DECC announce the terms of >50kW pv FiTs review

[TedM]

DECC today announced the terms of the review of Feed in Tariffs for larger scale photovoltaic systems – those over 50kW.

They propose that the rates for pv are revised into the following new bands:


* >50kW – ≤150kW: 19p/kWh
* >150kW – ≤250kW: 15p/kWh
* >250kW – ≤5MW: 8.5p/kWh


All these sizes are currently covered by just 2 bands paid at 31.4p for 10kW to 100kW and 29.3p for 100kW up to the top limit of 5MW.


So for large solar farms (usually in the 1MW to 5MW size) this would represent a massive reduction in income and consequent extension to the payback time.


Under the current tariffs a 5MW solar farm could be generating approximately £1.5million a year in FiTs income and this would be reduced to £500k under the new tariff. A 5 year payback period would become 15 years.


DECC are running the consultation on tariffs until 6th May 2011 and the new tariffs are planned to be introduced from 1st August 2011. No adjustment will be made retrospectively to installations with existing FiTs contracts.


You can respond to the consultation here: DECC FiT tariff consultation

 

[Worcester]

Seems to me then that if you've got a 'big' roof ( I have two quotes out for for just uner 100kWp each) then if you do it now, you're OK, if you wait, then you may be better doing two 50kWp systems 12 months apart (seperate tariffs then) and it falls within MCS as opposed to ROO-FIT

@TedM you're the expert on multiple installations / second installations - did I get that right?

My general feeling is that this is a move in the right direction for the industry especially because of the land take / environmential impact arguments as well.

It is a major change, and it will be easier for them to relax it after consultation and say that they've 'listened'.

Though I would like to see roof mount and ground mount treated seperately, with a little more going to the roof mount

I was at a meeting with the CLA (Country Landowners Assocition) last month, and they predicted that if your solar farm application wasn't already in it was too late ...

 

[TedM]

The first 50kW system would get paid at the 50kW rate for 25 years from commissioning date.

The second 50kW system, if installed more than 12 months after the confirmation date of the first, would get paid at the 100kW rate for 25 years from its commissioning date.

If the second 50kW system was installed less than 12 months after the confirmation date of the first then they would be treated as a single system, with the first paid at the 50kW rate until the extension was added and then the 100kW rate would apply. This would then be paid for the remainder of the 25 years from the original commissioning date.

 

[eldsecny]

Following commissioning of the second system within 12 months of the first - what rate FiT is paid on the enlarged system (assuming the 12 months straddles August 1st)?

The first 50kW system would get paid at the 50kW rate for 25 years from commissioning date.

The second 50kW system, if installed more than 12 months after the confirmation date of the first, would get paid at the 100kW rate for 25 years from its commissioning date.

If the second 50kW system was installed less than 12 months after the confirmation date of the first then they would be treated as a single system, with the first paid at the 50kW rate until the extension was added and then the 100kW rate would apply. This would then be paid for the remainder of the 25 years from the original commissioning date.

 

[TedM]

Good question. I can't think that OFGEM would be able to answer that yet. The basic principles are:

-the proposed new rates are only supposed to apply to new systems commissioned after 1st August with no retrospective effects on existing systems.

- if an extension to a system takes you over a tariff boundary and the extended system is treated as a single system (as it would be for one extended less than 12 months after the first commissioning date) then the entire system would then be paid the rate of the higher band.

In theory that means (at least to me) that the existing higher band rate should be paid for the whole system and the proposed rates would not apply.

But I guess you could try to apply that logic to a 5MW solar-farm that is currently in planning that has no chance of being installed before 1st August. If you go out and put a 1kW array up now and register it - does that then mean you have an existing installation that could be extended to 5MW after the 1st August deadline (but still within the 12 month deadline) and still receive the current rates?

I can't imagine that DECC or OFGEM would wear it.

 

[eldsecny]

Many Thanks

You almost read my mind - although I was not envisaging being so extreme, insofar as i would expect the initial tranche to be within the same band as the remainder i.e. over 250kW.

No doubt clarity on this point will not be forthcoming until the legislation is passed - july 31st?

Good question. I can't think that OFGEM would be able to answer that yet. The basic principles are:

-the proposed new rates are only supposed to apply to new systems commissioned after 1st August with no retrospective effects on existing systems.

- if an extension to a system takes you over a tariff boundary and the extended system is treated as a single system (as it would be for one extended less than 12 months after the first commissioning date) then the entire system would then be paid the rate of the higher band.

In theory that means (at least to me) that the existing higher band rate should be paid for the whole system and the proposed rates would not apply.

But I guess you could try to apply that logic to a 5MW solar-farm that is currently in planning that has no chance of being installed before 1st August. If you go out and put a 1kW array up now and register it - does that then mean you have an existing installation that could be extended to 5MW after the 1st August deadline (but still within the 12 month deadline) and still receive the current rates?

I can't imagine that DECC or OFGEM would wear it.