity at the top rates, the costs of which are passed onto the consumers.

In areas such as Germany, California and Spain, tariff systems have been an extremely effective way of generating investment interest in new renewable industries, traditionally perceived as unviable. Indeed, the annual Ernst & Young Investment Attractiveness Indices consistently ranks those countries with strong tariff legislation as the most attractive for renewable investors looking for good returns on their capital.

The UK growth is such that it has outstripped that of Spain, a mature solar market whose growth only tipped 730 per cent.

Dr Henning Wicht, Director of iSuppli commented that,

“Things definitely are looking brighter for the solar market in the United Kingdom in 2010, as the country has adopted attractive Feed-in-Tariffs to promote PV adoption. Furthermore, with leading solar country Germany cutting its FITs, the focus of the PV world is shifting to places with more favourable incentives, making the United Kingdom a solar hotspot this year.”

With tariff legislation now in place and growing consciousness of the viability of renewable energy, it is expected that the UK solar market will continue to grow albeit at the more steady rate of 50 per cent. The iSuppli study estimates that the UK market will reach 214MW by 2012 and 501MW by 2014 helping the UK to go along way to meeting its carbon reduction targets and building the foundations of a strong renewable energy industry capable of competing with the like of Spain and Germany.

Seemingly slow to catch on to the potential of renewable energy, it seemed that the UK had finally cottoned on to the advantages of green investments with the passing of the Energy Act, the creation of the Department of Clean Energy and Climate Change and the recent introduction of feed-in tariffs.

However, the Committee on Climate Change (CCC) has delivered a warning suggesting that cut-backs in government spending on low carbon initiatives could see the UK fall behind competitors in the green energy industry.

The CCC, which advises the government on meeting carbon emission reduction targets both in the short and long term has stated that the government should re-think cutting £34 million from renewable energy projects including wind, biofuel and geothermal energy. Indeed the CCC believes strongly that more investment should be made in green projects to ensure the long term viability of the British renewable industry.

With Department of Energy and Climate Change (DECC) announcements confirming that certain grants for green projects will be cut, it certainly gives a slightly worrying indication that more cloth cutting could be taking place over the next 12 months. With this in mind, the CCC has highlighted the keys areas in critical need of continued government support:

·          Offshore wind

·          Tidal & wave power

·          Carbon dioxide capture and storage

·          Cleaner aviation

·          Electric vehicles

·          Smart power grids