DECC promises summer decision on feed-in tariff eligibility
Friday 27 March 2009
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| Installation firms could go under if customers have to wait until their renewable energy systems qualify for feed-in tariffs, industry experts warned yesterday (photo: Solarcentury.com) |
Government officials have insisted they will be making an announcement this summer on which renewable energy projects would qualify for next year's feed-in tariffs scheme.
But, with grants under the Low Carbon Building Programme coming to an end this June, the officials were unable to say yet whether the government will fund the gap until the renewable electricity tariffs come into force next April.
Industry figures spent all day yesterday attempting to press the Department of Energy and Climate Change to clarify whether renewable energy systems being installed now would be allowed to take part in the tariffs scheme next year.
The concern was that if they are not, householders and businesses will wait until tariffs come into force before opting to install green energy equipment - halting cash flow for renewable energy installers.
Speaking at the Renewable Energy Association's feed-in tariffs summit in London yesterday, REA director-general Philip Wolfe urged the Department to make it clear early on which projects would be eligible for the tariffs as soon as possible, "otherwise people will sit on their hands."
With potentially tens of thousands of jobs at stake in this country, Jeremy Leggett, executive director at solar PV specialists Solarcentury warned of the funding gap: "The industry is currently leaning over a cliff.
"It is not a 'gap year' - it is a death year. How would it be if you then bring in a feed-in tariff and it's just the Germans and the Chinese left to come in and pick it all up?"
In response, DECC official Andrej Miller said: "We recognise the problem - we actually would be looking to make an announcement before the consultation to give some idea on which projects will be eligible."
However, Mr Miller was unable to say yet whether funding would be offered for the "gap" after the Low Carbon Building Programme comes to an end and before tariffs come into force for electricity in 2010 and heat in 2011.
"If my minister didn't announce anything, it's not for me to make an announcement on that," he said.
Consultation timetable
The process of setting the electricity feed-in tariffs for installations below 5MW in size will see the public consultation carried out this summer on the design of the scheme and potential tariff levels.
In the autumn, there will be discussions on the changes to the electricity licencing system needed to enact the tariffs scheme. Regulations should then be put before Parliament towards the close of 2009 or early 2010, such that the tariffs should come into force on April 1.
One of the key complaints yesterday to the energy minister was that the feed-in tariffs scheme is taking so long to put in place.
But while energy minister Mike O'Brien himself said the government had to make sure the scheme was perfectly formed (see this New Energy Focus story), his staff later gave a more pragmatic impression of their attitude to getting the scheme in quickly.
With the urgency needed to get this up and running it is important to note that we won't get it entirely right from the start.
This was welcomed by industry figures concerned at the minister's views expressed earlier.
Stephen de Souza, who heads up the renewable energy incentives unit at DECC, said: "We are not going to design the perfect system - we are trying to get a system that is broadly acceptable in place and we will have to look at it along the way.
"We are going to have issues and with the urgency needed to get this up and running it is important to note that we won't get it entirely right from the start," the DECC official added.
Mr de Souza could not comment on the levels being suggested for tariffs, as government consultants are yet to report back with proposals.
However, he said the tariffs scheme would see banding for different renewable energy technologies and for different scales of installation, but he said the government was keen to avoid much more complexity than that.
Mirroring advice from industry, he pointed out that the tariffs system should be as simple as possible, as it would be aimed at attracting "non-experts" to invest in renewable energy, rather than being designed for energy professionals.
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