To ensure that everyone plays their part towards achieving the Renewable Energy Strategy’s (RES) target of 15%
for renewable energy by 2020, the need to develop new methods of renewable energy in all sectors is apparent.
On 1 February 2010, the Department for Energy and Climate Change (DECC) announced their intention to imple-ment tariff levels following the Energy Act 2008 introduction of Feed-in Tariffs (FITs). The FIT scheme is intended to encourage the adoption of small-scale low carbon technologies up to a maximum of 5MW through tariff payments made on both generation and export of produced renewable energy.
Feed-in Tariffs (FITs) are effectively payments which are made for every kilowatt per hour of renewable electricity (kWhr) that is generated. Homeowners/businesses will have the opportunity to benefit financially from the scheme either by consuming it on-site, earning a generation tariff, or by selling spare capacity to the grid, generating an export tariff.
Amendment 2 to the Feed-in Tariffs Order 2010 came into effect on 1 August 2012. The schemes policy and tariff rates are set by the Government with the scheme being administered by energy suppliers and Ofgem.
Feed-in Tariffs will be paid by electricity suppliers. Generators between 50 kW and 5MW should apply to Ofgem for accreditation. Micro-generators can obtain accreditation via the Microgeneration Certification Scheme (MCS), before then applying to a supplier for a FIT agreement. All generation will be metered and FIT payments will be made in accordance with the Electricity Act 1989. The consumer will be responsible for the capital of the plant; the necessary access/connections to the electricity and transmission systems and organization of the payment receipts.
Since the scheme was introduced on 1 April 2010 and up to December 2012 a total of 358,658 renewable instal-lations have been registered, with 1,657 MW of total installed capacity also being registered.
FITs review
Thefirst review of the Feed-in Tariff scheme was scheduled to be carried out in 2012 however it was brought for-ward by a year due to the surge in uptake which placed a huge strain on the FITs budget. The surge was due to the sharp fall in the cost of solar PV installations and also the creation of large-scale solar farms, which went against the ethos of the scheme which was to promote small scale installations.
August 2011 saw the introduction of lower rates for large-scale solar installations. October 2011 the Department of Energy and Climate Control (DECC) launched a consultation into cuts for smaller-scale solar installations. The consultation resulted in the decision to reduce FITs to approximately half the original tariff, however this was brought to the High Court and after appeals were heard the ruling found the cuts to tariffs were illegal.
February 2012 saw the DECC announce wide ranging reforms to the FIT scheme which they hope will provide a better framework for consumers and communities. There are five key areas that the DECC has identified as needing refinements;
The tariff for micro-CHP installations will be increased to recognize the benefits this technology could bring and to encourage its development
A tariff of 21p/kWh to take effect from 1 April 2012 for domestic-size solar panels with an eligibility date on or after 3 March 2012
Installations of solar PV panels on or after 1 April 2012 will be required to produce and Energy Performance Certificate rating of ‘D’ or above to qualify for a full FIT
‘Multi-installation’ tariff rates set at 80% of the standard tariffs will be introduced for solar PV installations where a single individual or organization is already receiving FITs for other solar PV installations
Individuals or organizations with 25 or fewer installations will still be eligible for the individual rate. DECC is consulting on a proposal that social housing, community projects and distributed energy schemes be exempt from multi-installation tariff rates
Following the FITs review the Department of Energy and Climate Change (DECC) announced thefirst scheduled reduction in tariff rates for all PV installations with an eligibility date on or after 1 November 2012. The new tariff rates will be published by Ofgem by 31 August 2012. Tariff rates will be continuously reviewed as set out in the degression mechanism as follows:
Degression will take place on a quarterly basis, with tariffs changing on thefirst day of the first month of the quarter for new installations with an eligibility date from that date
Tariffs will be published at least two months before the start of the new quarter, and will be based on deployment of new PV generating capacity in the previous quarter
The baseline degression rate will be 3.5% per quarter
Degression will be skipped if deployment is below afloor threshold
Deployment statistics will be published on a monthly basis by DECC Eligibility
Small-scale (up to a maximum capacity of 5MW) low-carbon electricity technologies eligible for FITs are:
Wind
Solar Photovoltaics (PV)
Hydro
Anaerobic Digestion
Domestic scale micro Combined Heat & Power (CHP), eligible up to 2 kW.
