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Government breaks feed-in tariff promise for early adopters

Posted by Cathy Debenham on 16 September 2010 at 5:44 pm

Tories and LibDems both promised equal feed-in tariff rates to early adopters of renewable energy in the run up to the general election. Now the coalition government has broken that promise and we're calling on early adopters, and others that care about the shift to renewable energy, to let their MPs know how angry they are.

Both parties are on record saying they would pay higher rates of feed-in tariff to early adopters of solar panels, wind turbines and micro hydro schemes, but now they have gone back on their word.

West Dorset MP, Oliver Letwin, broke the bad news in an email to constituent Henry Lovegrove:

"As you will recall, after thinking through the issue, the  Conservative party adopted the commitment before the election of enlarging  the scope of the feed-in tariff to include pioneers who had installed their  machinery before the start-date of the new scheme.  As you will also  remember, this did not find its way into our Programme for Government following our coalition agreement.  I then - as I think you know -  raised this issue with Chris Huhne, and he had very detailed discussions  with his officials about the costs of administering a system in which new  installations qualify for FITs but old ones don't - in the hope that he  could persuade his officials and himself that he could establish a  value-for-money case for extending the FITs to the pioneer installations on the grounds that there would be administrative savings to counter-balance  the fact that money was being given to people who had already installed  machines.

"Unfortunately, Chris was unable to establish that the administrative savings would be anything like large enough to counterbalance  the additional costs - and I am afraid he has therefore concluded that this  would not represent value for money."

Chris Huhne has since made a statement to the same effect in the House of Commons.

This is a huge blow for all the early adopters who signed up to our Equal Cashback for Microgenerators campaign in September last year. Many of them needed dedication and persistance to work their way through the difficulties and bureaucratic barriers and get their systems up and running. Their experience has fed into the development of the feed-in tariff, and their enthusiasm and advocacy is needed if solar panels and wind turbines are going to become commonplace in communities and homes. Yet again they have been let down, and many are financially worse off as a result of this 'financial incentive'.

This decision also has implications for the renewable heat incentive. Renewable heat is much more complicated than generating renewable electricity, and the enthusiasm and knowledge of the pioneers is going to be essential in encouraging the cultural change necessary for mass take up.

Henry Lovegrove is outraged: "It seems lib dems and tories are blaming each other, and the financial situation, for not changing the rules. In practice they are both reneging on promises and it has nothing to do with the financial situation.  The effect of increasing the payment is a microscopic increase in electricity bills which is probably offset by administrative savings - there is no cost and probably an administrative saving to the exchequer.

"I have just extended my system and am now in the process of simultaneously registering a 1.6kWp extension for the feed-in tariff rate of 41.3p per unit, and the 2.4kWp original system for a feed-in tariff rate of 9p (both qualify for 3p exports) how ridiculous is that?  It is comparable to sitting MPs returned to Parliament at the May general election getting a pay drop but new MPs getting a 400% pay rise plus £10,000 added to the value of their house.

"Non payment of the new feed-in tariff rates to pre July 2009 renewable energy installers is grossly unfair, and calls into question the credibility of any undertakings made by politicians in respect of supporting renewable energy technology installation. Loss of credibility will cause distrust, with the result that people are less likely to invest, and the objective of increasing installed renewable energy capacity will be undermined." 

Richard Barnett of Veggie Barn is also unhappy about the news: "I invested in a photovoltaic system four years ago partly to encourage others to do the same," he said. Now I find I am penalised and will receive a very poor tariff for the electricity I am putting back into the national grid - making my system even more uneconomically viable than it was under the old system."

In a reply to Friends of the Earth before the election the Conservatives made this statement: 

“There is one flaw with the FiT system which we will put right straightaway – and that is the unfair and counter-productive exclusion of projects installed before the scheme’s starting date. Within fair and reasonable conditions, we will allow capacity that was installed without public subsidy before the start of the feed-in tariff scheme to qualify for the tariffs. For those projects that were installed with public grants we will give owners the option of repaying the original grant in return for inclusion in the FiT scheme.”

See microgenerators.info for a statement from Charles Hendry along the same lines.

