The target would require the rate of installations to increase sixfold, and it came as the Department of Energy and Climate Change (Decc) launched a consultation on the next phase of the programme and outlined how tariffs would fall over time.
As well as outlining how and when tariffs across all eligible technologies would fall, and suggesting it may cut the tariff lifetime for PV to 20 years, the consultation showed Decc’s thinking on non-tariff aspects of the scheme.
Proposals include that losses are accounted for, so that only usable energy is eligible for FITs; that the secretary of state be given powers to determine alternative certification schemes; and that Ofgem potentially be given extra powers to protect against fraud or generators acting unlawfully. While Decc said it had “yet to determine what form these powers should take”, they may include rights of access and the ability to remove installations from the FIT register.
The consultation also indicated: that Decc may raise the threshold for small suppliers to have to offer FIT payments from 50,000 customers to 250,000; that Ofgem may soon have to collect data from each individual installation, should it prove possible to do so cost-effectively; and that there may be scope to set out provisions equivalent to the supplier of last resort arrangements for FIT payments.
Small suppliers will welcome the latter proposal because financiers can be less willing to lend to generators being paid by a small FIT licensee because they perceive there is a greater risk of the small supplier going bust.
FIT changes: Armageddon or a step in the right direction?
Decc’s proposals received a mixed response. Solar installer Eco Environments said they “could spell Armageddon” for the solar industry, although the company welcomed confirmation that homes would only have to meet an Energy Performance Certificate grade D rather than C to be eligible. Ernst & Young agreed that band D was “much more realistic”. Law firm Grant Thornton said Decc had given neither reassurance nor clarity. “Rather than a stable set of downward steps, we have a moving platform creating uncertainty about the timing of the degression,” said head of energy, environment and sustainability Nathan Goode. Good Energy chief executive Juliet Davenport disagreed. “We now know how tariffs will change in future, helping give investors greater certainty,” she said.
by Brendan Coyne
This article first appeared in Utility Week’s print edition of 17 February 2012.
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