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Existing generators angry at feed-in cuts to income

Posted by Cathy Debenham on 15 September 2009 at 8:32 am

Feed-in tariffs are designed to incentivise people to invest in renewable sources of energy generation. Yet, the government's proposals will give much lower rates to existing microgenerators, leading to a cut in income for many.

This seems a perverse move from government. The numbers of micro wind, solar and hydro installations in the UK is small. By setting the Clean Energy Cashback (feed-in tariff) at such a comparatively low rate for the early adopters they only make a small financial saving. In return they make a huge loss in good will. These people are enthusiasts who could be their greatest advocates for encouraging take up. Instead they are angry and disillusioned.

Alan Langmaid is one of those affected. He has solar panels on his home in Devon, and currently gets 28p from his energy company for every kWh generated - an income of about £500 a year. When he goes to the new system, he will get 9p for each kWh generated, plus 5p for each unit exported, virtually halving his return.

“It's despicable," he says. "Unfair and is done for the very worst reasons - to attract people financially while punishing those of us who pioneered PV at our own expense and risk. It's unethical, immoral and surely breaks every equality law they [government] have devised themselves."

Richard Barnett, owner of Veggie Barn in Hampshire, is also disappointed. He gets Renewable Obligation Certificate (ROC) payments, plus 12p per kWh for exported electricity, on his 4.2 kW photovoltaic system. This adds up to income of £570 a year. Under the proposals he would get £437 a year. If he had waited and installed the system now, he'd get £1064 a year.

"I installed a 4.2kw pv system just over three years ago as a mark of support for the need to boost renewables.  As a 'pioneer' I have had to negotiate various changes in the system including having to change the type of meter I had in order to qualify for ROCs.  The suggestion that I should be discriminated against because I was an early adopter is something I strongly object to."

These proposals are currently being consulted on. If you agree that they should be changed please join our campaign and let DECC know what you think.

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Comments

6 comments - read them below or add one

R.Musi

R.MusiComment left on: 28 September 2009 at 12:37 pm

Thanks for that. 

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R.Musi

R.MusiComment left on: 28 September 2009 at 12:02 pm

Just a quick question : what will happen to the ROC scheme as of April 2010?  

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Cathy Debenham

Cathy DebenhamComment left on: 28 September 2009 at 11:16 am

The ROC scheme continues, but everyone with systems up to 50kW will automatically be transferred to feed-in tariffs. Existing installations over 50kW will continue to get ROCs; new installations bigger than 50kW will get a one off choice of whether they want to receive FiT or ROC.

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R.Musi

R.MusiComment left on: 15 September 2009 at 1:41 pm

Thanks for your response, all is clear !

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R.Musi

R.MusiComment left on: 15 September 2009 at 10:19 am

Just a quick question regarding the Mr Langmaid example -  I'm trying to understand how he can currently be receiving 28p per kWh for the energy produced by his solar panels whereas under the new Feed-in Tariff scheme he would receive 9p per kWh?

Regards,

Richard.

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Cathy Debenham

Cathy DebenhamComment left on: 15 September 2009 at 10:12 am

As the system currently works, your income depends on which electricity provider you are with. They offer different rates, and different ways of rewarding. Alan Langmaid's supplier pays 28p per kWh for all the electricity he exports to the grid. They can pay this rate, as they act as agent for the ROCs (renewable obligation certificates) and claim it on his behalf. Below I've put an example of various calculations  of what different providers offer, the current rates of return, the rates of return for existing microgenerators under the new proposals and what they'd get if they installed now, which I hope illustrates the situation reasonably clearly:

Price comparisons between what people currently receive and what they will under the proposed changes:
To illustrate I have used a PV system generating 2,000kWh per annum, of which £1,000 is used in the home.

British Gas – Eco Save
5p per kWh exported, plus ROCs
Current income: £50 + £180 = £230
Proposed income: £230
Income remains the same

Ecotricity
12p for every unit generated
Current income: £240
Proposed income: £230
Annual loss in income: £10  Loss over 17 year life of feed in tariff: £170

e-on – Solarnet
Regional pricing between 8.89 & 11.27p per kWh exported + ROCs
Current income: £89 - £112 + £180 = £269 - £292
Proposed income: £230
Annual loss in income: £39 - £62   Loss over 17 year life of feed in tariff: £663 - £1,054

Good Energy Home Generation
15p for every unit generated
Current income: £300
Proposed income: £180 (generated) + £50 (exported) = £230
Annual loss in income: £70   Loss over 17 year life of feed in tariff: £1,190

Npower – PV
12p per kWh exported + ROCs
Current income: £120 + £180 =£300
Proposed income: £230
Annual loss in income: £70   Loss over 17 year life of feed in tariff: £1,190

Scottish & Southern Solar Energy plus
28p exported
Current income: £280
Proposed income: £230
Annual loss in income: £70   Loss over 17 year life of feed in tariff: £1,190

Scottish & Southern – microgeneration
5p per kWh exported, plus 9.2 per kWh ROCs
Current income: £50 + £184 = £234
Proposed income: £230
Annual loss in income: £4    Loss over 17 year life of feed in tariff: £68

New installations from April 2010
36.5p per kWh generated, 5p per kWh exported
Proposed income: £730 + £50 = £780

The amount saved through use of generated electricity in the home isn’t included, as that won’t change. Calculation based on two ROCs per MWh at £45. Prices based on information at Energy Saving Trust.

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