Previous coverage of this subject on YouGen includes:

Feed-in tariff for early adopters an update (6/8/10)

Early adopters and the feed-in tariff: an update (12/7/10)

Renewable Heat Incentive: join the campaign for equal treatment for existing generators (29/3/10)

EDM adds wait to campaign for equal rates for microgeneration pioneers (12/3/10)

Existing generators angry at feed-in cuts to income (15/9/09)

Feed-in tariffs are not fair to renewable energy pioneers (14/8/09)

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Comments

12 comments - read them below or add one

Alternative

AlternativeComment left on: 4 October 2010 at 12:45 pm

I am gutted by this broken promise. I am being paid 16p/kWh by Ecotricity for the energy my 4kWp system produces, which is a lot better than the 9p/kWh on offer from the FIT.

I will seriously consider storing some of the energy produced, in my 10kWh battery bank for later use, to increase the amount of power I can realise from my system.

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Green energy Why bother

Green energy Why botherComment left on: 26 September 2010 at 4:19 pm

Hi Cathy

Contacted my Labour MP before the last election. He asked a question to guess who,Ed Milliband but I do not think he understood it from the reply he gave. He then asked another question and I received a reply from Lord Hunt, no better. Then our MP passed away sadly. Our new then prospective Conservative MP came and had is photograph taken with me and my panels just before the election and it was used on his "blog". Have now posed further questions to him and am awaiting his reply, but I guess I know what it will be.

 

Used and abused and confused

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RobertPalgrave

RobertPalgraveComment left on: 23 September 2010 at 8:41 am

Cathy - you asked for questions to Chris Huhne on this.

1. I am a relatively late early adopter of Solar PV (Jan 2009). I got a 25% grant. I would consider paying back the grant to secure the full FIT. Or having a proportionately lower FIT (75%?) to reflect the help I had with upfront installation costs. Why are these options not available?

2. Financial support is being ploughed into large scale biomass electricity (hundreds of MW) around the country which rely on imported fuels like palm oil, and eucalyptus wood chips. The environmental impacts are huge. 'Subsidies' for these power stations are funded from my electricity bill. I have no choice. I don't want to fund deforestation. The electricity they produce is supposed to be 'carbon neutral' but of course the greenhouse gas savings are far far less than 100%. Not even 'low-carbon'. Why is it OK to subsidise this? It is distorting the market and driving investment away from truly low-carbon alternatives like wind and solar. And slowing the rate we can reduce our overall emissions. The costs are far in excess of anything that could be attributed to homeowner FITs.

I have blasted my Cons MP about the situation with the broken promise on FITs for early adopters. Not hopeful of any support though.

keep up the great work!

 

Rob

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Cathy Debenham

Cathy DebenhamComment left on: 23 September 2010 at 8:36 am

Hi John

Were you registered to receive ROCs (renewable obligation certificates)? If so, then you can switch to the feed-in tariff at the ‘existing generators’ rate of 9p for every kWh you generate, plus 3p for each kWh exported. Click the link for more information about how to change from ROCs to the feed-in tariff - and act now as the deadline is 1 October 2010.

If you weren't registered under the renewables obligation I think it's too late to do anything, as I think the deadline for registering your system passed some time ago (if anyone thinks differently, please correct me).

As to utilities, all the big ones are obliged to pay the feed-in tariff to accredited generators, and some of the smaller ones have chosen to do so too.

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John Twidell

John TwidellComment left on: 22 September 2010 at 4:43 pm

Yes, pioneers (we have 3 kW of PV, installed 2005) were promised by both Tories and Lib Dems to be included in the feed-in tariff. Moreover, being excluded means that we cannot sell surplus to our Supplier at 3p/kWh.  We cannot find a buyer of our surplus (about 850 kWh/y) which is said to be too little, 'just spill'.  May be 'spill' for utilities, but it is 50% for us!  Can YouGen find out if the 3p/kWh guarantee can apply to pioneers?

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Cathy Debenham

Cathy DebenhamComment left on: 21 September 2010 at 11:00 am

That's a great idea mcfi5dhc - I'll see what I can do.

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Andrew Hague

Andrew HagueComment left on: 19 September 2010 at 2:40 pm

What a ridiculous and condescending comment - warm glow indeed, more like red hot fury. When politicians and political parties break promises then they undermine the whole basis of democratic government. Yes we must write to our m.p.'s to our local newspapers and to anyone else who will listen. Even if making the legislation retrospective does not represent 'value for money' we now know exactly what a limp wristed and lame duck government we now have, where 'value for money' trumps the honouring of clear and unequivocal commitments.

