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Feed In Tariff Review – A step-by-step guide to what happens now?

Posted on the 11 January, 2012 at 12:40 pm Written by in Blog, Feed In Tariff, Finance, Government, Incentives

The DECC Judicial Review for FIT Tariff Rates – A step-by-step guide to what happens now?…

As the date for the consultation review of the ‘FIT’s review’ looms, there is uncertainty in the industry due to the current situation.

An overview of the situation;

12th December 2011: eligibility date after which consultation proposes new installations should revert to 21p tariff on 1st April 2012

21st December 2011: Friends of the Earth, HomeSun and Solarcentury win their case against the Government’s proposed changes to the solar FITs

22nd December 2011: Joint Select Committee Report into FITs is published, criticising management of the scheme and the recent consultation process

23rd December 2011: Deadline for responses to consultation on Phase 1 of the Comprehensive FITs Review

4th January 2012: DECC announces that they have lodged grounds of appeal with the Court of Appeal

6th January 2012: Date for DECC’s application for permission to appeal announced

10th January 2012: DECC announced a further £197M for the small scale FIT budget

The Ruling

The Judge ruled that the 12th December reference date for the proposed cuts to the FIT, occurring two weeks before the consultation officially ended on 23rd December, would be illegal.

DECC’s Response

DECC released a statement on the 5th January regarding their request for permission to appeal and their comments on the High Court’s decision to reduce the FIT tariff rate:

“We disagree with this for a number of reasons. The overriding aim of the proposed reduction in tariffs for solar PV is to ensure that over the long term as many people as possible are encouraged to install small scale low-carbon generation (including other technologies as well as solar PV) and benefit from the funding available for the FIT scheme.

Without an urgent reduction in the current tariffs, which give a very generous return, the budget for the scheme would be severely depleted and there would be very little available for future solar PV generators, or for other technologies. Our view is that the urgent steps we have proposed to protect the scheme for the future are fully consistent with the scheme’s statutory purpose.

We have also made the point that the judicial review was premature as no decision has yet been taken, and a decision will only be taken after a full analysis of the responses to the consultation.”

What will happen now?

The permission hearing for an appeal by DECC is on the 13th January.  If permission is granted, the appeal itself will take place the same day.   From then there are a number of possible future outcomes:

DECC is refused permission to appeal = 43p tariff remains in place for all registered installations until the Parliamentary process has concluded  (expected to be 1st April, but could be earlier)
DECC is granted permission to appeal but subsequently loses =
A hearing takes place (up until which a final decision is still pending) after which 43p tariff is confirmed for all registered installations until the Parliamentary process has concluded (see above)
DECC is granted permission to appeal and wins =
A hearing takes place and we return to the existing situation where a consultation process is ongoing and Government is considering responses

The Future of the Industry

Our MCS certifying body NAPIT (National Association of Professional Inspectors and Testers) have been working closely with the DECC and sit on a number  of official lobbying groups, part of which included  meetings with Minister Greg Barker to discuss the long term plan for a sustainable renewable industry.

Statistics show following the FIT tariff reduction on October 31st the number of solar PV installations grew by approximately 50% per week, reaching around 30,000 installations in the last week leading up to the 12th December deadline.
DECC have stated: “The tariff rate for PV installations less than or equal to 4kW will NOT fall below 21p for installations with and eligibility date between 12th December 2011 and 31st March 2012.”

If the Government does not win an appeal, a renewed period of tariffs at 43.3.p/kWh is inevitable, although how long this will be available for is not clear.

How do you get a quotation and what FIT rate will you get?

If you’ve read this far you will see the governments handling of the whole process has created a huge amount of uncertainty, leaving businesses and customers uncertain what FIT rate they will get.

We will therefore be issuing all quotes based on the post-12th December rates which were proposed in the FIT review – see Feed In Tariff (FIT) – which based on the information we have should be worst case scenario for installations completed before the 31st March 2012.

Due to further reductions in cost of equipment in Jan 2012 the lower rates still demonstrate attractive returns of between 7-10% per year.

We are expecting a rush up to the 31st march deadline, due to any new requirements/rates being introduced on the 1st April, so to avoid disappointment contact us ASAP for your free no obligation solar survey.

Web – http://www.pvfit.co.uk

Get a survey/quote – http://www.pvfit.co.uk/get-a-quote

Phone – 0344 567 9032

Twitter – http://twitter.com/PVFITLTD

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