FITs and the UK PV market


   !   Current market

   !   The new Feed-In Tariffs scheme

   !   Issues with the FITs

   ...
PV installed capacity




                                                                   32MWp !!




7th	
  June	
  2...
UK measures for RES-E

!   Renewables Obligation
           !   Started 2001
           !   Single price for all technolog...
The 3 main value streams




                                                                                     2	
     ...
The Generation Tariff


!   Paid for every kWh generated;
           !   whether used by the system owner
           !   o...
FIT Eligible technologies


!   Biogas from anaerobic digestion
!   Hydro-power
!   Solar photovoltaics
           !   Ret...
Eligible capacities


!   The FITs cover installations up to 5MW
           !   Except Micro-CHP only up to 2kW

!   The t...
Ineligible installations


!   Other RES-E technologies:
           !   Biomass, geothermal, tidal, wave, biofuel

       ...
FIT tariff levels

               Energy source              Scale                              Generation tariff p/kWh   ...
The Export Tariff


!   For every kWh exported to the grid
           !   The beneficiary gets the generation tariff
     ...
Duration of tariffs


!   Tariffs are fixed for 20-25 years
           !   Except micro-CHP for 10 years
           !   PV...
Tax treatment


!   Householders don’t pay Income Tax on
           !   The generation nor the export tariffs
           !...
How the tariffs were set


!   To achieve an “average 5-8%” return
           !   Would equate to roughly 12-year ‘payback...
Where the money comes from


!       The scheme is set in law, but
!       The government doesn’t pay for it
!       It co...
Who the money goes to



!   The beneficiary is the system owner

!   He can specify a ‘nominated recipient’
           ! ...
Scheme administration


!   Scheme is administered by Ofgem, who
           !       Maintain the register of FITs installa...
A measure for energy users?




7th	
  June	
  2010	
     FITs	
  and	
  the	
  UK	
  PV	
  market	
  -­‐	
  Philip	
  Wol...
What energy users want


     !   Not to have to be energy experts
     !   A financial proposition that works
           ...
Issues with the FITs


!   Public awareness
           !   Little government promotion
!   Consenting
           !   Small...
Long term forecast




                                                                                                   ...
Any questions?

            Websites
            About the Feed-In Tariffs:
                               www.fitariffs.c...
UKPVC 2010 Philip Wolfe   the fi ts for the uk explained
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UKPVC 2010 Philip Wolfe the fi ts for the uk explained

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UKPVC 2010 Philip Wolfe the fi ts for the uk explained

  1. 1. 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  
  2. 2. PV installed capacity 32MWp !! 7th  June  2010   FITs  and  the  UK  PV  market  -­‐  Philip  Wolfe   3  
  3. 3. 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 7th  June  2010   FITs  and  the  UK  PV  market  -­‐  Philip  Wolfe   4  
  4. 4. The 3 main value streams 2   3   1   Total  benefit  to  customer  =   1     GeneraHon  tariff  +     Saving  on  reduced  imports  +   2     3   Export  bonus   7th  June  2010   FITs  and  the  UK  PV  market  -­‐  Philip  Wolfe   5  
  5. 5. 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 7th  June  2010   FITs  and  the  UK  PV  market  -­‐  Philip  Wolfe   6  
  6. 6. 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) 7th  June  2010   FITs  and  the  UK  PV  market  -­‐  Philip  Wolfe   7  
  7. 7. 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  
  8. 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 7th  June  2010   FITs  and  the  UK  PV  market  -­‐  Philip  Wolfe   9  
  9. 9. 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 Retrofit   - 5MW≤4kW    >2kW 41.3p    4.5 20 Micro-CHP  <2 kW New build   ≤4kW   36.1p   10.0 10 Solar PV  ≤4 kW new  36.1 25 Solar PV  ≤4 kW retrofit 4-10kW   36.1p    41.3 25 Solar PV Retrofit and 10-100kW   31.4p    >4-10kW  36.1 25 Solar PV  >10 - 100kW  31.4 25 Solar PV new build   - 5MW  >100kW  29.3 25 100kW-5MW   29.3p   Solar PV Standalone  29.3 25 Wind  ≤1.5kW ≤5MW   29.3p    34.5 20 Standalone   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 7th  June  2010   FITs  and  the  UK  PV  market  -­‐  Philip  Wolfe   10  
  10. 10. 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  
  11. 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) 7th  June  2010   FITs  and  the  UK  PV  market  -­‐  Philip  Wolfe   12  
  12. 12. 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 7th  June  2010   FITs  and  the  UK  PV  market  -­‐  Philip  Wolfe   13  
  13. 13. 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  
  14. 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’ 7th  June  2010   FITs  and  the  UK  PV  market  -­‐  Philip  Wolfe   15  
  15. 15. 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 7th  June  2010   FITs  and  the  UK  PV  market  -­‐  Philip  Wolfe   16  
  16. 16. 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 7th  June  2010   FITs  and  the  UK  PV  market  -­‐  Philip  Wolfe   17  
  17. 17. A measure for energy users? 7th  June  2010   FITs  and  the  UK  PV  market  -­‐  Philip  Wolfe   18  
  18. 18. What energy users want !   Not to have to be energy experts !   A financial proposition that works Which renewables suit me? Connection agreement? !   Not to have to How much energy? Do I need planning? Cost of energy imports? Negotiate export price? Who can supply and install? Which supplier? worry about it What servicing is needed? How long do they last? 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? !   We’ll do it all !   … and give you a cheque each quarter 7th  June  2010   FITs  and  the  UK  PV  market  -­‐  Philip  Wolfe   19  
  19. 19. 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 7th  June  2010   FITs  and  the  UK  PV  market  -­‐  Philip  Wolfe   20  
  20. 20. Long term forecast PwC Government 7th  June  2010   FITs  and  the  UK  PV  market  -­‐  Philip  Wolfe   21  
  21. 21. 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   FITs  and  the  UK  PV  market  -­‐  Philip  Wolfe   22  
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