What is the 4kW limit for FIT?

zeupater

Hi

I tend to agree in general, however, regarding the change in the FiT I actually agree with the government's decision .... if you check back you'll find many discussions on this forum regarding what form a change would take, for example, pre-dating the change announcement by a month or so ....

zeupater wrote: »

Hi

Welcome to the forum ...

This has been discussed a few times as it raised it's head in the press every few months. Effectively, there is no guarantee on anything if the government change the rules retrospectively, but there would certainly be a case for conducting a number of reviews or even some court cases and knowing how long these things take I would guess that my system would be well on the way to paying for itself before the scheme was stopped (I hope ).

It's far more likely that the FiT would be addressed and the tariff paid to new entrants would be seriously reduced, possibly in line with materials spot prices movement or averaged competitive install costs. The FiT is already due for a reduction for new installations in spring next year, so I would expect that there would be a further reduction above what has been published at this point in order to avoid adding complexity to the payment mechanism. A system which cost ~£20k when the FiT payment scheme was developed now costs in the region of £12k and the original payback logic would still apply, so it would make a lot of sense to expect the 43.3p/kWh to be reduced to somewhere between 25p and 30p instead of the anticipated 8.5% reduction to 39.6p/kWh (all before index linking).

If a reduction's not done next spring it almost certainly will be by the year after, other countries have taken this approach. Germany in particular changed their system last year but made the mistake of giving far too much notice which resulted in an installation frenzy to avoid the change deadline, and the UK gave a period of notice of change to 50kWp+ systems earlier this year which had a similar effect on large installations, so don't expect the government to signal any future change. In March this year France announced a change to their payments for larger ground mounted systems where the new rate became applicable on the day of announcement and in my opinion this is the likely model for future UK announcements

Just my guess .....

HTH
Z

... anything other than a very quick reduction timescale would simply have caused more confusion in a real feeding frenzy, as it is it should simply be seen by the industry as a market correction.

I would now predict that as a result of the industry challenge to the government there is a very strong likelihood that the reduced FiT which was calculated and set in Q3/Q4 of 2011 will be further amended to reflect the ~20% reduction in spot market pricing since (http://www.solarserver.com/service/pvx-spot-market-price-index-solar-pv-modules.html) which could not have been easily forseen and factored in .... possibly resulting in a further 10% decrease in the 21p rate, so ~19p would be a good target to look for, maybe not creating a fuss and accepting the necessity of change would have been a better option for the industry as a whole ....

HTH
Z

Martyn1981

Nicely put Z.

I was surprised the govt didn't pop in a reduction on domestic FITs when the 50kWp+ change went through. Presumably, reviewing cost changes for all tariff brackets would not have been too difficult given the panel tech is largely identical.

A drop to 35p (or less) could easily have been introduced, and I doubt anyone would have raised concerns. That would have made the recent change simpler.

But, it's a young scheme, and DECC got caught out, doubt they'll make the same mistake again. I can't see more than 6 months going by without at least your suggested reduction now. In fact a 2p reduction every 6 months would end domestic subsidies in 5 years.

Mart.

jamesingram

That all makes good common sense , but it appears the cuts might not of have been triggered by concern over large profits for installers, over than generous planned return for system owners or even reductions in material and labour cost . Take a look at the last few page of "PV after dec. the 12th" on the Green building forum, some very well informed posters and comments ( not mine ) on the subject of reasons for the cutting the tariff. Be easier than repeating it here, as it's a bit of topic from the original question re 4kW bands.

zeupater

jamesingram wrote: »

That all makes good common sense , but it appears the cuts might not of have been triggered by concern over large profits for installers, over than generous planned return for system owners or even reductions in material and labour cost . Take a look at the last few page of "PV after dec. the 12th" on the Green building forum, some very well informed posters and comments ( not mine ) on the subject of reasons for the cutting the tariff. Be easier than repeating it here, as it's a bit of topic from the original question re 4kW bands.

Hi

We've had similar discussions to this on this forum too as we realised that it was paid for by an 'agent' collected & administered scheme and needed to be accounted for 'on the books' .... makes no difference though, the FiT needed to be cut, the FiT was cut ... exactly the same outcome. So the money ran out at the same time, someone should be sacked at the MCS as the registration controlling body (that's if MCS survives this in it's current form !) or at DECC as the sponsoring government department (as if in the Civil Service ) then a new budget set with a tighter control mechanism, or simply say goodbye to a particularly margin greedy business sector, which noone really wants to see happen, but if margins are maintained at current levels will be allowed to happen as there is a duty to spend public funds effectively, remember, it is classified as a tax, even if not collected directly by the government ....

If the industry is looking at someone to point their collective fingers at, they shouldn't look towards the elected government or the respective government departments .... look towards the industry itself, particularly the RaR sector who have effectively left the installation side of the industry stranded and disproportionately gobbled up the available funds, a business model which was so obvious that some on this forum have raised the issue on numerous occasions ....

