Defining TIC

[TedM]

This has cropped up elsewhere (Navitron) so I thought I would highlight it here.

OFGEM have recently (24th July) issued a new version of their Feed-In Tariff Guidance for Suppliers version 5.2.

In this they have provided a new clarification of the definition of Total Installed Capacity (TIC) for PV systems:

3.9. The definition of TIC is given in Schedule A to Standard Licence Condition 33. TIC for Solar PV is calculated by multiplying the rated output of the solar PV modules used by the number of modules[SUB]10[/SUB]

http://www.ofgem.gov.uk/Sustainabil...icensed electricity suppliers Version 5.2.pdf

Footnote 10 is a reference to supporting information from DECC who have also 'clarified' this issue:

https://www.gov.uk/government/polic...ogies/supporting-pages/feed-in-tariffs-scheme

where they say:

How Solar PV Total Installed Capacity (TIC) is calculated in the Feed-In Tariff Scheme

• The Feed-in Tariff policy determines generation tariffs based on technology and the Total Installed Capacity (TIC) of the installation
• In the case of PV, the TIC is calculated by multiplying the rated output of the solar PV modules used by the number of modules
• We are aware that there are other ways to calculate the TIC of a system (such as using the inverter rating), however, the above method is the only applicable approach for the purposes of determining eligibility of PV installations within the FITs scheme
• We have decided on this approach as it minimises the potential for fraudulent activity and is in line with the manner with which we developed the FIT PV tariffs
• The Declared Net Capacity (DNC) is relevant in determining the route of accreditation (MCS or ROOFIT) an installation must take when applying for the FIT scheme – for further details on MCS Certification contact MCS and for ROOFIT accreditation see Ofgem’s generator guidance document

This in my, and others, opinion does not align with the definition of TIC that is used in the legislation for FiTs in that it excludes the inverter from the calculation. Additionally, in another document relating to the use of second-hand kit, OFGEM have made it clear that the inverter is included as part of a PV system (they have chosen the wording in that document extremely carefully seeking to make that definition only apply to the use of second-hand equipment).

 

[BruceB]

I do hope they come up against a customer with the balls and resources to fight them on this. It irritates me greatly when Government Departments interpret legislation as they wish it was drafted rather than as it is written.

Should I warn various of my customers..................?

 

[SolarCity]

As Bruce says, I hope someone takes them on on this. If a firm is asked the question "What is the TIC of site x?", then the answer will now be different to what it was 12 months ago. I think if we're asked we shall simply use the old definition.

 

[TedM]

I've just sent a FOI request to DECC asking them:

<snipped introductory ramble and context>

Can you please tell me:

1. On what date did DECC decide that TIC for PV should be
calculated by this method?

2. What was the precise process, including public consultation, that was
followed to come to this decision?

3. On what date did DECC first make this information available to
the general public?

4. What consultation took place with OFGEM in coming to this
decision and on what dates?

5. What consultation took place with the Microgeneration
Certification Scheme (MCS) and on what dates?

6. Whether DECC consulted with any other industry representative
bodies in coming to this decision?

7. Explain in what manner this method of calculation of TIC
corresponds with the definition of TIC as given in the relevant
Feed-in Tariff legislation, namely The Feed-in Tariffs Order 2012
and Schedule A to Standard Licence Condition 33?

 

[Gavin A]

nice one ted.

Only additional thing I'd have added to this would have been...

Provide copies of any and all documents and correspondence with lawyers or other legal representatives internally within DECC, within any other government departments or from any external companies or agencies relating to legal advice, opinions or determinations provided to DECC in reference to the how DECC's position is consistent with the Feed-In Tariff legislative framework the scheme operates under.

or words to that affect - esentially we need to see their legal guidance, or possibly to find out that they actually haven't taken legal advice on it.

 

[Worcester]

Thanks TedM good questions, espically as I strongly believe that just because you live further north or have a roof that doesn't face south you shouldn't be penalised. The legisilation as written in my mind is quite clear as it seperates the source of energy from the actual power production.

This is one of those that definitely needs challenging though there are probably not enough siginificantly affected people with sufficient funds to see it all the way thorugh (need a retired QC that it affects to challenge it )

@TedM Any help you need, just holla.

 

[Gavin A]

Having already spent around £2k on legal advice on this issue, and having a formal legal opinion on it... I'd chip in towards legal costs for a judicial review.

