UKPVC 2010 Philip Wolfe the fi ts for the uk explained

transcript

FITs and the UK PV market

! Current market

! The new Feed-In Tariffs scheme

! Issues with the FITs

! Outlook for the future

7th June 2010 FITs and the UK PV market -‐ Philip Wolfe 2

PV installed capacity

32MWp !!

UK measures for RES-E

! Renewables Obligation ! Started 2001

! Single price for all technologies

! Low Carbon Buildings Programme ! Started 2006 ! Grant per installation – PV: £2,500 max.

! PV: 000’s of installations

! Feed-In Tariffs ! Started April 2010

The 3 main value streams

Total benefit to customer = GeneraHon tariff + Saving on reduced imports + Export bonus

The Generation Tariff

! Paid for every kWh generated;

! whether used by the system owner

! or exported back to the grid

! Level depends on:

! The renewable energy technology

! The capacity of the system

! The date of installation

FIT Eligible technologies

! Biogas from anaerobic digestion ! Hydro-power ! Solar photovoltaics

! Retrofit in existing property ! New-build (properties not yet occupied) ! Stand-alone (systems for pure grid-feed)

! Wind power ! Micro-CHP (non renewable)

Eligible capacities

! The FITs cover installations up to 5MW

! Except Micro-CHP only up to 2kW

! The tariff level depends on:

! So-called ‘Total Installed Capacity’

! The capacity is per ‘site’

! Additions based on cumulative capacity

! Installations must be accredited 7th June 2010 FITs and the UK PV market -‐ Philip Wolfe 8

Ineligible installations

! Other RES-E technologies:

! Biomass, geothermal, tidal, wave, biofuel

! Hopefully to be reconsidered on review

! Systems over 5MW

! Second-hand and refurbished systems

! Pre 15th July ‘09 installations

FIT tariff levels

Energy source Scale Generation tariff p/kWh Duration (years)

AD ≤500kW 11.5 20

AD >500kW 9.0 20

Hydro ≤15 kW 19.9 20

Hydro >15 - 100kW 17.8 20

Hydro >100kW - 2MW 11.0 20

Hydro >2kW - 5MW 4.5 20

Micro-CHP <2 kW 10.0 10

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

Wind ≤1.5kW 34.5 20

Wind >1.5 - 15kW 26.7 20

Wind >15 - 100kW 24.1 20

Wind >100 - 500kW 18.8 20

Wind >500kW - 1.5MW 9.4 20

Wind >1.5MW - 5MW 4.5 20

Existing systems transferred from the RO 9.0 to 2027

Retrofit ≤4kW 41.3p

New build ≤4kW 36.1p

Retrofit and new build

4-10kW 36.1p

10-100kW 31.4p

100kW-5MW 29.3p

Standalone ≤5MW 29.3p

The Export Tariff

! For every kWh exported to the grid

! The beneficiary gets the generation tariff

! Plus a premium for export, as follows

! A fixed rate of 3p/kWh has been set

! But you can opt out and negotiate

! a better price from an electricity supplier

! Opt-out decisions can be made each year 7th June 2010 FITs and the UK PV market -‐ Philip Wolfe 11

Duration of tariffs

! Tariffs are fixed for 20-25 years ! Except micro-CHP for 10 years

! PV is 25 years all others are 20

! Tariffs are index-linked to the RPI ! Both generation and fixed export tariffs ! New rates will be announced annually

! For new installations tariffs change: ! Subject to degression ! Maybe at reviews (5-yearly from 2013)

Tax treatment

! Householders don’t pay Income Tax on ! The generation nor the export tariffs

! ... provided that it is for “households who use renewable technology to

generate electricity mainly for their own use”

! Business has no special tax exemption ! but can offset costs against profit as usual

How the tariffs were set

! To achieve an “average 5-8%” return ! Would equate to roughly 12-year ‘payback’

! We find that typical systems: ! Recover their costs ~ twice over the period ! That is equivalent to a 12-year payback

! We find that the best systems: ! Recover their costs 2½ to 3 times ! Equivalent to less than 10-year payback

! Index-link & tax break improves all this 7th June 2010 FITs and the UK PV market -‐ Philip Wolfe 14

Where the money comes from

! The scheme is set in law, but ! The government doesn’t pay for it ! It comes from a levy on electricity bills

! It’s collected and paid out by suppliers ! Who have a ‘levelisation’ system to share

the costs fairly between them

! It is now part of their licence conditions ! Only small suppliers can opt out ! Others are called ‘FITs licensees’

Who the money goes to

! The beneficiary is the system owner

! He can specify a ‘nominated recipient’

! to whom is tariff payments can be made

! He nominates (and can change)

! which FITS licensee will pay over the tariff

Scheme administration

! Scheme is administered by Ofgem, who ! Maintain the register of FITs installations

! Oversee the levelisation process ! Accredit systems over 50kW ! Have issued guidelines on how it works

! For more details: www.FITariffs.co.uk

A measure for energy users?

! Not to have to be energy experts ! A financial proposition that works ! Not to have to worry about it

! We’ll do it all

! … and give you a cheque each quarter

Which renewables suit me?

How much energy?

Do I need planning?

Who can supply and install?

What servicing is needed?

How long do they last?

Connection agreement?

Cost of energy imports?

Negotiate export price?

Which supplier?

What metering?

Who reads meters?

What if the sun doesn’t shine / wind doesn’t blow? Who makes sure it all works together? Load management / Smart metering?

How to register for tariffs? What finance is available?

What energy users want

Issues with the FITs

! Public awareness ! Little government promotion

! Consenting ! Small systems ‘permitted development’ ! Larger developments less certain

! Tariff levels

! Financing ! No official finance available

Long term forecast

Government

Any questions?

Websites

About the Feed-In Tariffs:

www.fitariffs.co.uk

About the Renewable Heat Incentive:

www.rhincentive.co.uk

About Ownergy:

www.ownergy.co.uk

7th June 2010 22 FITs and the UK PV market -‐ Philip Wolfe