The feed-in tariff: one year on

The UK feed-in tariff has generated almost 80MW of growth in one year.

The feed-in tariff pays out a certain sum per kilowatt hour, based on the size of the installation . The original rates, which can be seen in the chart below, brought about:

0.982MW (408) from April – May,
2.465MW (1009) from May – June,
3.574MW (1426) from June – July,
4.566MW (1753) from July – August,
8.971MW (3735) from August – September,
6.438MW (2486) from September – October,
6.759MW (2440) from October – November
and 6.560MW (2377) from November – December.

Energy Source	Scale	Feed-in tariff (pence/kWh)	Duration (years)
Solar PV	≤4 kW new	36.1	25
Solar PV	≤4 kW retrofit	41.3	25
Solar PV	>4-10kW	36.1	25
Solar PV	>10 - 100kW	31.4	25
Solar PV	>100kW - 5MW	29.3	25
Solar PV	Standalone	29.3	25

As can be seen in the figures above, these rates spurred on a huge amount of growth in the first couple of months, with a total of 45.011MW or 17,244 installations reached by the end of December 2010. This figure includes historic installations entitled to the reduced-rate 9p tariff only, which were transferred from the former Renewables Obligation, as well as full FiT-eligible installations connected between July 15, 2009 and the start of the scheme, but which appear on the Register as post-April 1. (These installations amount to approximately 11MW; however, it is difficult to be precise in this regard as Ofgem does not outline the separate categories.) Omitting these transferred installations, the total at the end of 2010 amounted to approximately 34.011MW.

By February 7, the UK Government had announced its intention to launch a feed-in tariff review. This was to work in two stages, the first of which would be fast-tracked for what Government defined ‘large-scale’ (but what we call anything over 50kW), and the second a Comprehensive Review, which would look at all levels of installation.

By March 18, the fast-track review was revealed. The Minister of State, Greg Barker said the fast-track aspect of the review would show “fast-track consideration of large-scale solar projects (over 50kW) with a view to making any resulting changes to tariffs as soon as practical, subject to consultation and Parliamentary scrutiny as required by the Energy Act 2008.”

The document published outlined the following proposed new tariffs:
•    >50kW - ≤150kW: 19p/kWh
•    >150kW - ≤250kW: 15p/kWh
•    >250kW - ≤5MW: 8.5p/kWh

If the proposals go through, they will take effect from August 1, 2011. The industry has been given until May 6 to respond.

Although the reviews have caused a lot of uncertainty for the UK’s solar industry, they haven’t stopped figures reaching 77.864MW or 28,602 installations during the 12-month period to date. A striking 73.189MW of these were residential, a sector which is expected to continue on an upward trend considering the Government’s clear support.

The year’s figures, when split by country within the UK, show that the majority of the PV installations were in England (71.205MW), while Wales installed 3.411MW, and Scotland 2.506MW. Although these countries are doing their bit, it is expected that England will remain on top when it comes to solar power installations, as the south of the country has the highest solar irradiation levels.

As we move into this financial year, despite the looming review deadlines, the UK feed-in tariff (FiT) for solar installations will be adjusted slightly in industry’s favour to account for updated inflation figures. The new tariff will come into effect April 1 2011, and will be valid until March 31, 2012.

Scale	Previous feed-in tariff (pence/kWh)	Updated feed-in tariff (pence/kWh)
≤4 kW new	36.1	37.8
≤4 kW retrofit	41.3	43.3
>4-10kW	36.1	37.8
>10 - 100kW	31.4	32.9
>100kW - 5MW	29.3	30.7
Standalone	29.3	30.7

Installations are now expected to spike slightly while the tariffs levels are high, as industry will now be keeping a close eye out for more cuts to come during the comprehensive review. After that, it’s uncertain how the figures will be affected, as the feed-in tariff reviews, both fast-track and comprehensive, are expected to have a significant impact.

