FITs review update:
Further to the government’s announcement on the proposed changes to Solar Feed-in Tariffs (FITs), we would like to provide an update on how the fast track review of FITs is affecting the delivery of our Solar Communities 2011 scheme.
We have managed to secure investment to allow the Solar Communities scheme to continue up until the end of March 2012. The cuts have dramatically reduced the rate of return for investors, which has meant that the terms of our offer have had to be re-negotiated.
Community buildings and businesses in Cornwall and Devon will still be offered the installation of PV panels completely FREE of charge. Originally the export element of the FiT was also offered but unfortunately this can no longer form part of the Solar Communities offer. The Solar industry has mounted a legal challenge which could possibly see the FIT revert to its original rate but as the timescales for a decision is unknown we must proceed with the knowledge we currently have. Community Energy Plus is confident that we have been able to negotiate the best possible offer at this time.
£20 million is available now for investment in roof-mounted Solar PV systems on community facilities in Cornwall, installed before March 2012.
The introduction of Feed-In Tariffs (FITs) in April 2010 has provided incentives to encourage investment in small scale low carbon electricity in return for a guaranteed payment for the electricity generated and exported. Although this new model to stimulate the microgeneraton market offers opportunities for buildings to start generating their own energy, many organisations lack the finance to invest in their own renewable energy systems and are wary of the limitations of conventional ‘rent a roof’ offers, at a time that access to grant funding to help community buildings with such initiatives has been greatly reduced.
In response to the opportunities created by the Feed-in Tariff and challenges experienced by many organisations, Community Energy Plus has been working with a number of Cornwall-based Solar PV companies to arrange the finance required to enable both commercial and non-commercial organisations to benefit from the green electricity generated by roof mounted Solar PV systems.
A multi-million pound fund has been secured for investment in roof mounted solar PV systems on comm
unity and commercial buildings in Cornwall and Devon where it is possible to install the technology before the end of March 2012.
Aims of the programme
- To secure multiple benefits of the renewable energy revolution for the communities of Cornwall and Devon.
- Ensure local communities can benefit from the time-limited opportunity presented by the Feed-in Tariff.
- Social benefits: Increase local energy security and supply
- Environmental benefits: Reduce carbon emissions
- Economic benefits: Supporting local installers will provide a boost to the local economy while scheme participants will enjoy direct financial benefits.
What’s in it for your building?
- Free electricity, if consumed at times when the electricity is being generated by the system.
- Your building will be contributing to the local supply of clean energy, supporting Cornwall and Devon’s move toward sustainable green energy production while reducing your building’s carbon footprint.
Is your building eligible?
Examples of eligible buildings:
- Village hall / community centre
- GP Surgery
- Charity or Social Enterprise
- Private or Church Schools
- Farm buildings
Orientation: Ideally south facing, but we may still consider your building if it is east or west facing, depending on the pitch of your roof.
Location: Cornwall or Devon.
Building ownership: Freehold/Leasehold – if there is a mortgage on the building you will need to provide evidence of ownership as your mortgage company will need to be notified.
If you are unsure whether your building is eligible, please contact us.
How your building can participate in this solar offer
1) Contact Community Energy Plus to register your interest. You’ll need to complete a short form which is available from our website or email or post on request.
2) A no-obligation site survey will be arranged with appropriate accredited installers.
3) You will be advised of the outcome of the survey, including the size, design and annual output of the Solar PV system suitable for the roof of your building as well as the potential savings and income you could receive through the export tariff.
4) If required, Community Energy Plus will have a face-to-face meeting with you (and your committee members if appropriate) to present details of the proposed solar PV system, provide information about the potential installer and the contract as well as answer any questions you may have.
5) Once you have agreed the contract the required planning and national grid connection applications will be arranged and submitted. Responsibility for securing planning permission will be negotiated on a case by case basis. Costs will be held by the installation company but you may be involved in the process if you can add value to the application.
6) When the necessary planning and grid applications are in place the PV technology will be installed. Please note that installation must take place before the end of March 2012 in order to take advantage of this time limited offer.
Installers/investors involved in this offer
What does the scheme offer all parties involved?
Installer / Investor
Roles and responsibilities:
- Providing the finance for the offer.
- Carrying out the site survey and identifying the appropriate solar PV system.
- Paying for all costs associated with gaining necessary permissions, installing technology and its maintenance over the 25 year lease period.
How the investor will benefit: They will receive the generation and export element of the Feed-in Tariff.
Community Energy Plus
Roles and responsibilities:
- Putting together the initial package with installers and investors
- Identifying suitable buildings and co-ordinating site surveys
- Liaison with relevant people at your organisation to provide full details of the offer and answer any questions you may have.
- Providing you with impartial advice on the best solutions available to you, even if this includes not taking advantage of this offer.
- Community Energy Plus is acting solely as a referral agent, independently aiding eligible customers in meeting their needs for a sustainable energy supply and low carbon future. This may include choice of technology, financing arrangements, evaluating technology output and use of energy generated. All contractual arrangements, if agreed, will be directly between the Installation Company and participating building. Community Energy Plus will not be able to provide legal advice.
How Community Energy Plus will benefit:
We will receive a one-off fee from the installer, allowing the maximum benefit to be retained by you.
As a registered charity and Social Enterprise Mark holder, income generated by this project will help support our charity’s objectives of supporting projects to reduce CO2 emissions and fight fuel poverty in Cornwall.
Roles and responsibilities:
- The initial contact to register your interest is on a no-obligation basis
- Access to building for site survey
- Decision needed within 30 days if you wish to accept the offer made to you.