I think I got quoted about £10-12k for judicial review on top of the money already spent last year, so 10-12 of us at £1k each should cover it.

I'd wait to see the response that Ted gets first though.


eta - erm, actually we might end up liable for decc's costs if we lost, can't entirely remember.

 

[TedM]

I didn't think that a FOI could ask to see internal documents. I'll check and maybe use in any follow-up.

DECC have 20 working days to reply, so by 9th September.

Under judicial review you can ask for a protective costs order, but this doesn't have to be given. The downside is that this limits what the other side pays towards your costs if you win, IIRC.

Gordon, I presume you have contact with a retired QC? Would it be worth making a preliminary enquiry?

 

[The Solar King]

Part of this is due to the danger of twitter.


Someone on a different forum mentioned they tweeted Ofgem asking was it the panels or the inverter. Of course they responded it was the panels. They subsequently asked where this was written down to which they responded that DECC would issue something shortly, which as Ted has raised, they did. The tweets were in mid June and DECC issued their policy statement sometime around the 25[SUP]th[/SUP] June. This was a stupid approach from those involved as it has led to entrenched positions.



I have raised this through my trade body, the STA, and am awaiting a response from those who can best take the matter forward. Here is what I wrote to the CEO of the STA.


“There has been comment and discussion about Total Installled Capacity and Declared Net Capacity.
It mainly effects G83 installations and to a lesser extent smaller G59 ones. To put some perspective on this here is the output in kWh/kWp installed of an ideal system unshaded facing due south at 40deg tilt taken from the new MCS estimation method in different locations.

City/Zone	kWh/kWp/a	FIT Payment/a
Plymouth	1093	£162.86
Southampton	1023	£152.43
London	985	£146.76
Birmingham	937	£139.61
Newcastle	907	£135.14
Glasgow	835	£124.41

Each would cost the same to install but the return is restricted if capacity is limited by the notion of Total Installed Capacity as opposed to Declared Net Capacity. If DNC is accepted as the measure, it is possible to go some way to compensate for location. The same is equally true for orientation and shading. There are a large number of properties where increasing the number of panels will improve output (and this is an additional cost), but will not effect the DNC as the limitation of the inverter will not be exceeded. Installations are just as valid in more northerly areas as the south, but leveling the playing field a bit would help.

I feel there does need to be a caveat in all these things and it would be this: To avoid people designing bonkers systems in an attempt to circumvent the spirit of using DNC responsibly, a ceiling should be set on the payment of FIT at the output of an ideal system in Zone 4 (south west England). Designers and installers could then use their ingenuity to cost effectively maximise output for systems in other parts of the country, and where there are other limiting factors.

What do we need to do to take this forward?"

We are in Edinburgh. An ideally sited installation here will produce significantly less than an identical installation in Exeter. Don't bother getting in to temperature compensation as it doesn't make that much difference. We could happily fit an extra two or more panels without falling outside the voltage range of the inverter and so put our customers in the same position as those in the south of England.

An ideally sited East West configuration produces less than a south facing. There is often roof space to fit additional panels to compensate.

Where shading exists, additional panels could be used to compensate if this was viable.

In none of the above scenarios will the 16amp limit per phase under G83 be affected as it is the inverter that limits output. When I have modelled all of these there is no indication of clipping or other adverse effects.

With regard to higher output panels, I know exactly what will be happening. They will all be registered as 250W to avoid any difficulty. Once the panels are on the roof who is going to know any different? It would have to be a sharp assessor with great cooperation from an installer to follow an audit trail to prove otherwise.

I will post any comments or further information I get.

 

[TedM]

Thanks for the tip-off. Here is the Twitter evidence:

 

[Gavin A]

so they're admitting that there was no published guidance to this effect until that point.

They're screwed if they attempt to apply this retrospectively then, assuming someone takes legal action.

 

[BruceB]

Anything back from DECC yet.....?

 

[TedM]

When I had received no reply by the 28 day deadline I poked them and was told they had no record of my first email request. They are now looking at it so back to waiting again with a new deadline of 8th October.

You can see a thread for this FOI request here https://www.whatdotheyknow.com/request/determination_of_method_of_calcu

I did ask the administrators of that site (from which you can easily fire off FOI requests) to see if their server logs can provide confirmation that the original email was actually sent (it is supposed to happen automatically when you save a request) but I have had no reply from them either!

