Confusion, thy name is Feed-in-Tariff. For anyone who's been blissfully unaware of the feed-in-tariff and the fiasco that currently surrounds it; I envy you. For those that know of it but need clarity; read on. For those that are unaware but intrigued; also read on. For those that are sick to death of it, comment below.
The feed-in-tariff is a scheme designed to encourage people in the UK to generate electricity via their own means, through Solar Photovoltaics, Wind Turbines, Hydro-turbines or even Anaerobic Digestion (look it up). In short, payments are made to micro-generators of electricity for each unit they produce. There is a tariff of rates set by the Department of Environment and Climate Change (DECC), pricing the units according to the type and size of installation.
In the UK the baseline tariff for Solar PV was set at 43.3p per unit, almost 4 times the market rate for electricity. This high subsidy, along with falling material and installation costs caused a boom in installations that the UK Government tried to dampen by reducing the baseline tariff rate to 21p/unit after making an announcement at the end of October 2011.
Below is a timeline showing what happened next.
The feed-in-tariff is a scheme designed to encourage people in the UK to generate electricity via their own means, through Solar Photovoltaics, Wind Turbines, Hydro-turbines or even Anaerobic Digestion (look it up). In short, payments are made to micro-generators of electricity for each unit they produce. There is a tariff of rates set by the Department of Environment and Climate Change (DECC), pricing the units according to the type and size of installation.
In the UK the baseline tariff for Solar PV was set at 43.3p per unit, almost 4 times the market rate for electricity. This high subsidy, along with falling material and installation costs caused a boom in installations that the UK Government tried to dampen by reducing the baseline tariff rate to 21p/unit after making an announcement at the end of October 2011.
Below is a timeline showing what happened next.
The FiT Fiasco: A Timeline on Prezi
All this means that as we stand Solar PV installers are able to sell and install PV systems before
3rd March 2012 based on the promise of at least 21p per unit for a fixed period of 25 years. However, should the government lose their supreme court appeal (as is very likely) then this will be increased to 43.3p per unit once more for those systems installed, certified and registered with an FiT provider before 3rd March 2012.
Those commentators with a touch of cynicism in their blood may argue that the government know only too well that they will lose the appeal and are using the confusion caused by it to protect their budget in the short run, or even that the whole thing has been orchestrated from the start to reduce demand in PV until April 2012.
In the meantime the livelihoods of over 20,000 people are under threat as suppliers, installers and potential customers have no idea what level of subsidy will be paid for systems installed between 12/12/11 and 03/03/12.
Are you interested in Solar PV but off-put by the market uncertainty? Perhaps you agree with the government's tactics, or beleive they have a genuine case. Whatever your thoughts, please feel free to tap them through your keyboard and into the box below.
I think you're absolutely right, the Government will lose, and are using it to create confusion??!! However, they're not as clever as they think?? As many consumers are seeing through this, and going ahead with installs as quickly as they can... Let's be honest, even 21p gives a great rate of return (10%ish), so if they get 43.3p, then they're laughing!!!
ReplyDeleteIf the Government had done it right in the first place, all this would not be happening...
Glad to see Huhne go today... Barker next??
Hi Barry. This whole thing moves so quickly that the whole landscape has changed again (already) and I'll be making some additions to the Prezi and an update to this blog. Yes 21p is good and so they want to slash it again! We are going to be rather busy for the next few weeks and hectic between April and July.
ReplyDeleteEd Davey starts with a clean slate and seems a good enough chap, Barker has to go - his arrogance is astounding and he's cracking under the pressure (referring to Milliband by name in the commons for example).