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Feed-in rate announcement may be delayed

Posted by Cathy Debenham on 24 November 2009 at 4:07 pm

The much awaited results of the consultation on feed-in tariffs may take a little longer than hoped. Internal wrangling between government departments is to blame according to the Guardian, and it's not clear when we're going to find out.

Ed Milliband had apparently hoped to have the policy in place in early December, but his officials at the Department of Energy and Climate Change (DECC) say it won't be announced until January. Treasury officials still say that details are due to be released around the time of the pre-budget report on 9 December.

There's a range of views about who is to blame for the delays, and whether it's good or bad news. According to Alan Simpson, Miliband's special advisor on renewable energy, Ofgem and the energy companies are anti microgeneration: "they have created a cosy oligopoly which produces non-renewable energy and ever-spiralling prices". He also says that "the Treasury, Ofgem and government officials have driven this policy with a towering lack of ambition".

Industry representatives quoted in Business Green are more upbeat. "If there is a delay it suggests they are still debating the levels which were originally proposed," said an unnamed insider. "That could be a good sign as those tariffs were far too low and need increasing."

Of course, all this speculation is no help to existing microgenerators who are waiting to hear whether or not they will get a decent rate of feed-in tariff or the 9p rate proposed. It might be worth dropping Ed Miliband a note (the arguments for a higher rate for pioneers are on the equal cashback campaign page) to nudge the political will forward a bit. Or send him a tweet at @EdMilibandMP

Business Green's article finishes with some wisdom from Leonie Greene of the Renewable Energy Association, who agrees with Alan Simpson's point about the energy companies protecting their vested interests and lobbying against the proposals:

"The problem is that the government is focusing on the costs of the scheme and not looking at the benefits," she said. "In Germany in 2006, the feed-in tariff cost €3.3bn (£3bn) but the increased supply of renewables meant that the cost of wholesale electricity spot prices fell, saving the economy €5bn. That is before you consider all the other benefits in energy security, job creation and so on."

Photo by LanceCheungImages

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Comments

5 comments - read them below or add one

ePower-Solar

ePower-SolarComment left on: 30 December 2009 at 10:15 am

Hey everybody,

Solarenergy has become driving economic force in Germany. And yes I think we own most of its success to the feed in tariffs established by German government. The technology developed in the early stages in small incremental steps but once the demand the grew companies started to also invest more money in research and development. Other countries like Spain followed and also introduces a tariff feed in system and as the prices for the components dropped investors and utility companies fully deployed the economy of scale factor and build large scale projects. 

 From that point on kind of a new development started, solar energy was not only seen as an alternative green energy source but as an economic factor and investment instrument. Manufactures from China entered the lucrative market of solarmodul production. Prices dropped suddenly and solar energy became even more attractive, I am sure that we will see more and more large scale projects in the near future. It can be expected that solar energy will get another major boom as prices will continue to decrease in the future.

12V Solarzellen ePowerSolar 

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SolarUK

SolarUKComment left on: 1 December 2009 at 3:31 pm

Another reminder that Germany (further to Leonie Greene's quote above) is ahead of the game came in a BBC website article yesterday.  Incentive programmes for solar panels are bringing down costs, contributing to what has been revealed in of new research from the EU Energy Institute, namely that that solar panels will fall in price quicker than previously expected.

http://www.solaruk.com/solarnews.asp

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R.Musi

R.MusiComment left on: 27 November 2009 at 5:42 pm

Many thanks for the prompt and informative response.

Enjoy the weekend,

Richard. 

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Cathy Debenham

Cathy DebenhamComment left on: 26 November 2009 at 7:55 pm

Hi Richard

Good question. The proposal document says that the treatment of FiTs with regard to tax is a matter for the consideration of HM Treasury. A DECC official speaking at a conference organised by RegenSW a couple of months ago said that they were trying to persuade the Treasury not to tax them. After all, there's no point incentivising with one hand, if the other is going to claw it back.

Earlier this month I went to a Question Time event organised by Devon Association for Renewable Energy. I asked a question about FiTs, and Mark Cann, the Labour prospective parliamentary candidate for North Devon said: "there will be no tax on income". However, I guess we'll have to wait for the policy announcement to know for sure.

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R.Musi

R.MusiComment left on: 26 November 2009 at 1:50 pm

Hi Cathy,

Just wondering if you have any information as to whether income generated as a result of the Feed-in Tariff will be subject to income tax?

Kind regards,

Richard.  

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