Britains energy ministry submits new plan to cut feed-in tariff

19.01.2012: The UK Department of Energy and Climate Change (DECC) has announced contingency plans to delay the cut to the country’s solar feed-in tariff (FIT), in the event that it loses a legal case at the Court of Appeal about the tariffs. DECC wrote in a statement that it is laying before Parliament draft license modifications that make provisions for a reduced FIT rate from April 1, 2012, onward for new photovoltaic (PV) installations with eligibility dates from March 2012 or later. DECC Minister Greg Barker said, “I know this is a difficult time for the sector and I want to do as much as I can to end the current uncertainty created by the legal challenge. We must reduce the level of FITs for solar panels as quickly as possible, to protect consumer bills and to avoid bust in the whole feed-in-tariff budget." The Court of Appeal recently postponed making a decision on the DECC’s challenge to a December High Court ruling that questioned the legality of the government’s proposed changes to the solar FIT scheme. The High Court said that bringing forward the cutoff date to Dec. 12, which fell in the middle of an ongoing public consultation on changes to the FIT scheme, would be unlawful. ... Source: DECC; summary: PHOTON

More info:
http://www.decc.gov.uk/en/content/cms/news/fits_jan12upd/fits_jan12upd.aspx
http://www.decc.gov.uk/en/content/cms/news/wmsch_fits/wmsch_fits.aspx

Feed-in tariff rates will not be further reduced before April 2012

At a meeting with the Department of Energy and Climate Change (DECC) the BPVA were told that there is a “high level of certainty” that the proposed feed-in tariff rates of 21p and below will remain unchanged until April 2012. This news casts aside fears that Government will further reduce the already slashed feed-in tariff rates for solar before April 2012.

On October 31 this year DECC revealed plans to reduce the feed-in tariff incentive rates for solar installations below 250kW. At the residential level, these cuts would go as deep as 50 percent, chopping the rates down from 43.3p per kilowatt hour down to just 21p. These new rates were said to take effect from April 2012, with a cut-off deadline of December 12 (today) for installations which were to receive the higher rates – despite the fact that the consultation would not end until December 23.

Outrage begun to spread through the UK solar industry as the legality of imposing an installation deadline weeks before the consultation on the policy ended, prompting yet more uncertainty in the already concerned industry.

While there was a great amount of backlash in response to the proposed feed-in tariff cuts, many found that the new rates were acceptable, especially with the falling cost of solar photovoltaic technology. However, those rushing to install systems before the cut-off point begun to worry that the incentive rates could again be reduced, with the principle ‘nothing is certain’ saturating the market.

However, we can reveal today that the Department has sought legal advice on how it can now proceed. According to our source, the Government hopes to respond to the consultation in January 2012 and will need to do so by February 8, 2012 at the latest, if rates are to be changed from April 1, 2012 as proposed. Government is aware that the industry needs certainty as soon as possible and says that it “will strive to announce a decision quickly.”

Government would “almost certainly” not be able to set a tariff below 21p (or the other tariffs proposed in the FiTs Phase 1 consultation) without a further consultation. If this were the case, changes could not be implemented on or before April 1, 2012, as there is simply not enough time to launch a new consultation between now and then.

This news provides at least four months of assurance for an industry which has to date experienced nothing but uncertainty. The ongoing level of tariffs for solar PV, together with proposals for a cost control mechanism for feed-in tariffs, will be part of the feed-in tariff Phase II consultation, which will be published some time in January 2012.

Source: BPVA

FITs cut "unlawful" says Judge

In a dramatic judgement yesterday at the High Court, Mr Justice Mitting found Government Ministers had acted unlawfully in cutting feed-in tariffs from the 12th December.  After a two day hearing closely examining the law, he decided that Ministers were not following the correct legal process, and were wrong to reduce tariff rates without first laying regulations before Parliament.

Mr Justice Mittings finding was so emphatic that he went on to refuse the Government the right to appeal, saying they stood little chance of overturning it.  This does not stop the Government asking the Appeal Court to hear their case - but in an unusual move Mr Justice Mitting even reduced the time available for them to make this request, saying they must file legal arguments with the Appeal Court by 4th January.

As things now stand therefore, the "eligibility date" of 12th December is unlawful, and Government will have to table new proposals.  A new date is likely to be around the end of February - this would give time for the 40 day period of consideration the law requires which Ministers ignored this time around.  However if the Government do appeal the finding - as they have said they will - and successfully overturn it, they will be able to re-impose the 12th December date.  This means that while there is a good chance of a later eligibility date, it will not be possible to guarantee the higher rates to customers until the legal process has finished.

Clearly this adds to the uncertainty for the next few weeks - but the longer-term effect of holding the Government to account and insisting on due process ought to reinforce the demands that Government must never again throw the solar industry - or indeed any part of the new environmental industries - into the kind of turmoil solar has faced in the last couple of months.  The finding is also intensely embarassing for Ministers, as it once again throws the spotlight on their botched handling of the entire policy.

