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What happens next post Feed-In Tariff (FITs)?

 

In March of this year (2019), the Government Solar PV Feed-In Tariff incentive scheme will come to an end, and as such installers will not be able to access these incentives through registration with Microgeneration Certification Scheme (MCS).

Obviously, this a monumental change in the renewable market. At HIES, we feel that this shouldn’t be something to worry installers. This should be seen as an opportunity to work towards achieving higher levels of self-consumption to make their offering attractive to consumers.

This article is to shed some clarity on five key questions that keep occurring in our conversations with our installers.

1. What is going to happen post FITs?

Well, one thing is for certain, there isn't going to be U-Turn on the decision, even if Claire Perry MP (Energy & Clean Growth Minister) did suggest it would be “wrong” to provide solar for free back to the grid.

So please ensure all registrations for FITs are completed by March 31st, 2019.

Perry agreed "that solar power should not be provided to the grid for free" and the government would be working on the next steps for small scale renewables. Those next steps will come in the form of the Smart Export Guarantee.

2. What is the Smart Export Guarantee (SEG)?

SEG is the proposed replacement for government funded FITs. SEG’s focus is to ensure that small-scale generators are remunerated for the electricity they export to the grid.

The guarantee scheme in practice would see a legislative change to ensure all large energy suppliers (250,000+ customers) will have to remunerate small-scale generators for the electricity they export to the grid. In simple terms, energy providers will pay monies for the energy generated. However, there are still some questions unanswered that HIES have fed back in our consultation (SEG Response).

3. If there is no access to FITs, do I need to register with the Microgeneration Certification Scheme (MCS) for Solar and Storage?

To the best of our knowledge, the short answer is no.

According to the Napit website: “You can carry out microgeneration work under CPS alone (e.g. without joining MCS), this would demonstrate your competence and allow self-certification in England and Wales but you would not meet the eligibility requirements for Feed-in-Tariff”
Translating this in a post FITs world and until SEG begins, as MCS is not a government body and nor is it a UKAS accredited certification scheme, we cannot find a reason for you to pay the £30 to register your solar and storage products with MCS. This may change when SEG is introduced.

For access to the Renewable Heat Incentive (RHI), you will still need to comply with MCS requirements. 

4. What should I register post FITs?

At HIES we recommend you continue to register every renewable product with an oversight body for consumer safety. HIES, will continue to offer your consumers protection for any financial, legal and insurance issues that occur during the guarantee period.

We also recommend for the safe and controlled deployment of energy saving, generating and storing products and as a simple money saving alternative to MCS, you use register all installations for free with Flexi-Orb.

HIES has recently joined Flexi-Orb for a complete Solar & Storage Solution (read more here: HIES joins Flexi-Orb). Creating a central data entry registration system for Solar PV, Storage, Inverters and EV Charging Points. Registration and membership to Flexi-Orb will remain free throughout 2019 and provides a quick link to DNO’s, manufacturer’s, certification bodies, consumer codes and IBG providers.

5. What new products should I consider post FITs?

We firmly believe that consumers want to take control of their energy destiny. They want to reduce their energy bills and safeguard themselves from future energy price rises. Solar PV & Energy Storage combinations are two leading technologies that achieve those aims.

 

 


 

 

Are you considering joining HIES?
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Or complete our membership enquiry form

 

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Do you have a question?
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FIT Tariff >50Kw Deployment Band Has Now Reached Capacity

 

In a weekly report produced by Ofgem with regards to the FIT Deployment Caps, the >50Kw band has risen to 80% capacity. The result shows a 25% increase from the previous weeks 55%, showing a drastic 25% increase as the FIT Tariff draws to a close on April 1st.


The news will come as no surprise to those installing these systems as there has been a growing rise towards the cap over the previous few months, as installers look to fit as many systems as possible prior to the FIT tariff closing. However, the information does show that the >50Kw band is under pressure.

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Fig 1: The ’TP1 2019 Deployment ‘chart shows which caps have been filled in this quarter (red) and those that are still open (blue).

 

Along with other bodies representing the Solar Industry, such as the Solar Trade Association, we have requested more frequent updates from Ofgem to limit the risk of the capacity bands being filled to planned installations.