HTH
Z

jamesingram

Tend to agree, other than , business will take the chances given, it's a government sponsored stimulation exercise , they are responsible for it sensible management.
Also agree with the view that the industry should be looking at the future available budget and how best it can be used effectively , rather than current tarrif and the quick buck and perhaps more importantly how to get this budget increased if it's consider necessary for the long term future of the UK PV project.
From the GBF
"The entire £867million FiTs 'budget' has already been allocated based on the potential generation (for the next 3 years) from systems that have been registered. If that 'budget' is truly fixed then DECC have no choice but to close the scheme immediately to any new entrants as there are no funds left."
If this is the case then they'll have to increase this 'virtual' budget or close the scheme.
cheers

grahamc2003

jamesingram wrote: »

"The entire £867million FiTs 'budget' has already been allocated based on the potential generation (for the next 3 years) from systems that have been registered. If that 'budget' is truly fixed then DECC have no choice but to close the scheme immediately to any new entrants as there are no funds left."
If this is the case then they'll have to increase this 'virtual' budget or close the scheme.
cheers

Obviously the choices you outline follow from the facts. But of course governments slip and slide all over the place to try to appear to please everybody - in this case balancing the large green lobby against those saying some schemes are unaffordble and 'unfair' on the tax payer or power bill payer.

A possible compromise outcome could be an increase in budget partly paid for by extra contribution from tax/bill payers and partly by reductions in the rate paid to those on the 43p fit, whatever 'promises' have been implied. A possible argument a few years down the line could be that a cut in the 43p rate (as increased by inflation) would be 'fair' since the then benefit of the electricity used would be higher than envisaged, or that a two or three or four tier system of fits is somehow 'unfair' to those on lower bands. (Not raising these as debating points, just illustrating the possible arguments with some merit which could be dreampt up should the gov wish to slice the top rate of fit).

Just as an aside, the fits even at a reduced 21p are way out of step with incentives under the rhi, which look like being around 3 to 8p/kWh.

jamesingram

Yes be interesting to see how it pans out.
I dont think this initial 'fixed budget' claim has anything to do with
"balancing the large green lobby against those saying some schemes are unaffordble and 'unfair' on the tax payer or power bill payer."
More likely DECC is under instructions from the treasurery to fix and cut budgets where possible . Even though FITs only exists 'virtually' in DECCs budget (as it's paid by the electricity suppliers, who then no doubt pass it on to the consumer) by capping or cutting it they make a paper saving without loss of any real money going on other outgoings. like you say 'slip and slide' but perhaps in this case inter departmental
( I heard DECC do pay some compensation for the admin costs of the scheme to the suppliers though)
As to "some schemes are unaffordable and 'unfair' on the tax payer or power bill payer."
In this league table I'd be surpirsed if FITs would make it out of the Sunday pub league.
cheers

jamesingram

For anyone interested in the Definitions of the various terms
DNC , TIC etc.
“Declared Net Capacity”
means the maximum capacity at which the installation can
be operated for a sustained period without causing damage
to it (assuming the source of power used by it to generate
electricity was available to it without interruption) less the
amount of electricity that is consumed by the plant;

http://www.decc.gov.uk/assets/decc/what%20we%20do/uk%20energy%20supply/energy%20mix/renewable%20energy/policy/fits/1_20100331172153_e_@@_fitlicencemodification.pdf

EricMears

jamesingram wrote: »

For anyone interested in the Definitions of the various terms
DNC , TIC etc.
“Declared Net Capacity”


means the maximum capacity at which the installation can
be operated for a sustained period without causing damage
to it (assuming the source of power used by it to generate
electricity was available to it without interruption) less the
amount of electricity that is consumed by the plant;





http://www.decc.gov.uk/assets/decc/what%20we%20do/uk%20energy%20supply/energy%20mix/renewable%20energy/policy/fits/1_20100331172153_e_@@_fitlicencemodification.pdf

That's a little bit clearer though still liable to different interpretations.

e.g. I'm fairly happy that my 16 x 250w Suntech 'Black Pearl' panels should have a maxumum rating of 4.00kw but since Suntech make a big deal of their 'positive tolerance' it's just possible that some 'jobsworth' might decide that they really ought to be considered as being just over 4.00. Similarly, my SunnyBoy 4000TL is rated at 4.00kw but again is claimed to be able to deliver slightly in excess of that. I shan't lose a lot of sleep over the chances of being subjected to a full investigation !;)

GaryMo_2

jamesingram wrote: »

“Declared Net Capacity”
means the maximum capacity at which the installation can
be operated for a sustained period without causing damage
to it (assuming the source of power used by it to generate
electricity was available to it without interruption) less the
amount of electricity that is consumed by the plant;

“Total Installed Capacity”
means the maximum capacity at which an Eligible
Installation could be operated for a sustained period
without causing damage to it (assuming the Eligible Lowcarbon
Energy Source was available to it without
interruption), a declaration of which is submitted as part
of the processes of ROO-FIT Accreditation and MCScertified
Registration;

So, DNC=TIC