Monday 30 January 2012

The long wait

Confirmed last week that although the Government have lost their appeal, however The Court of Appeal has not granted DECC permission for a further appeal, but DECC is seeking permission directly from the Supreme Court and has 28 days in which to do so. 
If they are granted leave to appeal and the appeal was successful (and it could take up to one year before the final outcome is known) they could still legislate to apply new tariffs from the 12 December 2011 reference date.   
Hence DECC is warning firms not to promote the higher tariffs in the period from 3rd March.

There does seem  to be a lot of publicity indicating the FiT WILL be back to 43p until 3rd March! This is clearly untrue right at the moment!

If you are considering having a PV system installed, assume you will be paid 21p until officially announced otherwise. A lot of rogue installers are telling people the higher rate to obtain a fast buck, they will have ceased trading by the time you make a claim!

As can be seen from the statement above from the Solar Trade Association, this 43p rate will only return long term if the Government either fail to get leave to appeal to the Supreme Court, or if they do, they lose yet again.

All of that can take time, which is obviously all the Government want to do in reality to avoid a last minute rush.

Our advice is to take advantage of the low price PV systems at 21p without the requirement of having extra insulation installed, as this is probably coming in after March 2012. If you also end up getting 43p a unit instead, think of this is a bonus!

Wednesday 25 January 2012

A potted version of todays events

The Solar Trade Association have just released the statement below, which nicely puts what the situation is right now:....

The Court of Appeal has just confirmed that they have rejected the Government appeal to overturn the High Court ruling. The basis of the Court of Appeal ruling was that under the Energy Act 2008 the Government does not have the power to change the feed-in tariff rates retrospectively, and therefore any change must come after the process of consultation and then Parliamentary Procedure taking 40 days.
This is crucial as it means Government does not have the power to reduce FIT rates retrospectively, or in the middle of a consultation in the future – and was the whole reason behind the court case in the first place.
However, while the Appeal was rejected, the Government were awarded permission, on the grounds that this Judgement was slightly different to that of the High Court. This means they can seek a further Appeal at the Supreme Court – and they have asked the Court of Appeal for permission to appeal.  We will know whether they receive it in the next few days.
What does this mean for tariff rates?
This does not affect the Government's proposal to cut rates for systems installed after 3rd March 2012, because that reduction has followed the correct procedure with regulations being tabled in Parliament already, and the cut coming after the 40 day period required by law.

There is still some uncertainty about rates paid on installations fitted between 12/12/2011 and 3/3/2012 because it is not yet clear whether the Government will allowed its appeal.  However, the minimum tariff that people installing in this period will get is 21p, and if Government’s Appeal is unsuccessful or should they decide to withdraw it, then they would get the 43.3p rate (for a sub 4kW system). 
A comment from your Chairman.
There is speculation that Government will appeal to prolong the uncertainty in the hope it will put some consumers off - but no doubt DECC will be setting that against the political damage done to them by yet another defeat and the image of a Government refusing to accept it has got it wrong and working to make amends.

The process going forward is that Government has formally asked the Appeal Court for permission to take this matter to the Supreme Court.  This however does not necessarily mean Ministers have decided it will do so - at the moment they may simply be keeping the option open.  The Appeal Court judges will make a decision on whether to grant permission in the next few days - if it is granted, the case can go to the Supreme Court.  If permission is refused the Government would still have the fall back option of applying to the Supreme Court itself for permission to appeal.  But this would add a further step in the process - and at each step the chances of success for Ministers recede a little further.

DECC appeal overturned

So much going on today!..
But the short version, at this point, is the Governments appeal was overturned leaving systems installed till 3rd March open to be getting 43p (for up to 4kWp). After that 21p (over the 25 year period)

However, DECC have announced they will try and appeal yet again, even though they have NOT been given leave to appeal.

For the Independants report of todays decision HERE

For more resource, see a copy of the whole decision on the Guardians website HERE
For Chris Huhnes response HERE

If you have not booked a PV installation by now, get it installed ASAP, or forever lose out on the old high rate that will be gone... forever!

Thursday 19 January 2012

And finally, the final version from DECC

This afternoon, DECC have released the statement HERE which clarifies the Feed in Tariff situation not only for now, but after April 1st.
It has been backed up by a Ministerial statement by Greg Barker HERE which puts the decision into context and appears to show a support for the Renewable energy sector.

Both Solar PV industry and customers can breathe a little easier now, as we have definate decisions from the Government, though this may mean a mini rush for system installations during February, that should not affect the Governments budget too much which will leave them able to continue with a reasonable 21p rate after April.
See reproduced table below:

Band (kW Declared Net Capacity (DNC) Current generation tariff (p/kWh)  New generation tariff from 1 April 2012 (p/kWh)
≤4kW (new build) 37.8 21.0
≤4kW (retrofit)  43.3 21.0
>4-10kW 37.8 16.8
>10-50kW 32.9 15.2
>50-100kW 19 12.9
>100-150kW  19 12.9
>150-250kW 15 12.9
>250kW-5MW 8.5 8.5
stand alone 8.5 8.5

Tuesday 17 January 2012

Yet another update on the FiT situation

We have been getting quite a lot of phone calls from people asking about the current situation with the Feed in Tariff while the Judicial Review appeal is in progress.

As can be sen from todays update email from RegenSW (below), if you have a system installed beween now and April you will get 21p a unit (which still works out at 9% return at the new install costs), and you MAY be in with a chance to get 43p a unit if the JR appeal does not come out in favour of the Government. If you leave it till the decision date, in early Feb, to get a system installed, you may be already too late as installers schedules will be filled by booking a system to get in before April's reductions.

