Will the spending review affect feed-in tariffs?

Homeowners will be eagerly awaiting news of whether or not the government's comprehensive spending review will bring with it cuts to the feed-in tariff.

Chancellor George Osborne will announce details of any spending cuts to government departments tomorrow (October 20th).

Among the cuts could be reduced funds for the scheme, which was introduced in April this year.
Consumers who buy solar panels can sell their excess energy back to the grid in return for payment from the government.

Farmers in particular have found this to be a lucrative prospect, using their lands for large-scale solar operations, the BBC reported.

Michael Eavis, owner of Worthy Farm and host of music festival Glastonbury, has created the UK's largest agricultural solar array, which will too benefit from the tariff.

He told the news source that he will make his return after about ten years.
However, if the tariff is cut, there could be less of a demand for the technology.
Ray Noble from the Renewable Energy Association told the BBC: "If they touch the feed-in tariff, you can forget about private sector funding for renewables."

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Feed-in Tariffs impact solar PV more than other technologies

The REA‘s analysis of Ofgem‘s figures show 6,930 solar PV panels serving the domestic sector have been installed since the introduction of the FiT.

The Renewable Energy Association (REA) has published its analysis of figures obtained from energy regulator Ofgem, which show that 6,930 solar PV panels serving the domestic sector have been installed since the Feed-in Tariff (FiT) was introduced in April this year.


The figures, as interpreted by the REA, also reveal that 1,376 domestic PV installations have been transferred from the Renewables Obligation (RO), with a further 14 schemes transferred across the commercial, industrial and community sectors.

Based on this analysis, the REA claims the tariffs have had more of an impact on solar PV than other technologies.

Chief executive of the REA, Gaynor Hartnell, said: "In the first five months of the scheme, the tariffs have had more of an impact on solar PV than other technologies, but that's hardly surprising.
"Solar panels are the most straightforward renewable power generation technology for the average householder. All you need is some roof space with right aspect. It is usually rapid to install and planning permission is rarely required as it is permitted development."

She added that, despite this, it was important to keep the growth in perspective, with the UK having only installed 2% of the PV installed in Belgium last year, meaning "we have a lot of catching up to do".
The figures, correct yesterday (September 6), provide further detail on those published by Ofgem last week, which showed how many solar photovoltaic devices were fitted in August under the Feed-in Tariff.

Projects installed under the Renewables Obligation, prior to 15th July 2009 Projects installed under the Renewables Obligation, after 15th July 2009New houses with PV panels under 4kW, built after 1st April 2010 Existing homes (ie retrofitted with PV panels) under 4kW, built after 1st April 2010Projects in range 100kW to 5MW, built after 1st April 2010Projects in range 10kW to 100kW, built after 1st April 2010Projects in range 4-10kW, built after 1st April 2010

Source: REA's analysis of Ofgem's figures
On top of looking in greater detail at the number of installations which have migrated from the RO - with more set to transfer before the October 1 cut-off date - the REA has also surveyed its members to find that the tariffs have resulted in a 62% increase in employment levels to date, with an overall increase of 125% likely by the end of the first tariff year.

The survey was based on the results of 45 companies, ranging from sole traders to large multinationals. The REA said the majority of the responses were from installers, with five new companies having been set up as a result of the FiTs.

The REA released its analysis on the day that climate change minister, Greg Barker, endorsed FiTs for solar power during a visit to Birchwood High School in Bishop's Stortford, Hertfordshire - the first school to benefit from a new scheme offered by renewable technology enabler, Our Generation.
Our Generation has secured private sector funding as a result of the government's FiT, which will be used to enable "hundreds of schools" throughout Britain to have solar electricity systems installed free of charge.
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The new Feed-in Tariff – A tax on Northerners?

James Lovelock has questioned whether people have the intelligence to deal with a concept as complicated as climate change. Creating workable and effective policies in this area is certainly daunting, as Government is increasingly discovering. As their policies start to be implemented, I thought it would be a good time to reflect on the strengths and weaknesses of different approaches – starting with the recently introduced Feed-in-Tariff.

A generous tariff


Since its introduction, hardly a week has gone by without an organisation contacting us with a Blackadder-style cunning plan to make money from the new Feed-in Tariff.

Fundamentally, organisations have worked out that the Government has got its sums wrong and that the tariff is far too generous if certain criteria are followed by the installers.

They have calculated that panels need to be installed in the south or south-west to make a serious profit. They need to be able to install the panels quickly, at a reasonable scale and facing south.

They also need to sign a 25 year agreement with the organisation or person who is having the panels installed on their land or property.

If they meet these criteria, organisations have calculated that they can cover the capital costs of the installation themselves, provide free or discounted electricity and be able to start to generate a profit on their investment after six to eight years.

The economics of the tariff have resulted in a plethora of initiatives. For instance, owners of land in the south-west from farmers to industrial sites are being asked to rent their land for panels. Cornwall County Council is aware of at least 30 developers who have approached organisations in the county.
Homeowners in the south-west are being approached with an offer of free panels and discounted electricity if they make their roof space available for a 25 year period. Housing Associations and other community buildings are also being approached with an offer of free or discounted electricity in return for their roof space.

Good intentions but...


The Feed-in Tariff was introduced by Government with all the right intentions but the reality is certainly not quite what they expected. Clearly the tariff is socially unjust.