As of 1 April 2010, micro generators (<50 kW) in Anaerobic Digestion, Hydro, Solar PV and Wind will be ineligible for support under the Renewable Obligation (RO) due to FIT inclusion. Refurbished/renovated installations will be ineligible. Small generators that applied for accreditation on or after the 15 July 2009 and before 1 April 2010 will be eligible to transfer to FITs.
Generating stations whose electricity is sold under a Non-Fossil Fuel Obligation (NFFO) arrangement will be ineli-gible for FITs; however will remain eliineli-gible to receive RO support.
Any existing systems installed before 15 July 2009 will only qualify for the FIT scheme if they are under 50 kW and registered with the RO.
From 1 December 2012, new provisions have been introduced for schools and some community organizations.
Tariffs
The Feed-in Tariffs (FITs) provide three mainfinancial benefits to the consumer:
A‘Generation’ tariff (up to 21.65 p/kWh depending on type and size) based on the total generation and the energy type
An‘export’ tariff (4.50 p/kWh) for any surplus energy produced exported into the grid and due to producing a percentage of the energy used
On-site usage of generated electricity, therefore reducing the amount purchased from an electricity supplier
52 Feed-In Tariffs (FITs)
Energy Source Scale Effective Dates Applicable Rates Tariff (p/kWh)
Anaerobic Digestion ≤250 kW to 31 March 2014 15.16
Anaerobic Digestion >250 kW–500 kW to 31 March 2014 14.02
Anaerobic Digestion >500 kW–5 MW to 31 March 2014 9.24
Hydro generating station ≤15 kW to 31 March 2014 21.65
Hydro generating station >15 kW–100 kW to 31 March 2014 20.21
Hydro generating station >100 kW–500 kW from 15 March 2013 15.98
Hydro generating station >500 kW–2 MW to 31 March 2014 12.48
Hydro generating station >2 MW–5 MW to 31 March 2014 3.23
Combined Heat & Power (CHP)
≤2 kW from 15 March 2013 Limited to 30,000 units
12.89
Solar photovoltaic ≤4 kW to 30 September 2013 Higher 14.90
Solar photovoltaic ≤4 kW to 30 September 2013 Middle 13.41
Solar photovoltaic ≤4 kW to 30 September 2013 Lower 6.85
Solar photovoltaic >4 kW–10 kW to 30 September 2013 Higher 13.50 Solar photovoltaic >4 kW–10 kW to 30 September 2013 Middle 12.15 Solar photovoltaic >4 kW–10 kW to 30 September 2013 Lower 6.85 Solar photovoltaic >10 kW–50 kW to 30 September 2013 Higher 12.57 Solar photovoltaic >10 kW–50 kW to 30 September 2013 Middle 11.31 Solar photovoltaic >10 kW–50 kW to 30 September 2013 Lower 6.85 Solar photovoltaic >50 kW–100 kW to 30 September 2013 Higher 11.10 Solar photovoltaic >50 kW−100 kW to 30 September 2013 Middle 9.99 Solar photovoltaic >50 kW–100 kW to 30 September 2013 Lower 6.85 Solar photovoltaic >100 kW–150 kW to 30 September 2013 Higher 11.10 Solar photovoltaic >100 kW–150 kW to 30 September 2013 Middle 9.99 Solar photovoltaic >100 kW–150 kW to 30 September 2013 Lower 6.85 Solar photovoltaic >150 kW–250 kW to 30 September 2013 Higher 10.62 Solar photovoltaic >150 kW–250 kW to 30 September 2013 Middle 9.56 Solar photovoltaic >150 kW–250 kW to 30 September 2013 Lower 6.85
Solar photovoltaic >250 kW–5 MW to 30 September 2013 6.85
Wind ≤1.5 kW to 31 March 2014 21.65
Wind >1.5 kW–15 kW to 31 March 2014 21.65
Wind >15 kW–100 kW to 31 March 2014 21.65
Wind >100 kW–500 kW to 31 March 2014 18.04
Wind >500 kW–1.5 MW to 31 March 2014 9.79
Wind >1.5MW–5MW to 31 March 2014 4.15
Feed-In Tariffs (FITs) 53
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