Can the Government stop the FITS payments??

[grandfortune]

Hi all,

got a few people interested in solar PV, but one is worried that the government will just turn round in say 3 yrs time and stop it all as its costing to much, can they do this or is there some sort of agreement they cant go back on. i must admit they'll do anything these days

Cheers Grand

 

[SRE]

It could happen but it's extremley unlikely, they'd have to go through the whole political process in the Commons and Lords to have the changes implemented. TedM or Worcester will ahve the right legislation to hand ...

 

[Worcester]

They can do whatever they like!

The payments are embodied in the Finance Act 2007, and the Energy Act 2008, neither determine the level of payments / banding etc that's why they can do the review.

Levels and bands is covered by powers confered on the Secretary of State by the Energy Act 2008.

As allowed for by the provisions of the Energy Act 2008 (s. 41–43)8, the Feed-in Tariff (FITs) scheme will be implemented by amendments to standard conditions of supply licences under section 6(1)(d) of the Electricity Act 1989. In accordance with the process, a set of draft licence modifications (Conditions 33 and 34, contained in the new section C of the SLCs), made on 31 March 2010, was laid before Parliament for forty days. The final signed licence modifications can be found below.

So theoretcially they could be stopped at any time, by reducing the rate to zero, or by a new Act.

However politicians are employeess (of you and me) and they like to get re-elected, else they'll have to get a real world job.

I would have thought that they would have another Tolpuddle Martyrs situation on their hands if they tried to!

 

[TheMightyGusset]

Hi all,

got a few people interested in solar PV, but one is worried that the government will just turn round in say 3 yrs time and stop it all as its costing to much, can they do this or is there some sort of agreement they cant go back on. i must admit they'll do anything these days

Cheers Grand

Basically, once you've signed up then your FITS payments are guaranteed for 20 years and cannot simply be cancelled, the money to pay for it has been ringfenced and cannot be taken away.
The system can however be reviewed, and the terms and conditions revised for any new takeup. This will happen.
The best advice currently is to sign up now, as the payments are unlikely to be any higher than they are now.
The current review put a stop to large businesses setting up 'solar farms' and exhausting the FIT budget, which was always intended more for householders and microgenerators.

 

[SRE]

Sorry I have to disagree. Chris Huhne has said he is unlikely to change tariffs retrospectively - that doesn't mean he or subsequent governments won't if pushed to do so - it's happened in other countries and it's not impossible that it won't happen here. We explain this to every customer and they are all more than happy with the slight risk that the tariffs may change.

 

[Markc]

Show me a investment with out risk?

The bigger picture is beyond what the FITs rate is or its duration. The bigger picture comes from UK industry, Imports, taxes, employment and our legal responsibly to reduce our nations CO2 emissions. What goes on beyond our sight in Government is unknown and we will have little say or effect to it.

 

[TheMightyGusset]

Chris Huhne has said he is unlikely to change tariffs retrospectively - that doesn't mean he or subsequent governments won't if pushed to do so - it's happened in other countries and it's not impossible that it won't happen here.

The FIT Scheme is not funded by the Government but by the Power Companies, who are obliged to pay the tariffs following legislation brought in by the Government.
The Government is hoping that up to 750,000 homes throughout the UK will have Solar PV systems installed over the next 10 years.
Once this target has been met they may stop the scheme, however if you have already signed on you will continue to receive your FIT payments.
Yes, tariffs will reduce over time as more people join the scheme, but the payments that customers have already signed up for are ring-fenced and protected.
Tell me which countries have reduced FIT payments for customers who have already completed their installations and signed up to the scheme ?

 

[malcolmsanford]

Exacly unless the 95% of the non PV owner consumers, dont kick up a fuss over having to pay a higher energy bills to subsidise this snake oil industry then why would the government cut it, after all it is not costing governemt, but the rest of the UK
If with the latest annoucement of huge energy increases announced by BG, and the country realised that there is a levy on thier bills that pays people to fit PV, and started to demonstrate against it, then the industry might have a concern.

All the while that peoples eyes are not on this levy, then the FITS are safe.

