[ Green: Light ] Update on Feed-in Tariffs
The sectors involved in renewable technology, energy efficiency and management are well placed to provide the necessary energy solutions over the coming decade
Green Deal Buildings account for about 40 per cent of all carbon emissions, and it is estimated that more than 60 per cent of all buildings in current use will still be around in 2050. The government has identified that improving the efficiency of existing buildings is of prime importance, and is introducing initiatives, such as the Green Deal, to advance this. This is set to enable unsecured loans to be taken out on buildings to improve their energy efficiency. The Green Deal has a ‘Golden Rule’, stating that repayments to install the measures should be less than the reduction in energy costs. The initiative is expected to be introduced in October 2012, and is likely to present many possibilities for specialist contractors. This drive for energy-efficient buildings is EU-wide.
The EU is drafting a directive that requires government departments and local authorities to bring their buildings up to a yet-to-be-agreed EPC level at the rate of three per cent of total floor area, starting in 2014.
Opportunities Electrical contractors are in an excellent position to take advantage of all these opportunities. They already have the skill set and knowledge of buildings, both in the domestic and non-domestic sectors, to advise clients on effective measures to reduce energy costs. The drive for this is becoming overwhelming, with government pushing for emissions reduction and committed by law, through the Energy and Climate Change Acts, to introduce measures to achieve their targets. The message is not to be dismayed by the loss of PV
subsidies – there are still many commercial opportunities for those with the knowledge and drive to help clients to gain control over the increasing cost of energy.
Head of Environment at the ECA, Paul Reeve, provides an update on key points raised by the latest Feed-in Tariff amendment proposals
The proposed ‘rates and dates’ in the recent government snap review of domestic and commercial PV Feed-in Tariffs include: If the PV system was registered after 12 December 2011 then the rates are effectively halved from 1 April 2012. Between the registration date and the 31 March 2012, the system will still attract 43.33p/kWh in the case of sub-4kW domestic retrofits, but on 1 April 2012 the tariff will be reduced to 21p/kWh. The consultation document issued by the Department of Energy and Climate Change (DECC) had a reply date of 23 December 2011 even though, astonishingly, the date of implementation of the proposed changes was 12 December 2011. At the time of writing, a judicial challenge is being made by a number of parties. The ECA has also voiced its concerns about the timescales involved to a Parliamentary Steering Committee dealing with the consultation, and has made a substantial response to the DECC consultation itself, on behalf of members.
FITs and RHI starts
There was widespread dismay in the electrical contracting and wider solar installation sector at the speed and severity of the proposed reductions. Although a review had long been expected to lower the rates from April 2012, the autumn proposals stunned a fledgling industry that is delivering jobs and construction activity, notably by SMEs. The hasty consultation on FITs, and the recent delay to the Renewable Heat Incentive (hours before it was due to be implemented) have greatly undermined confidence in DECC. The lower rates of FIT are meant to give the same rate of return as the initial launch of the FITs gave around two years ago. The cost of PV installations has dropped considerably, and energy prices have risen by more than 10 per cent. The proposed new rates of 21p/kWh still offer customers the potential for a reasonable rate of return, tax free – and, with the price of energy continuing to rise and cost of PV panels continuing to fall, there will still be a good case for PV installation. After all, what else offers a five per cent return or more, tax free, guaranteed by government for 25 years?
ECA Today January 2012 23
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