 

[Worcester]

I am of the belief that they are twisting their own rules here with this definition, as it clearly states in the Act that the power source is separate from the generator.

And it should be fair to adjust your power source depending upon your location. It really needs someone with a case (and has the ££ and time) to challenge it.

Keep going Ted

 

[TedM]

Here's the reply from DECC.

1. On what date did DECC decide that TIC for PV should be calculated by this method?

DECC decided to clarify this issue in February 2013, so that clear guidance could be given to stakeholders in regards to determining the TIC for PV installations under the Feed-in Tariff scheme. This clarification is in line with the definition within FiTs legislation and the manner with which we developed the FiTs PV tariffs.

2. What was the precise process, including public consultation, was followed to come to this decision?

As this was a clarification of the existing policy intent rather than a new policy or decision, no public consultation was considered necessary. DECC drafted the text on how to determine the TIC, in consultation with OFGEM and the MCS Licensee, before publication.

3. On what date did DECC first make this information available to the general public?

The calculation for determining the TIC was published on the DECC FiTs webpage on 26 June 2013.

4. What consultation took place with OFGEM in coming to this decision and on what dates?

DECC had regular meetings with Ofgem at which this issue was discussed during spring 2013. Ofgem was consulted on the draft text on 22 May 2013.

5. What consultation took place with the Microgeneration Certification Scheme (MCS) and on what dates?

The MCS Licensee raised this issue with DECC in February 2013 and attended a meeting with them and Ofgem in March, with follow-up discussions in April. The MCS Licensee was consulted on the draft text at the same time as Ofgem on 22 May.

6. Whether DECC consulted with any other industry representative bodies in coming to this decision?

As this was not a new decision, but clarification of policy intent, in line with the manner with which we developed the FiT PV tariffs, if was not considered necessary to consult industry bodies.

7. Explain in what manner this method of calculation of TIC corresponds with the definition of TIC as given in the relevant
Feed-in Tariff legislation, namely The Feed-in Tariffs Order 2012 and Schedule A to Standard Licence Condition 33?

DECC's view is that the method of calculating the TIC by multiplying the rated output of the solar PV modules used by the number of modules (as set out in the update provided on the DECC FiTs webpage on 26 June 2013) is consistent with the Feed-In Tariffs Order 2012 and the Feed-in Tariffs: Modifications to the Standard Conditions of Electricity Supply Licences (No. 4 of 2012). This approach also has the benefit of minimising the potential for fraudulent activity to take place. Using alternative methods of calculation (for example based on inverter sizing) creates an increased risk of fraudulent changes to the system to take place following certification. DECC takes mitigation of fraud risk extremely seriously and acts to reduce such risks as they arise.

 

[Worcester]

@TedM many thanks for that, based on those responses. - which in my book doesn't properly relate to the TIC as defined in the legislation - interesting to note they don't quote the words from it I reckon it still leaves them open to legal challenge if anyone has the wherewithal or possibility of significant loss to do it, especially if they decide to try to apply this retrospectively.

 

[Gavin A]

I'd think that the very process of them issuing new guidance where none had previously existed would mean that it would obviously not be legal for them to apply it retrospectively.

 

[BruceB]

Ted asked them to explain how their definition of TIC corresponds with the legal definition of TIC (to paraphrase) and effectively what they are saying is that it just does because we say it does. It is an arrogant reply.

I suppose the next question is what do they intend to do when they discover an 'incorrect' TIC. Options would include:
- Ignore as a historic anomaly
- Use 'correct' TIC going forward
- Backdate 'correct' TIC and clawback overpayments
- De-register installation from FIT database
The latter options would be painful.

One of my customers has already been discovered with an 'incorrect' TIC. It was an east/west/south arrangement on a new-build following a demolition. I had been up front on the number of panels with the DNO because there has been a discussion about the 16A limit, which I convinced them we would remain under wherever the sun was. His FIT provider, British Gas, recently asked him in a routine audit how many panels he had of what power. He answered truthfully and it was not an issue because the new build sub 4kW rate and 4-10kW rate were the same, so no monetary implication. The MCS register was corrected.

I am wondering what those of you with customers now in an uncomfortable position are going to do? Do you warn them off? Perhaps give them the gist of the FOI reply? The last time I looked the route through the various complaints procedures, ombudsmen and to law were complex and different depending on whether you were an end customer or an installer.