- Access to building for installation and maintenance over 25 year lease period.
- You will need to inform your insurer that the technology is being installed on your building as it will need to be added to your policy. Many insurers do not charge for this additional cover.
How you will benefit
- Free electricity if consumed at times when the electricity is being generated by the system (daylight hours).
- Ownership of the PV panels at the end of the 25 year lease. Panels are expected to still be 80% efficient after this period so you will still benefit from the free electricity in addition to an income by selling the unused electricity to the National Grid in the post Feed-in Tariff era.
- Your community building will be contributing to the local supply of clean energy, supporting Cornwall’s move toward sustainable green energy production while reducing your building’s carbon footprint.
Benefits to participating buildings
The calculations below are for illustrative purposes only and are based on the following assumptions:
- Each kW installed will generate 1,000 kilowatt hours (kWh) a year
- Average unit cost for electricity purchased by building is 14pence per kWh
|Size of system||Amount of electricity generated per year||All electricity produced is used – savings on energy bills per year*|
|5 kW||5,000 kWh||£700|
|10 kW||10,000 kWh||£1,400|
|15 kW||15,000 kWh||£2,100|
|20 kW||20,000 kWh||£2,800|
|25 kW||25,000 kWh||£3,500|
|30 kW||30,000 kWh||£4,200|
|35 kW||35,000 kWh||£4,900|
|40 kW||40,000 kWh||£5,600|
|45 kW||45,000 kWh||£6,300|
|50 kW||50,000 kWh||£7,000|
*These prices do not account for inflation and Retail Price Index rises or future electricity cost increases.
Frequently Asked Questions
Q: Will this cost us anything to take up this offer?
A: No – All costs are covered by the installer, unless your contract requires you to submit your planning application. However if you wish to engage independent legal advice it could incur costs for your organisation.
Q: What will happen if we sell the building?
A: The lease contract will need to be passed onto the new owner of the building. As standard energy prices continue to rise, having a PV system installed should improve the value of your building and its desirability to potential new owners who will be able to enjoy the benefits of free electricity.
Q: Will the PV system need regular maintenance?
A: The maintenance of the technology will be the responsibility of the installer.
You may need to provide regular meter readings to the energy company to determine the number of units generated and used.
Q: I’ve heard about changes to Feed-in Tariffs – how safe is the income offered by this scheme?
A: This offer is only valid to buildings where it is possible to install the PV technology before the end of March 2012 in order for the installer/investor to register for the Feed-in Tariff (FIT) rate of 32.9p per kWh generated, which may be reduced after this cut-off date. Once registered, the tariff will be fixed in a 25 year contract which will be Retail Price Index linked.
Future changes to FITs are likely to affect the availability of future tariffs but will not affect current contracts. This is why Cornwall has recently experienced a solar farm gold rush, as investors have rushed to get large-scale solar farms installed before August 2011 after the FIT review reduced the tariff for schemes registering after this time.
For further information about Feed-in Tariffs, visit the Department of Energy and Climate Change’s website
Q: Should we wait for…
…technology to improve?
A: The efficiency of PV technology has not improved significantly over the last 10 years.
…Installation costs to reduce
A: If you have your own funds to invest in renewable technologies you may choose to wait until market forces reduce the costs. This free solar offer will be attractive to buildings that do not have sufficient funds to invest in renewables but is only available for installation of technology before April 2012.
…the FIT review to take place in April 2012?
A: This review has always been planned as part of the FIT development and may affect available returns for the installation of all technologies, with degradations in levels planned.
Q: What other opportunities are there to finance the installation of PV on my building?
Option 1: Buy the technology outright – this is a good option if you have sufficient funds available to invest in the PV technology yourself and take advantage of the full FIT income. Community Energy Plus can provide independent advice and contacts for proven, accredited local installers.
Option 2: Renewables funded by co-operative community investment. For an example of this approach see Community Power Cornwall (www.communitypowercornwall.coop)
Option 3: Bank finance – Some mainstream banks are willing to look into opportunities for financing projects that are eligible for the Feed In Tariff, a number of packages are currently in development.
Q: How much roof space do I need to be eligible for this offer?
A: The minimum size system available through this offer is 2kW which would need approximately 21m2 of roof space.
Q: How can I tell what the orientation of my roof is?
A: You can manually use a compass or find your building on Google Maps and check its orientation using the compass in the top left corner of the screen.
Q: What if our roof needs maintenance in the future and the panels need to be removed?
A: The initial survey carried out by the installer will check the condition of your roof and ensure that it is able to support the PV panels. The installer/investor will cover the cost of the installation only once. If future maintenance is required it is likely that you will need to pay the costs associated with removing and re-installing the PV panels. If the equipment is out of service due to building maintenance it is possible that you will need to reimburse the installer/investor for their loss of income, although this will be covered in your contract.
Q: Can we buy ourselves out of the 25 year lease if funding becomes available in the future?
A: Leases generally include a buy-out clause that will be related to time of installation, time of proposed sale and remaining years on the Feed-in Tariff contract.
Q: Why do I need to submit a recent electricity bill with my application?
A: Providing your latest bill will enable us to calculate the savings you may be able to make once a system is installed. You will be able to use this information when making a decision on whether or not you wish to proceed with the install. The bill will also provide us with a Meter Point Administration Number which will be required in order to progress your application.
Download Solar Communities 2011 Resources
For further information, contact the Solar Communities 2011 Project team on:
Community building applications: 01209 614975 ext 9220 or email: [email protected]
Business applications: 01209 614979 or email [email protected]