A spokesperson for Ofgem commented:

“It is worth noting that although these figures were published Friday (15th March), they represent the caps as of midnight on Tuesday (12th March), so there have been 3 more working days for people to apply and therefore contribute to the cap.
We are not planning on publishing more frequent updates. It is for generators and installers to negotiate the risk associated with closure, and Ofgem cannot offer advice beyond clearly stating the rules in our guidance.”

 

Adrian Simpson, Director of Policy, at HIES commented:

‘’Although this does not affect domestic installations (under 10Kw), which continue to perform at well beneath the caps, we are concerned that there is a very real possibility that businesses that have had Solar PV systems installed in this sector of the market will learn that they will not receive the tariffs promised long after those installations have taken place. The publicity that may follow this could further damage the market at a crucial time in its evolution. It’s challenging, because the Ofgem information will always be out of date, but we would urge installers in this sector to take a proactive approach in managing client expectations.”

 

 

Important Update

Ofgem this morning published an update to the deployment caps showing the >50KW cap has now been reached.

The information shows that the final installation to quality for the cap occurred on the 13/03, meaning that anything registered after this date will not receive the FiT. Ofgem have previously stated that it is the responsibility of the generator and the installer to manage this process and they will not be in a position to assist in any way.’

 

 


 

 

 

Are you considering joining HIES?
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Do you have a question?
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Or send an email to communications@hiesscheme.org.uk

HIES responds to the Smart Export Guarantee (SEG) Consultation

 

Earlier this year the Government put in place plans to end the successful Feed-In Tariffs (FITs) scheme and replace it with a Smart Export Guarantee (SEG). Since 2010, under FITs, over 830,000 households1, businesses and communities have been able to receive payments for clean energy that is both exported to the grid and generated for their own use.

As the Government moves away from a subsidy-free future, they have been looking to develop market-led solutions that are not reliant on subsidies. In January the ‘Future for Small-Scale Low Carbon Generation: A consultation on a Smart Export Guarantee’ was released and leading consumer protection organisation HIES (The Home Insulation and Energy Systems Contractors Scheme) responded raising its concerns with the transition.

“HIES has the aim of protecting the consumer before, during and after the purchase of any small-scale renewable product. We want the high levels of consumer protection to remain, and consumers to receive a fair price for the electricity they generate." said Adrian Simpson, Director of Policy at HIES

He continued: "We feel that subsidies have been a success, removal of them we feel will have a monumental impact on the number of consumers who wish to have renewable energy solutions installed in their homes, not to mention the detrimental knock-on effect this will then have to the installers.”

How will this impact installers?

As we already understood the risks to consumers, we wanted to know what the issues would be for installers, so we invited installers nationwide to participate in a survey and provide their opinions in 2018. We had 88 responses to the survey, which highlighted some shocking statistics:

  1. 56% of respondents believe there will be a 75% or more decrease in sales
  2. 74% of respondents believe there will be a 50% or more decrease in sales
  3. 68% of respondents anticipate 50% or more job losses
  4. 70% of respondents believe 50% or more firms will go out of business
  5. 54% of respondents anticipate 75% or more decrease in consumers buying Solar PV
  6. 82% of respondents anticipate 50% or more decrease in consumers buying Solar PV
  7. 54% of respondents believe 75% or more firms will stop doing Solar

 

Sometimes opinions can say much more than statistics and here is a selection of what our members thought the effects would be when FITs finish in March 2019:

“It will reduce business.”

“Devastating loss to an already damaged industry. The FITs are huge incentives to help people choose a sustainable energy source to help us cut carbon emissions."

"Quality installers will leave the industry and will bring cowboys into the industry, through lack of regulatory requirements as MCS will be defunct, putting homes at risk through poor installations and the use of unregulated equipment.”

“Further reduction in domestic retro-fit installations, and without any support the public will not understand 15-20-year payback periods unless they never plan to move home. Most installers will lose the additional business and lose well-qualified staff due to job losses.”

HIES are calling for:

  1. Clarity around tariffs. Will consumers easily be able to understand the tariffs and switch between them to get the best deal?
  2. A smooth transition between FITs and SEG, ideally without any regulatory gaps where installers can carry out.
  3. Increased competition for Microgeneration Generation Certification Scheme equivalence.

 


1 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/769601/The_future_for_small-scale_low-carbon_generation_SEG.pdf  

 

 

Are you considering joining HIES?
Call us on 0344 324 5242
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Do you have a question?
Call us on 0344 324 5242
Or send an email to communications@hiesscheme.org.uk

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