What is now needed is for Ministers to take the criticism on the chin, and start afresh from here, drawing up a sensible path forward that takes solar from current levels of subsidy to grid parity in a predictable way that allows the industry to develop.  It is time for Ministers to recognise that the fact solar prices have fallen faster than expected is a good news story, not a reason to shrink the industry.  It is disappointing that despite the Judge warning they are unlikely to succeed, Ministers are still proposing to drag the process out further - but it is worth keeping fingers crossed that a break over Christmas, and some fresh legal advice will cause them to think again.  They can be assured that if they take the sensible path, the solar industry will be with them.

UK government seeks appeal against High Court ruling

04.01.2012: Yesterday the UK Department of Energy and Climate Change (DECC) was to submit the grounds for an appeal against a ruling on solar energy by the country’s High Court, according to a DECC spokesperson. Last month, the High Court concluded that cuts to the UK’s solar feed-in tariffs were illegal – a decision that followed a legal challenge by the Friends of the Earth association and the solar firms HomeSun and Solarcentury. Friends of the Earth stated that an appeal by the government “means solar businesses can't be sure what tariff payment solar projects installed now will receive” and added that “the uncertainty is crippling businesses and costing jobs.” A DECC spokesperson says that the government hopes it can secure a hearing “as soon as possible” and notes that the government “disagrees with the court's decision.” Friends of the Earth is also calling on the government to increase the budget for solar in order to allow more people to benefit from the technology. … Source: UK Department of Energy and Climate Change, Friends of the Earth, PHOTON; Summary: PHOTON

More information at:

www.foe.co.uk
www.solarcentury.co.uk

Declining solar module prices offer great opportunities in endangered UK PV market

London, UK, 21 June 2011 – Keynote speakers from “The Solar Future, UK” have shared their insights into the future of the UK solar photovoltaic (PV) market, following the Government’s announcement to slash feed-in tariff (FiT) rates by up to 72% for solar arrays over 50kWp.

Commenting on the current state of the UK solar PV market Edwin Koot, Chief Executive of Solarplaza, said: “There are two sides to the UK market today: a buoyant market for domestic and smaller commercial installations that is very competitive, but which will undoubtedly be subject to a reduced tariff from next year; and a large-scale market that’s in a state of shock and depression. But with module prices falling so rapidly, the economics of even large-scale projects can change very quickly. The UK is an interesting place to be involved in solar right now. Manufacturers, installers and investors need to be prepared to react quickly to the opportunities that arise, and to do that they need a very good understanding of the business context.”

Responding to the outcome of the fast-track FiTs review, Shadow Energy Minister Huw Irranca-Davies said: “The announcement on the FiT smacks of a Government strong on words, lacking in action and at odds with its stated aim of being ‘the greenest Government ever’. Minister Greg Barker’s decision to go ahead with the proposed tariff reductions for solar PV installations larger than 50kW hammers a nail into the coffin of many future modest medium-scale community, school and hospital schemes, risking thousands of jobs in an industry that was beginning to flourish, and shows there is no coherent strategy for decentralised energy.”

Meanwhile Ray Noble, solar photovoltaic (PV) specialist at the Renewable Energy Association, blames the Treasury for the outcome of the review. He said, “The UK Government appears in total chaos relating to the future of solar energy all as a result of calamitous mistake by DECC in its previous Comprehensive Spending Review submission to the Treasury. The Treasury will not allow DECC to correct its error and this could seriously affect the rate of growth of solar in the UK. The solar industry is calling on the Prime Minister to intervene.

“The solar industry is reducing prices significantly and is playing its part in moving solar energy in the UK towards being a mainstream electricity generator, the latest predictions show grid parity could be reached before 2017.”

Speaking of what needs to happen now, Juliet Davenport, CEO and founder of 100% renewable electricity supplier Good Energy, said, “Good Energy thinks the Government needs to do a lot more to recognise the important role solar has to play in Britain’s future energy mix. One of the casualties of the FiT review will be community-sized schemes, as well as others involving public buildings such as libraries, schools and hospitals, which all have the potential to contribute to a low-carbon future. Other countries with a similar climate to the UK, such as Germany, have placed solar at the heart of their renewable energy policy and Britain is in danger of being left behind. What is important now is that the Government learns the lessons from the FiT review and develops a clear strategy to support decentralised energy in the UK.”

“The Solar Future, UK” takes place on 29 June at Central Hall, Westminster. It will bring together more than 150 industry experts to analyse the future of the UK solar PV market; featuring presentations from DECC, Ofgem, the NFU and many others. For more information and to register, please visit: www.thesolarfuture.co.uk/registration





Notes to the editor
Solar PV installations under 50kW will remain unaffected, but for larger installations, the tariffs are as follows:
•    >50 kW – ≤ 150 kW – 19.0p/kWh
•    >150 kW – ≤ 250 kW – 15.0p/kWh
•    250 kW – 5 MW and stand-alone installations – 8.5p/kWh


Solarplaza (www.solarplaza.com) is an international platform which organises top-level conferences, seminars and trade missions around the globe. Its mission is to empower the solar industry. The platform www.solarplaza.com provides and shares knowledge, networking opportunities and information. Solarplaza firmly believes in a renewable future: a future built upon the power of solar energy. Since the founding of Solarplaza in 2004 it has built up an extensive network of valuable friends, associates, business contacts and solar experts.