Feed-In Tariffs - Making sunlight a cash crop - Philip Wolfe (Ownenergy)
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Feed-In Tariffs - Making sunlight a cash crop - Philip Wolfe (Ownenergy)

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presentation on the feed-in tariff, solar pv and suitability for farm buidlings

presentation on the feed-in tariff, solar pv and suitability for farm buidlings

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Feed-In Tariffs - Making sunlight a cash crop - Philip Wolfe (Ownenergy) Feed-In Tariffs - Making sunlight a cash crop - Philip Wolfe (Ownenergy) Presentation Transcript

  • Feed-In Tariffs
    Making sunlight a cash crop
    Philip Wolfe
  • Feed-In Tariffs - how to benefit
    Feed-In Tariffs (FITs) - the fundamentals
    Tariff levels for PV
    Who gets the cash & where it comes from
    How to ensure FITs work for your farm
    13th October 2010
    Sunlight cash crop through Feed-In Tariffs - Philip Wolfe
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  • The UK’s Feed-In Tariffs
    The three main value streams
    Generation tariff
    Savings on imported energy
    Export bonus
    Eligible technologies and tariffs
    Administration
    Renewable Heat
    13th October 2010
    Sunlight cash crop through Feed-In Tariffs - Philip Wolfe
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  • The 3 main value streams
    13th October 2010
    Sunlight cash crop through Feed-In Tariffs - Philip Wolfe
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    3
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    Total benefit to owner =
    Generation tariff +
    Saving on reduced imports +
    Export bonus
    1
    2
    3
  • 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
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  • 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)
    13th October 2010
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  • 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
    Systems under 50kW – MCS
    Systems over 50kW – ‘ROO-FIT’
    13th October 2010
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  • 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
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  • FIT tariff levels
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    PV
  • 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
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  • 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)
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  • 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
    No Enhanced Capital Allowances for PV (yet)
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  • 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
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  • 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’
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  • 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
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  • 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
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  • 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
    Finance providers’ knowledge; conditions
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  • Project-specific issues
    Maximum capacity 5MW
    Accreditation required
    Pre-accreditation under ROO-FIT?
    Must use conforming meter
    Selection of ‘FITs Licensee’
    Use of nominated recipient
    Timing: Degression; seasonality
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  • Ownergy Plc
    Your renewable energy and tariffs expert
    Advise you in selecting the appropriate options
    Design and procure suitable systems
    Structure projects for financing
    Supervise installation & commissioning
    Register and manage the tariffs
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  • Government growth forecast
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    kW
    kW
    kW
    Expected numbers of installations by size Source: DECC
  • PV FITs installations to date
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    Gross installed capacity to 2009 = 32 MW!
  • One of UK’s first solar parks
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    AD
  • One of UK’s first solar farms
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  • All this assumes ...
    ... that the Government doesn’t tinker with the tariffs in the present Spending Review
    They shouldn’t (it isn’t public spending)
    But just to be sure; sign up at:
    wesupportsolar.net
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  • 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
    Feed-In Tariffs
    Philip Wolfe
    13th October 2010
    25
    Sunlight cash crop through Feed-In Tariffs - Philip Wolfe