 

[SRE]

I fully understand the strategy - do you remember when pensions were linked to inflation - and then cut????

I'm not saying it will happen but it's plausible that it could be done if the government chose to do so. If you're in the industry and don't know that the utility companies are paying the FIT then you haven't done your homework - that doesn't mean that the government can't change their mind. Legislation can and has been changed many, many times. It's only fair to the customer that they understand the slight risk they take - our customers appreciate the honesty.

 

[Worcester]

Most people don't realise it, however the FIT levy is very small compared to the ROC levy, that's the one you pay for all the rest - the large scale renewable, the marching massive hoardsof onshore and offshore Wind Turbines, offshore tidal and hydro etc, FIT is the baby of ROC, and the ROC element of the green surcharge on electricity bills is far far higher that the FIT element ever will be.

The purpose of the FIT more than anything else was to raise awareness, and get everybody doing their bit, at the same time it helps the government talk about 'green jobs' growing sectors, etc etc.

They CAN cut it, they are very unlikely to.

 

[Electricalserv]

Remember the solar electric powered cars in the US???? Took them all of the road and crushed them!!!!

Because they were a threat to the oil companies and alike. A huge backhander to American government officials the oil barons.

I guarantee if the solar becomes cheap as chips it will get stopped

 

[Markc]

The FIT Scheme is not funded by the Government but by the Power Companies, who are obliged to pay the tariffs following legislation brought in by the Government.

I feel a better statement would be "The FIT scheme IS funded by Government but THROUGH the power companies"

As the FITS comes form the tax funds levied against them by Government it's from a pot already set to be paid rather than coming out of profit or loss account. After all these companies are here to make money. This isn't as short sighted as what "we" would consider for our own companies. They will be looking into investment spanning years in advance and beyond my years remaining on this rock!

The truth of looking at FITs from one aspect is very short sighted. There is much more behind it. The argument about taking money form the poor or an increase in bills to fund FITs it ridiculous. The suppliers are actually making money from FITs. They will sell your export to your neighbor at a inflated price (Export 3p unit rate average 13p! +10p profit if you consider they have spent nothing on the generation of that kWh!)

The profit for investment NEEDS to go into our network inferstructure, power stations, nuclear and renewable sources. We as a human have a moral and legal obligation to reducing carbon emissions don't forget.

To angle some of this JUST towards PV is also short sighted after all the FIT scheme encompasses other renewable technologies don't forget.

The experience from the continent in similar schemes has seen more positives than negatives. It has also seen well above the national average in growth compared to other industries bring in taxes for employment, export, imports etc etc.

The FIT scheme is here now, in review next March and in my opinion here to stay. Do I enjoy reports from my customers on how well their system is going and the cheques they are getting? to right. Do I think my dear old Gran in her council flat burning one lump of coal a month to keep warm is funding that? Nonsense!

 

[malcolmsanford]

Mark how big would your customers cheques be without the subsidy of the FITs, How well did these instalations fair over the long winter we just had in the UK.

What would you say was an average yield of exported power back into the grid from Dec-March from a typical say 3KWp System that is in your area.

 

[Markc]

Mark how big would your customers cheques be without the subsidy of the FITs, How well did these instalations fair over the long winter we just had in the UK.

What would you say was an average yield of exported power back into the grid from Dec-March from a typical say 3KWp System that is in your area.

You and I have had this conversation before Malcolm and I do agree the FITs is the intensive and with out it the system would take to many years to pay back, BUT pay back it will and again this is the same of any renewable source as they to fall in the FIT scheme.

I don't have figures to hand to answer your second point but what I do know is I have seen a 0.5Kwp system turn the meter backwards in January just gone. It was mine!

 

[malcolmsanford]

Must have been a sunny day mate without washing being done but fair enough that is impressive. hope the DNO are not reading this mate as they will be around tomorrow to change that meter.

Yes I enjoyed our bantonage last year, and understand that quite a lot of installers do believe in their product and I hope for the UK sake renewable energy will become viable, I know that someone as to pay for it, I just dont like the way it is set up for now.