News From REGENSW..The latest round of the legal battle over the FiT on Friday has led to yet more delay over the future of scheme with the judges indicating they could take weeks to come to a decision on the government's appeal (our prediction on Friday of a conclusion this week now looks rather too hopeful). So where does that leave us?
Legal battle
The legal argument is over whether the government acted lawfully in proposing a change in FiT rates from a date (12 December) before it had completed the due process needed to make changes to the regulations governing the scheme. In December a court found the government approach to be illegal, the government appealed in January and we now await the conclusions.
If the government wins it will announce the results of its consultation and lay regulations to implement its conclusions. It is almost certain that it will decide to reduce rates for any solar installations since the 12 December to those it proposed in the consultation. DECC has explicitly said the rates won't be reduced below those they have proposed without a further consultation. Other issues such as the introduction of energy efficiency requirements are also likely to be introduced.
If the government appeal is rejected the rates prior to the consultation will be reinstated (or, more accurately, will never have been reduced). The government will then lay regulations to reduce the rates as soon as possible. It seems unlikely it could achieve this reduction much prior to 1 April 2012. There would, inevitably, be a further rush of installations taking advantage of the high rates between the judgement being announced (probably early February and the regulations coming into effect to reduce rates (around 1 April). This is unlikely to be welcomed by anyone in the industry who want a stable long term market.
Longer term
The government has promised a 'phase 2' consultation on the overall shape of the Feed in Tariff across all technologies. This will look, for example, at how rates are adjusted more effectively than the current chaos. If it wins its appeal we can expect that consultation rapidly. If it loses I would expect this to delayed whilst the implications are considered, particularly the impact on the budget.
Whatever the outcome the pressure from Treasury will be for the Feed in Tariff move to 9p per kWh for solar systems of all sizes. This is the level of subsidy offered to offshore wind and the government's Renewable Energy Roadmap made clear any renewable energy subsidy above this level will be carefully scrutinised. Once solar can compete at this level it will be much less vulnerable to short term policy shifts.

Sunday 15 January 2012

DECC's appeal. Still awaiting a decision!

All text below reproduced from Solar Trade Associations press release.

DECC was in the Court of Appeal today to request leave to appeal the High Court’s ruling of 21st December which concluded that its handling of the FITs review was unlawful. The judges failed to reach a decision today so we will not know whether DECC will be granted an appeal until next week at the earliest. DECC has just published the following statement in its website:

“The Court of Appeal has not yet decided whether to give permission for an appeal or made a judgement on the FITs case. The Court will wrap up the decision on permission for an appeal and a possible judgement if an appeal is allowed in the next few weeks. Once the outcome is known we will consider our options and make an announcement on the way forward to provide clarity to consumers and industry."

There is considerable level of uncertainty since the FiT Consultation was launched. The legal case has exacerbated this situation. The outcomes, although still uncertain, may lead to very different tariff scenarios.

· If the Government is not granted leave to appeal, the Consultation would be declared unlawful and the cuts would be nullified. Sources in the Court indicate that this is unlikely.

· If the Government wins on appeal, we are where we were before legal action began, ie the Government will consider all responses to its consultation proposals, including the proposal that a domestic system (up to 4 kWh) can expect to earn 21p from 1st April 2012.

· If the Government does not win on appeal, then the 43p tariff could remain in place for all registered installations until the Parliamentary process has concluded (expected to be 1st April 2012, possibly earlier).

The Association will send a communication to members as soon as any announcement is made. For more details please click here

Saturday 7 January 2012

DECC issues assurances for PV customers

While all the media attention has been focussed on the Judicial Review and the Government's ongoing appeal against the outcome, people (both installers and customers), have been in a quandry as to what the situation is for current installations taking place during this appeal period.

DECC have issued a notice on the REAL website HERE

The main body of this text reads:
  • If the Government wins on appeal, we are where we were before legal action began, ie the Government will consider all responses to its consultation proposals, including the proposal that a domestic system (up to 4 kWh) can expect to earn 21p from 1st April 2012.
  • If the Government does not win on appeal, then the 43p tariff remains in place for all registered installations until the Parliamentary process has concluded (expected to be 1st April 2012, possibly earlier).
This is indeed reassuring news, firstly that DECC obviously want the scheme to continue, and secondly that it shows anyone who is confident the Government will not win the appeal, that there is no better time than now to get a PV installation. At worst, you will still be getting 21p which on an optimum roof will provide a 9% return, and there is a possibility of a short period of reversion to 43p a unit.

Wednesday 4 January 2012

The Ayes are on the right, But DECC swings to the other side

As indicated before Christmas by Uncle Greg Barker, theGovernment have appealed against the High Court decision in December that the Government decision to drop off the FiT before the end of the consultation period had elapsed was illegal.
Anyways, the upshot is for potential owners of PV systems, and people who have installed after 12th December, that the worst that can happen is that your system will attract 21p a generated unit for the next 23 years. (We are already 2 years into the 25 year scheme), which works out on Rudge Renewable install costs a 9-10% ROI. (be aware of those 'double glazing sales' based companies)

Of course the other worst that can happen would be holding off having an installation waiting for the magic (and some (Greg) may say greedy), 43p to reappear, possibly at the end of January. By then, as we are finding, speculators are already booking installations anticipating the very short time period of 43p, which will soon revert to a lower rate.

The industry feels that if the rate is 'forced' back to 43p, the Government will deem this as Busting the Budget and will almost definitely drop the rate thereafter to a very low rate, such as 9p to compensate..

The 'Budget' is not taxpayers money, but simply a little bit of profit off the Power Companies already (as we have seen last year) obscene profits. The FiT costs pence for every bill payer every year, not pounds as indicated by a poorly misinformed Greg Barker.