April 1, 2010 – April 1, 2011

UK
Overall: 77.864MW (28,602)
Domestic: 73.189MW (28032)
Commercial: 2.280MW (254)
Industrial: 0.321MW (31)
Community: 2.075MW (301)

 England
Overall: 71.205MW (26,486)
Domestic: 67.436MW (25,988)
Commercial: 1.655MW (212)
Industrial: 0.282MW (26)
Community: 1.832 (260)

Scotland
Overall: 2.506MW (822)
Domestic: 2.282MW (796)
Commercial: 0.158MW (15)
Industrial: 0.002MW (1)
Community: 0.064MW (10)

Wales
Overall: 3.411MW (1,165)
Domestic: 3.151MW (1,123)
Commercial: 0.127MW (20)
Industrial: 0.037MW (4)
Community: 0.095MW (18)

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Ofgem badge launched to help consumers identify green electricity tariffs.

Because coal-fired power stations are so obviously bad for the environment and electricity so profligately used, governments have been quick to hand out environmentally friendly regulations to its generators and suppliers.

An integrated power company in the UK must now, by law,
a) increasingly source its power from renewable energy
b) undertake a certain level of activity to improve energy efficiency in households,
c) pay a fixed reward to consumers producing their own renewable electricity (so-called 'feed-in' tariffs) and d) ensure their total emissions stay within a fixed cap (or buy in emissions reductions from elsewhere to compensate).

Soon they will also be required to collect a levy to be spent on capturing and storing carbon underground. It may not be long before they are also obliged to go nuclear.

All this regulation is absolutely essential for driving investment in climate solutions but it makes the act of choosing an electricity tariff considered 'greener' than average almost impossible. The good news is that by the time electricity reaches us it's already got all the legal green obligations priced into it. So we are all doing our bit via our bills already. But if you don't think the government's obligations are going fast or far enough and want to exercise your consumer power to go further, it quickly gets complicated trying to work out if that thing you want done is really additional or just meeting a legal requirement.

Ofgem's new trademarked label for green electricity tariffs is a welcome step forward. Help is at hand for the consumer seeking to navigate this carbon policy jungle.

A new panel of auditors has taken Ofgem's guidelines, issued last year, and scrutinised proposed green tariffs wishing to bear the new trademark – those that have passed will be announced today. The crucial test: is this product doing something that wasn't required of the electricity company already? Broadly, three things qualify – investing in (but not owning) community renewables projects too small to be part of the renewables obligation (point a. above), paying for energy efficiency projects that do not qualify for the existing requirement, and buying and cancelling emissions permits that would be otherwise used to allow pollution to carry on.

Of these, by far the easiest to audit and most clear in terms of doing something new, is the last: permit cancellation. The Environmental Audit Committee report, issued yesterday, clearly recommended that caps on emissions, in the UK and Europe, be significantly tightened. This must ultimately be achieved by changes to the policy at EU level but it can also be helped along by action by member states and by consumers.

Fewer permits in circulation mean less pollution. So tariffs that cancel them are good. More investment in renewable power and electrical energy efficiency unfortunately cannot be guaranteed to do the same unless some of the fixed supply of pollution permits are also cancelled. If they are not, they will be sold to someone else who will use them to pollute.

This fact has long been ignored in Europe though it has been the subject of intense debate in Australia, where the government is trying to introduce caps on emissions, and has already been addressed in the existing US regional cap and trade scheme. This has to change.

The Ofgem guidelines go a long way towards untangling the many overlapping climate policies that now exist. They are not perfect and there is still a long way to go to increase awareness and make the distinction clear between cancelling pollution permits and the much-criticised use of 'carbon offsetting', which is not the same thing.

If this can be achieved and more policies and products be aligned so that we get the number of permits in circulation down, then this new scheme will be an efficient way to harness green consumer power.

Reference: Bryony Worthington; director of Sandbag.org.uk campaigner for tighter caps on pollution.

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