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Posts tagged with: Greg Barker

After weeks of anticipation the Department of Energy and Climate Change (DECC) has today published the results of the latest solar feed-in tariff consultation. From August 1 the new rate for 4kW systems will be 16p/kWh, set in line with current installation figures.

With installed prices now more than 50 percent lower than in April 2010 when the FiT was first introduced, the latest tariffs are aimed at providing the same returns as originally set out.

Speaking in the House of Commons this afternoon the Minister of State, Greg Barker announced a range of alterations to the existing feed-in tariff (FiT) scheme. The UK solar industry will now benefit from a less complex degression management model, which includes smaller quarterly degressions linked to market deployment. This differs from the existing system, which offers an automatic degression.

As expected the new tariffs [seen below] will go ahead from August 1, one month later than originally planned. After noting lower-than-expected installation rates the Department decided to hold off on cutting the tariff until the market begins to pick up.

Band (kW) Standard generation tariff (p/kWh) Multi-installation tariff (p/kWh) Lower tariff (if energy efficiency requirement not met) (p/kWh)
•4kW (new build) 16.0 14.4 7.1
•4kW (retrofit) 16.0 14.4 7.1
>4-10kW 14.5 13.05 7.1
>10-50kW 13.5 12.15 7.1
>50-100kW 11.5 10.35 7.1
>100-150kW 11.5 10.35 7.1
>150-250kW 11.0 9.9 7.1
>250kW-5MW 7.1 N/A N/A
stand-alone 7.1 N/A N/A

The tariff for a domestic solar installation will now be 16p/kWh, down from 21p, and will be set to decrease on a three-month basis by 3.5 percent thereafter. These degressions are expected to be delayed if the market slows down. Uptake will be viewed in three different bands (domestic (size 0-10kW), small commercial (10-50kW) and large commercial (above 50kW and standalone installations). Quarterly reductions will be determined within those bands.

The new tariffs, which will now be paid over 20 years instead of 25 years, should give a return on investment (ROIs) of over 6 percent for most typical, well-sited installations, and up to 8 percent for the larger bands.

Investor income will also be boosted by the increase in the export tariff, which will increase to 4.5p from 3.1p. This will be particularly beneficial for large-scale solar investors, who will be able to add the export tariff to the feed-in tariff in order to generate a reasonable return on investment. All tariffs will continue to be index-linked in line with the Retail Price Index (RPI).

DECC also revealed that organisations with more than 25 solar PV installations will get 90 percent of the standard applicable tariff, increased from the 80 percent proposed in February. This increase reflects new evidence heard on costs involved for these projects.

Although reduced, the new rates are aimed at kick-starting the UK solar market, with an aim of installation at least 800MW in 2012/13. In fact, DECC expects that these rates to provide the resources for the UK to achieve 800MWp to 1,000MWp each year to 2015, with an extended ambition for 22GW for 2020. These figures account for solar capacity to be installed in each year than the original FiT budget offered over five years, reflecting the strong growth the industry achieved in 2011.

These figures do not include larger projects that are now able to use two ROCs; it is suggested there could be a further 300-600MWp installed under this mechanism before April 2013.

“Today starts a new and exciting chapter for the solar industry. The sector has been through a difficult time, adjusting to the reality of sharply falling costs, but the reforms we are introducing today provide a strong, sustainable foundation for growth for the solar sector,” Barker commented.

“We can now look with confidence to a future for solar which will see it go from a small cottage industry, anticipated under the previous scheme, to playing a significant part in Britain’s clean energy economy.

“I want to send a very clear message today. UK solar continues to be an attractive proposition for many consumers considering microgeneration technologies and that having placed the subsidy support for this technology on a long-term, sustainable footing, industry can plan for growth with confidence.”

Alan Aldridge, Chairman of the Solar Trade Association said: “We broadly welcome many of the Government’s decisions for how solar PV will be treated in the FITs scheme and wholeheartedly welcome the inclusion of Solar in DECC’s updated Renewables Roadmap; this should reassure consumers and solar companies alike that the Government recognises and stands behind a major role for the solar industry.