It penalises people in the north, people who do not own sufficiently large enough roof areas to interest the installers and those who are not in a position to make a 25 year commitment.

Environmentally the tariff will have some negative implications. The offer of free or discounted electricity reduces an economic driver for energy efficiency. There are implications linked to putting panels on agricultural land.

Nobody has looked at the impact on soil erosion, flood run-off, the aesthetics, or the fact that it might decrease the amount of land desperately needed for growing food.
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Sun rises on British Gas solar panel offer

British Gas has today become the latest energy giant to try to break into the booming market for domestic renewable energy technologies, unveiling a new service that will allow households to install solar panels at no up-front cost.


Following the launch of the UK's feed-in tariff incentive scheme in April, many energy companies and specialist renewable energy firms have launched new financing and installation schemes designed to help households deploy rooftop solar panels.

British Gas has now joined them with the expansion of its mySolar Energy pilot scheme, which provides customers with the choice to either pay for a solar panel themselves or take advantage of an offer from the company that involves no up-front cost.

Under the terms of the deal, customers taking up the free panel will effectively rent part of their roof space to British Gas, meaning they can use the energy generated by the solar panel, but British Gas keeps the revenue generated through the feed-in tariff scheme. The deal will only be open to British Gas customers and will initially be limited to 1,500 installations.

Alternatively, households can take advantage of a two-year, zero per cent APR finance deal and pay for the panels and installation themselves, allowing them to keep payments received through the feed-in tariff scheme which can reach up to £1,000 a year.

"Installing solar panels will create a regular, tax-free income for homeowners," said financial expert and broadcaster Jasmine Birtles. "Not only that, but the income is index-linked and guaranteed by the government for the next 25 years. As it typically gives returns of five to eight per cent it's potentially far better than most current bond or gilt investments. It is also a great way to keep your electricity bills down."

British Gas already provides solar installations to businesses through its wholly owned subsidiary Solar Technologies and Jon Kimber, managing director at British Gas New Energy, said the firm had now set itself the target of becoming the "leading player" in the domestic solar sector.

However, the company is likely to face stiff competition from rival energy firms such as E.ON and Npower which are also offering services designed to take advantage of the feed-in tariff, as well as specialist firms such as Solarcentury and HomeSun.

To coincide with the launch of the new service, British Gas released new research revealing that about half of British homes could generate £600 a year from rooftop solar panels using the feed-in tariff, while some could earn up to £1,000 a year. The company estimated that in total British homes could generate £7bn in additional revenue while slashing their carbon footprint.

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UK start up announces £1bn solar panel giveaway

UK solar start up HomeSun will this week launch an ambitious £1bn plan to install free solar panels on 100,000 homes within the next three years.

The company, which was launched by a group of executives from the energy, building and carbon offsetting industry, will cover the cost of installing and maintaining rooftop solar photovoltaic panels in return for keeping the revenue generated by the panel through the government's feed-in tariff scheme.

HomeSun claims that homeowners who sign up to the scheme will be able to reduce their electricity bill by up to a third, without having to spend the £11,000 it typically costs to install a rooftop solar panel.

It has raised £20m from a group of undisclosed private investors and banks to fund the initial wave of installations and has set a target of installing 2,000 rooftop solar panels within the next year.

Only homeowners with a large unshaded south facing roof will qualify for the free installation service, although the company is also offering a separate scheme, dubbed SolarShare, where a household with a roof that "isn't quite perfect" for solar panels can pay a one-off £500 fee followed by a £5 a month maintenance payment towards the cost of the panel.

Daniel Green, chief executive at HomeSun, said the availability of free solar panels will help to rapidly accelerate the rollout of rooftop systems. "Solar power is natural, free and clean – it’s the price which has slowed widespread take-up," he said. "We are changing that. Today is the beginning of a new era as HomeSun takes solar power out into the mainstream."

Under the scheme, HomeSun effectively leases roof space from domestic customers, meaning that it is responsible for the maintenance and insurance of the panels. Households can then buy the solar panels from HomeSun at any time during their life, giving the homeowner access to the income generated through the feed-in tariff.

The scheme is likely to attract plenty of interest from households keen to cut their energy bills and carbon footprint.

However, HomeSun is likely to face intense competition as growing numbers of solar firms use the feed-in tariff to introduce similar business models that reduce or remove the upfront costs for customers.

A number of firms are currently developing alternative financing arrangements that would allow customers to use low-interest loans to purchase solar panels, meaning that they can keep payments generated using the feed-in tariff which can reach around £900 a year.
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Green rule draws flak

Ontarioa s feed-in-tariff program offers a guaranteed long-term pricing structure for producers building wind farms, solar power and renewable biogas Jameson Berkow, Financial Post As investment in Ontarioa s alternative-energy sector continues apace, legal experts are warning the provincial government may be violating international trade ...

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Sunny Cornwall promises to maximise feed-in tariff returns

Cornwall-based solar panel installation firm Plug Into The Sun yesterday launched an innovative service designed to help private and commercial investors maximise financial returns from the UK's new feed-in tariff (FIT) incentive scheme while also helping to increase the country's renewable energy capacity.

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Half of UK firms mulling renewable energy investment

Almost half of British companies are considering installing some form of renewable energy, according to a new survey of over 520 board level executives that reveals growing corporate interest in the renewable energy sector following the launch last month of new feed-in tariff incentives.

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