As we have seen the government have capped 50kw+ FITs in order to stop basically racketeering for the want of a better word. It is getting bad press in many ways becasue it is looked upon that a strata in society that can afford 15-20k are going to make a profit out of it, and no matter how we dress it, the FIT is subsidised by a levy on everyones energy bill.

But it is nice to see Mark that we can still discuss this in an intelligent way, Your the turkey who will not vote for Christmas and Im the farmer with the knife.

 

[Markc]

Must have been a sunny day mate without washing being done but fair enough that is impressive. hope the DNO are not reading this mate as they will be around tomorrow to change that meter.

Yes I enjoyed our bantonage last year, and understand that quite a lot of installers do believe in their product and I hope for the UK sake renewable energy will become viable, I know that someone as to pay for it, I just dont like the way it is set up for now.

As we have seen the government have capped 50kw+ FITs in order to stop basically racketeering for the want of a better word. It is getting bad press in many ways becasue it is looked upon that a strata in society that can afford 15-20k are going to make a profit out of it, and no matter how we dress it, the FIT is subsidised by a levy on everyones energy bill.

But it is nice to see Mark that we can still discuss this in an intelligent way, Your the turkey who will not vote for Christmas and Im the farmer with the knife.

I've been called many things but Turkey is the first! LOL. Nice one!

For once (and I hope you're sitting down!) we agree on something. The 50kW+ systems. Looking into PV farms and seeing EDF as a co-owner partner who will then pay themselves the FITs made my blood boil.

And as for my meter...mum's the word, you ain't seen me right! (by the way it did take a minute to fully rotate backwards and we had just stepped in from a weekend away so NOTHING was on other than fridge and boiler.

 

[malcolmsanford]

ome on Mark we are going to have to stop agreeing on things mate ...................people will talk

 

[Markc]

ome on Mark we are going to have to stop agreeing on things mate ...................people will talk

Normal service will be resumed shortly........

 

[Worcester]

I feel a better statement would be "The FIT scheme IS funded by Government but THROUGH the power companies"

@Markc

Actually it is funded by the consumer (all consumers), dependant upon their level on comsumption, the government never sees the money.

The Electricity companies have a duty to meet Renewables energy generation targets (not a C02 reduction target - this is one of the misnomers). Renewable Energy Generators are gauranteed an income either in the form of a Renewable Obligation Certificate (which are commercially tradeable) or a FiT. In order to pay for this they are allowed to levy an additional charge on the electric bill to all consumers (business and domestic) if one particular electricity provider has paid out more than their share of ROC / FiT then there is a levelisation process to balance it out so that no individual one is especially penalised.

This has been going for years with the ROC's, FiT is just the small end scale that everyone is starting to see / have visibility of. I've been at the sharp end of the ROC debate for a few years now and at the top end the politics is even worse!

There is a potential fuel poverty trap here, whereby those that can't afford to buy PV, effectively pay more (buit that's another politicial debate!) However this should all be levelled out with the new Green Loan scheme coming in next year. (More paperwork!

 

[malcolmsanford]

Worcester I didnt think that this new green loan covered PV as such, but was for insulation, boilers and such, being over here I may have got that wrong.

 

[Worcester]

There debate that I listened to and the articles that I've read are a bit vague, however I had a meeting with one very large City Council the other day that is looking to encourage thousands of people to take up PV and based on the due diligence that they had done (months plus negotiations with Govt Big Wigs) , they were pretty convinced that it can be. It will completely scupper their plans if it can't, and they have spend tens of thousands on pulling their plan together..

 

[Markc]

There debate that I listened to and the articles that I've read are a bit vague, however I had a meeting with one very large City Council the other day that is looking to encourage thousands of people to take up PV and based on the due diligence that they had done (months plus negotiations with Govt Big Wigs) , they were pretty convinced that it can be. It will completely scupper their plans if it can't, and they have spend tens of thousands on pulling their plan together..

It would be a kick in the shins for the PV industry if they didn't include it. But yet again unless you're a plumber these things really come our way. Boiler scrapage scheme...