“Despite the currently slow market, the industry can have some confidence that the new Tariffs are tight but workable. Householders should be reassured the new Tariffs will provide more attractive returns than can be found elsewhere today. The STA is now keen to work with Government to get this positive message out.”

The Minister also announced plans brought forward by Cornwall Council and the Building Research Establishment to set up a National Solar Centre in Cornwall.

Cllr Alec Robertson, Leader of Cornwall Council said: “The FiTs scheme allowed many people across Cornwall to learn about renewable energy, especially solar power, and Cornwall would welcome the establishment of a new National Solar Centre that  will be at the heart of the bright future for PV in the UK. We’re pleased that DECC has announced changes that improve the predictability for the FiTs scheme”

Although many areas of today’s news will inject an element of confidence into the UK solar market there are still some areas that are expected to cause concern. There is a fear that the August 1 cuts could continue to stall uptake, and that DECC has not accounted for this issue fully within the consultation.

 

Originally posted on Solar Power Portal.

Welcoming an announcement by Energy Minister Greg Barker today (Thursday 24 May 2012) setting out a clear plan for solar power to 2020, Friends of the Earth’s Executive Director Andy Atkins said:

“After a year and a half of crippling uncertainty, the sun is starting to shine again on the solar industry.

“Greg Barker’s 2020 vision will allow solar firms to get back on their feet, protect jobs and plan for the future – but to avoid more fiascos any mechanism for setting subsidy payments must be managed independently of Government.

“The Energy Bill is a once-in-a-generation opportunity to create jobs and tackle high fuel bills by switching our electricity supplies to clean British energy – but current plans will leave the nation hooked on costly gas and risky nuclear power.

“Developing the nation’s huge renewable energy potential will help drive us out of recession – the Government must make it easier for communities, schools and hospitals to plug into clean power.”

This week, Friends of the Earth and the Federation of Small Businesses wrote to Energy Secretary Ed Davey, urging him to end the uncertainty over the feed-in tariff that is hampering the solar industry, and to set out a clear plan to 2020 that enables the sector to grow steadily and with confidence.

 

ENDS

Notes to editors:

1.    The letter to Energy Secretary Ed Davey from Friends of the Earth and the Federation of Small Businesses is available at: http://www.foe.co.uk/resource/factsheets/ed_davey_letter_may_2012.pdf

2.    In February 2012 Friends of the Earth welcomed the Government’s announcement of a new ambition to deliver 22GW by 2020 through solar power – saying it was a first step towards putting the industry on a stable footing and recognising its significant potential. http://www.foe.co.uk/resource/press_releases/solar_review_09022012.html
3.    Earlier this year Friends of the Earth won a legal challenge against the Government’s premature cuts to solar feed in tariffs, which pulled the rug from under the solar sector and led to around 6,000 job losses.
http://www.foe.co.uk/resource/press_releases/government_loses_appeal_over_unlawful_solar_cuts_25012012.html

4.    Friends of the Earth’s Clean British Energy campaign is urging the Government to listen to the public and transform our broken energy system by developing clean and affordable power from our wind, sun and water – backed by 85 per cent of the public. For too long the Big Six energy companies have locked Britain into importing costly gas and coal – causing our fuel bills to rocket. Backing renewable power and cutting energy waste will stabilise fuel bills and create new jobs. To find out more visit: www.cleanbritishenergy.co.uk.

The Government has today announced plans to ensure the future of the Feed-in Tariffs scheme to make it more predictable. Transparency, longevity and certainty are at the heart of the new improved scheme.

The reforms will provide greater confidence to consumers and industry investing in exciting renewable technologies such as solar power, anaerobic digestion, micro-CHP, wind and hydro power.

The Feed-in Tariffs (FITs) scheme provides a subsidy, paid for by all consumers through their energy bills, enabling small scale renewable and low carbon technologies to  compete against  higher carbon forms of electricity generation.

The surge of solar PV installations in the latter part of last year, due to a 45% reduction in estimated installation costs since 2009, has placed a huge strain on the FITs budget.

Climate Change Minister Greg Barker said: “Today we are announcing plans to improve the Feed-in Tariffs scheme. Instead of a scheme for the few the new improved scheme will deliver for the many. Our new plans will see almost two and a half times more installations than originally projected by 2015 which is good news for the sustainable growth of the industry.  We are proposing a more predictable and transparent scheme as the costs of technologies fall, ensuring a long term, predictable rate of return that will closely track changes in prices and deployment.

