presentation on the feed-in tariff, solar pv and suitability for farm buidlings

1. Feed-In Tariffs Making sunlight a cash crop Philip Wolfe

2. Feed-In Tariffs - how to benefit Feed-In Tariffs (FITs) - the fundamentals Tariff levels for PV Who gets the cash & where it comes from How to ensure FITs work for your farm 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 2

3. The UK’s Feed-In Tariffs The three main value streams Generation tariff Savings on imported energy Export bonus Eligible technologies and tariffs Administration Renewable Heat 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 3

4. The 3 main value streams 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 4 3 2 1 Total benefit to owner = Generation tariff + Saving on reduced imports + Export bonus 1 2 3

5. The Generation Tariff Paid for every kWh generated; whether used by the system owner or exported back to the grid Level depends on: The renewable energy technology The capacity of the system The date of installation 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 5

6. FIT Eligible technologies Biogas from anaerobic digestion Hydro-power Solar photovoltaics Retrofit in existing property New-build (properties not yet occupied) Stand-alone (systems for pure grid-feed) Wind power Micro-CHP (non renewable) 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 6

7. Eligible capacities The FITs cover installations up to 5MW Except Micro-CHP only up to 2kW The tariff level depends on: So-called ‘Total Installed Capacity’ The capacity is per ‘site’ Additions based on cumulative capacity Installations must be accredited Systems under 50kW – MCS Systems over 50kW – ‘ROO-FIT’ 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 7

8. Ineligible installations Other RES-E technologies: Biomass, geothermal, tidal, wave, biofuel Hopefully to be reconsidered on review Systems over 5MW Second-hand and refurbished systems Pre 15th July ‘09 installations 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 8

9. FIT tariff levels 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 9 PV

10. The Export Tariff For every kWh exported to the grid The beneficiary gets the generation tariff Plus a premium for export, as follows A fixed rate of 3p/kWh has been set But you can opt out and negotiate a better price from an electricity supplier Opt-out decisions can be made each year 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 10

11. Duration of tariffs Tariffs are fixed for 20-25 years Except micro-CHP for 10 years PV is 25 years all others are 20 Tariffs are index-linked to the RPI Both generation and fixed export tariffs New rates will be announced annually For new installations tariffs change: Subject to degression Maybe at reviews (5-yearly from 2013) 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 11

12. Tax treatment Householders don’t pay Income Tax on The generation nor the export tariffs ... provided that it is for “households who use renewable technology to generate electricity mainly for their own use” Business has no special tax exemption but can offset costs against profit as usual No Enhanced Capital Allowances for PV (yet) 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 12

13. How the tariffs were set To achieve an “average 5-8%” return Would equate to roughly 12-year ‘payback’ We find that typical systems: Recover their costs ~ twice over the period That is equivalent to a 12-year payback We find that the best systems: Recover their costs 2½ to 3 times Equivalent to less than 10-year payback Index-link & tax break improves all this 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 13

14. Where the money comes from The scheme is set in law, but The government doesn’t pay for it It comes from a levy on electricity bills It’s collected and paid out by suppliers Who have a ‘levelisation’ system to share the costs fairly between them It is now part of their licence conditions Only small suppliers can opt out Others are called ‘FITs licensees’ 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 14

15. Who the money goes to The beneficiary is the system owner He can specify a ‘nominated recipient’ to whom is tariff payments can be made He nominates (and can change) which FITS licensee will pay over the tariff 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 15

16. Scheme administration Scheme is administered by Ofgem, who Maintain the register of FITs installations Oversee the levelisation process Accredit systems over 50kW Have issued guidelines on how it works For more details: www.FITariffs.co.uk 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 16

17. Issues with the FITs Public awareness Little government promotion Consenting Small systems ‘permitted development’ Larger developments less certain Tariff levels Financing No official finance available Finance providers’ knowledge; conditions 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 17

18. Project-specific issues Maximum capacity 5MW Accreditation required Pre-accreditation under ROO-FIT? Must use conforming meter Selection of ‘FITs Licensee’ Use of nominated recipient Timing: Degression; seasonality 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 18

19. Ownergy Plc Your renewable energy and tariffs expert Advise you in selecting the appropriate options Design and procure suitable systems Structure projects for financing Supervise installation & commissioning Register and manage the tariffs 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 19

20. Government growth forecast 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 20 kW kW kW Expected numbers of installations by size Source: DECC

21. PV FITs installations to date 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 21 Gross installed capacity to 2009 = 32 MW!

22. One of UK’s first solar parks 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 22 AD

23. One of UK’s first solar farms 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 23

24. All this assumes ... ... that the Government doesn’t tinker with the tariffs in the present Spending Review They shouldn’t (it isn’t public spending) But just to be sure; sign up at: wesupportsolar.net 13th October 2010 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe 24

25. Any questions? Websites About the Feed-In Tariffs: www.fitariffs.co.uk About the Renewable Heat Incentive: www.rhincentive.co.uk About Ownergy: www.ownergy.co.uk Feed-In Tariffs Philip Wolfe 13th October 2010 25 Sunlight cash crop through Feed-In Tariffs - Philip Wolfe