Path to Zero Subsidy, and FITs Review

[The Solar King]

Trust everyone is aware there will be a major review of Feed In Tariffs in the second half of the year. This is an obligation under the terms of the scheme. It has already been telegraphed quite strongly that returns on smaller systems are currently too high in terms of the Levy Control Framework. Returns should be no more than 5%-8%. This could lead to significant cuts in tariffs in the 0-50kW bands in 2016.

There is ongoing dialogue by the industry with DECC both through a formalised meeting structure and other contact on this, plus how and when the industry moves to Zero Subsidy. In terms of ongoing stability, getting this latter issue right is vital. It is inevitable that this will happen.

I would urge you to read this article at Solar Power Portal and those subsequently published.

http://www.solarpowerportal.co.uk/guest_blog/the_path_to_zero_subsidy_3425

Interested to hear views that can be fed back into the process. Being proactive now to secure the best possible outcome is far better than trying to deal with a bad outcome later.

 

[whinmoor]

Another FiT cut on the cards for 1st April:

Rising PV deployment triggers April feed-in tariff degressions | Solar Power Portal

 

[Gavin A]

Personally I'd like to see the current degression system kept, but additional reductions in the duration of the FIT.

Particularly for businesses it's the initial payback time that's vital, so we can lose years off the end of the FIT payments with minimal impact on sales figures, but can't lose significant levels more off the FIT in the first few years without it impacting on payback times (over and above the existing degression arrangements).

 

[The Solar King]

Agree with you Gavin. Have already suggested maintenance of tariff and reduction of qualification period for this very reason. In terms of ROI and the LCF, they are not affected by this. As you rightly say, reducing the tariff but maintaining the 20 year period pushes the payback period right out.