“I want to see a bright and vibrant future for small scale renewables in the UK and allow each of the technologies to reach their potential where they can get to a point where they can stand on their own two feet without the need for subsidy sooner rather than later.”

A BETTER FIT SCHEME FOR CONSUMERS AND COMMUNITIES

  • A tariff of 21p/kWh will take effect from 1st April this year for domestic-size solar panels with an eligibility date on or after 3rd March 2012. Other tariff reductions apply for larger installations.
  • The Department has listened carefully to feedback on the energy efficiency proposals that we put forward in the consultation of 31st October. Properties installing solar panels on or after 1st April this year will be required to produce an Energy Performance Certificate rating of ‘D’ or above  to qualify for a full FIT. The previous proposals for a ‘C’ rating or a commitment for all Green Deal measures to be installed was seen as impractical at this stage. We estimate that about half of all properties are already eligible for a ‘D’ rating.
  • From 1st April 2012, new ‘multi-installation’ tariff rates set at 80% of the standard tariffs will be introduced for solar PV installations where a single individual or organisation is already receiving FITs for other solar PV installations. This reflects the lower costs of such installations, as they benefit from the economies of scale. Based on the feedback  received, the threshold is set at more than 25 installations. Individuals or organisations with 25 or fewer  installations will still be eligible for the individual rate. DECC is now consulting on a proposal that social housing, community projects and distributed energy schemes be exempt from these multi-installation tariff rates.
  • The tariff for micro-CHP installations will be increased to recognise the benefits this technology could bring and to encourage its development.

A BETTER FIT SCHEME FOR INDUSTRY

  • In line with the evidence of falling costs for solar PV, DECC is proposing to peg the subsidy levels to cost reductions and industry growth to provide more certainty for future investments.  This will ensure that subsidy levels keep in step with the market. It builds on the best of the existing German system and will remove the need for emergency reviews.
  • Using budget flexibility to cover the overspend resulting from high PV uptake this year, while still allowing £460 million for new installations over the Spending Review period. This won’t have any impact on consumer bills beyond the agreed overall cap on renewable subsidies as it will primarily be funded from an under spend on the budget allocated for large-scale renewables.

 

Friends of the Earth is urging Ministers to focus on putting the solar industry back on a stable footing after Energy Minister Greg Barker confirmed via Twitter today (Tuesday 3 January 2012) that the Government has decided to try to appeal a ruling that its solar cuts are illegal – at a potentially huge cost to taxpayers.

The green campaigning charity said the Government must introduce a clear plan to reduce solar power payments in line with falling installation costs, rather than prolonging industry uncertainty and jeopardising jobs by pursuing an expensive legal appeal.

Following a legal challenge by Friends of the Earth and two solar firms Solarcentury and HomeSun just before Christmas, the High Court ruled that the Government’s plans to rush through sudden cuts to solar payments – before its own consultation had ended – were illegal.

The court refused permission for an appeal on the basis that the Government has no realistic prospect of winning. The deadline for lodging an appeal is 4pm tomorrow, 4 January 2012.

Friends of the Earth is also calling on Ministers to reduce tariff rates in a planned way from February 2012 to protect jobs, and to increase the overall budget for the feed-in tariff to allow more people – including poorer households and community groups – to benefit from solar power.  The group says this is possible without any additional cost to bill payers because of the increased tax revenue the scheme is generating.

Friends of the Earth’s Head of Campaigns Andrew Pendleton said:

“The Government’s illegal cuts to solar tariff rates have near-crippled an industry and threatened thousands of jobs.

“Trying to appeal the High Court’s ruling is an expensive waste of taxpayers’ money – the court says the Government has no realistic chance of winning, and it will prolong uncertainty among solar companies just when they need reassurance.

“Ministers should accept the High Court’s decision and end business uncertainty and protect jobs with a clear plan to reduce payments from February, in line with falling installation costs.

“The Government must expand the scheme overall – with all the tax revenue the scheme generates, this can be done at no extra cost to bill payers.”