I imagine that there will be a large number of lib dem grass roots members who will be dismayed by the behaviour of their leaders in this matter, we have got to give them the information that will enable them to call their m.p.'s to account.

I used to lecture non voters on their civic duty, but next time around I think it unlikely that I will bother to vote. None of them deserve my endorsement.

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technica

technicaComment left on: 17 September 2010 at 5:34 pm

Hi Cathy

Unfortunately, Chis Huhne has inherited the staff in the DECC from the previous Government.  It appears that he is not strong enough to stand up to his officials and direct them as he should.    

I could quite easily get angry, but that never wins an argument, it weakens it!  The Tories and the Lib Dems have lied to us; what a pity they do not have the courage or commitment to implement their “Fairness to all” policy.   

So what about the future? Rolling over and being defeatist has never been a strength of mine; this time I think it’s time to regroup and plan a campaign.  A strategic campaign which has longevity and substance, which involves the media, all the early adopters, and any MP who has a sense of fair-play (if we can find one who doesn’t lie, I wonder if there is such a thing?).  My union, the PCS, are pursuing a green stance and I bet they would love this story.  This is an inexperienced Government which has no track record (I was fighting the IRA when Cameron and Clegg were still in school). All they have is ideals that have no substance and they are going to have to fight for their political lives if the united unions start their campaigns.  The Parliamentary Ombudsman also needs to get involved.  I will do whatever it takes to ensure the early adopters are treated fairly.

Regards

Paul (microgenerators campaign )

Home: 01377 271103

Mobile: 07789 755567

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mcfi5dhc

mcfi5dhcComment left on: 17 September 2010 at 12:11 pm

Like burble61, I am hugely disapointed and not surprised in the least. I'd like to thank Cathy and the other supporters who have tried to get the government to stick to their promises. It is worth remembering, early adopters don't want MORE, we would like EQUAL payments. As the payments are made via the energy companies, and do not come out of the public purse, I'd like to know exactly why the government are refusing to honour their pledge. Cathy - would you be willing to invite Mr Huhne to answer a series of questions on your website from the pioneers and yourself? I'd certainly question his patronising statement about the warm glow!

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burble61

burble61Comment left on: 17 September 2010 at 11:39 am

Hugely disappointed - but not in the slightly bit surprised. One of the previous statements from the politicos alluded to the fact that some grants may have to be repaid but full FITS rates would be paid to early adopters. 

So U-turns on both. So (with respect to those affected by the grants uncertainty) - the issue which directly affects public funds - position reversed so no upside to govt finances. for the issue that has no real impact on govt finances (full fits rates - as funded by ROC by energy providers) - uturn.

administrative savings - not persuaded - the current multi-status system - with some extended systems in both - must be more complex than a unified one?

brand new government - same level of confidence in what politicians say


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Cathy Debenham

Cathy DebenhamComment left on: 17 September 2010 at 10:43 am

Hi Burble61

The grants and feed-in tariff situation is pretty clear now. Most people don't have to pay back their grant to be eligible. click the link for more detail.

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Cathy Debenham

Cathy DebenhamComment left on: 17 September 2010 at 10:25 am

And here's an extract from yesterday's Hansard that confirms the bad news. 

Caroline Lucas (Brighton, Pavilion) (Green):  "Will the Government backdate the clean energy cashback scheme and any future renewable heat incentive to ensure that those who pioneer the technology are properly rewarded and supported?"

Chris Huhne: "The hon. Lady makes a point that is dear to my heart, not only in the context that she raises, but in that of, for example, the
feed-in tariff for wind. Unfortunately, I do not benefit from that tariff as a pioneer. I considered the issue carefully on a value-for-money basis, and I am afraid that the advice from my officials was clearly that we cannot introduce retrospection in such cases because it does not represent value for money. We are trying to introduce new schemes in future, and therefore, sadly, the only incentive and payback that people such as the hon. Lady and I will get is the warm glow of being pioneers."

I'm not sure a warm glow makes up for having less income though!

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