 

[malcolmsanford]

I remember reading it on Yahoo, it was somehow linked to your utilities bill and the loan stayed with the house, typical Ive scoured Yahoo looking for this and cant find it, it was only this week as well.

I cant recall though seeing anything about PV to be honest

 

[SRE]

I'll be interested to see what happens - the local authorities aren't always that switched on - sorry for the pun. I worked in one for many years in the domestic energy field and they type of conversations that happen on this forum are way in advance of the awareness of the vast majority of the LA's I worked with. To give you an example I talked to someone recently who has a countywide remit for developing a fuel poverty strategy who thought that 14k was a ridiculous sum of money to pay for a 4kwp system and that he would be ripped off if he paid that. When I asked him how much he thought it should be the answer was 6k because some muppet in the industry who was trying to impress him had told him that was how much they should cost.

The point I'm trying to make is that he didn't know how wrong the suggested 6k was because he didn't have enough information. If you spoke to him without knowing anything about solar pv you wouldn't know that he didn't understand what he was talking about - he was very convincing - even though he was wrong. Of course some other authorities are leading the way and lets hope that pv is included in the green deal - but everyone I've spoken to at lots of different levels are saying it won't be in because it doesn't meet the golden rule of payback in 5 years.

I suspect it's going to be a watered down insulation scheme and nothing much more than that.

 

[Worcester]

There is no way that FITs will cost the end user / consumer what this will:
The Thanet wind farm will milk us of billions - Telegraph

FITs is pretty safe.

 

[topquark]

Chris Huhne has said he is unlikely to change tariffs retrospectively - that doesn't mean he or subsequent governments won't if pushed to do so - it's happened in other countries and it's not impossible that it won't happen here.

Notice the careful choice of weasel words! He can change it moving forwards though !

 

[TheMightyGusset]

Notice the careful choice of weasel words! He can change it moving forwards though !

Yes, and he will.
It's a given that as more people take up Solar PV then the FIT payments will reduce.
However, what will not happen is that folk who are already on the scheme will have their payments retrospectively reduced.
Those payments are guaranteed for the life of the contract.
Some people on here appear to be confusing one with the other.

 

[BruceB]

Yes, and he will.

Those payments are guaranteed for the life of the contract.

But what is that guarantee worth?
Governments are not bound by their predecessors and can effectively change anything they want and do so retrospectively.
Examples:
Windfall taxes on oil and banks.
Pensions due to increase at rpi, now only going to increase at cpi.

Regards
Bruce

 

[TedM]

Green Deal funding can be used for PV - it can be used for anything as long as it is leads to a reduction in energy bills which is required to fund it. This is called 'The Golden Rule' in the Green Deal as it is the core aspect.

FITs payments can go down as well as up. Read the small print in the suppliers' FITs contract. The contract is between the energy supplier and the owner. If the government change the rules then the suppliers can wriggle out of any commitment. It may never happen - but it could.

 

[SRE]

Ted - I thought the golden rule was a 5 year payback, has that changed? I haven't looked for the last few weeks and I know there's been some progress recently.

 

[SRE]

Energy Bill Second Reading - Department of Energy and Climate Change Looks as though work up to 10k will be allowed, although it doesn't specify which kind of work and I wonder if it might be restricted to solid wall insulation which has been a major issue in the energy efficiency industry for many years. 10k would buy some decent smaller kits but I'm thinking that the paperwork would be horrendous - I guess we'll have to wait and see. If it is included it will make retrospective changes highly unlikely which is better for us all.

 

[Echo]

The article Malcolm is referring to on the previous page can be read here;

Get £10,000 for making your home greener - Yahoo! UK & Ireland Finance

 

[malcolmsanford]

The article Malcolm is referring to on the previous page can be read here;

Get £10,000 for making your home greener - Yahoo! UK & Ireland Finance

Thank you Echo that is the one and as I remember it seems to be for making the house more efficient rather than producing energy via PV or solar.

 

[nickblake]

they wont drop it but they will probably issue a wind and sun excise duty at 30p per kw you use doesnt matter which goverment is in they'll find away of bleeding you dry