@Gavin, I suspect they would not agree with your point. Their whole thrust is that this is NOT a change in policy or rules, hence no formal consultation. Therefore they will feel free to apply the 'existing' rules 'correctly'.

It is all very messy. Not sure what, if anything, to do.

 

[TedM]

One of the critical facts for me is the answer to 5.

It appears from this that it was actually MCS who raised the issue in the first place. There must have been a reason for that. And why have MCS decided not to issue any notification to their members about all this?

Under the FOI I had previously thought that asking for a copy of any legal advice received was 'out of bounds' but, having looked in to it in more detail, it seems that this generally only applies to legal advice given to ministers on policy matters or where any (non-governmental) 'third party' involved has a reason to expect confidentiality. I can also ask for copies of minutes or emails if that might help.

 

[Gavin A]

10-15 installers chuck £1k in a pot, or at least pledge to if any of them have customers who're threatened with this being retrospectively applied.

Then ensure that Ofgem and DECC are aware that if they attempt to retrospectively apply this new guidance, then they will be taken to judicial review on the entire issue, and we have the means to do it.

I already have the legal opinion to accompany such a threat.

It's also possible that mine, and maybe others PI insurance would cover the costs.

 

[SolarCity]

The logical thing for Ofgem and DECC to do would be to ignore the current anomalies as they are clearly problematic legally going by the ambiguous Ofgem definition of TIC.

As Bruce points out, these two options: - Backdate 'correct' TIC and clawback overpayments - De-register installation from FIT database would be a nightmare. Presumably there would be enough people affected by enough money for them to consider legal action. And presumably Ofgem and DECC would anticipate this problem.

 

[BruceB]

To pick up Ted's question, MCS had a couple of drivers making them ask the question I suspect. DECC asked them to include the TIC field so they were probably asked by a few installers what to put there. Also I think MCS was one of the organisations Gavin asked when he had a customer involved in a dispute on the TIC point.

It is important to remember that MCS have no particular axe to grind. They are just a firm of consultants running the scheme and trying to make money. They will be asking any questions and taking whatever action is necessary to protect their commercial position.

The guidance they issued on 29 Jan 13 is attached. I cannot find anything subsequently.

Their current help document (v 5.1) for the database on their website offers nothing more of any substance.

View attachment Important Updates to the MCS Databasex.pdf

 

[BruceB]

Insurance could be a tricky point. As a general rule you normally have to inform your insurance company as soon as you become aware of circumstances that might result in a claim. Often the terms of a policy would mean you must take no action which could prejudice the position of your insurance company. Although instinctively an installer might feel he is on the side of the customer on the TIC issue, any initial dispute is likely to be between the customer and the FIT supplier, at arm's length from MCS/OFGEM/DECC. If an installer becomes involved it could be because the customer has been through the customer side processes to resolve the dispute, failed, and then decides to make a claim against the installer, pitting the installer against the customer.

Quite when installers should talk to their insurers I do not know.

It would be nice to know what DECC intend to happen when installations are found with a 'incorrect' TIC as I outlined in an earlier post. It would not surprise me to find that they shrug their shoulders and say it is a matter for each individual FIT supplier.

 

[Gavin A]

To pick up Ted's question, MCS had a couple of drivers making them ask the question I suspect. DECC asked them to include the TIC field so they were probably asked by a few installers what to put there. Also I think MCS was one of the organisations Gavin asked when he had a customer involved in a dispute on the TIC point.

View attachment 20935

correction - my customer contacted EST before contacting me, who then contacted MCS and potentially set this whole process in motion - well, Julian also had a situation at the same time and pretty much took over the discussions with Ofgem.

I had a feeling this would come back to bite us again at some point if we didn't nip it in the bud then.

 

[TedM]

I'm happy to follow this up with DECC via FOI if there is any more information you think will assist.

It may even be appropriate to go direct to DECC (disregarding the FOI) and attempt to start a dialogue. The FOI response I have is from a James R. Marsh who describes himself as "Policy Adviser, Feed-in Tariff team" at DECC.

 

[TedM]

These are his contact details (will save me digging through documents if I need to find it again)

[FONT=Century Gothic, serif]TelNo: 0300 068 6168
Email: [email protected][/FONT]