Our friends at the Communities and Climate Action Alliance (CCAA) have an important announcement for anyone doing or thinking of doing a community energy project. In a nutshell, the UK government are poised to radically change the Feed In Tariff.
It is likely that this week will see an announcement about radical cuts to the FITs (see text below for more details). To try and head off what might be disastrous impacts on social enterprises and community projects the CCAA and others are calling for the establishment of a ‘Community Tariff’ for solar PV projects. Under this arrangement, solar power systems installed on not-for profit community and social organisation buildings (exact wording to be agreed) would be paid a premium over the domestic payment rate.
This could be at a lower rate than the current level (solar prices are falling) but would be at a level adequate to ensure that these new businesses do not collapse.
This needs to be done fast, and first we need good evidence. If you are a community energy project and concerned about this we need you to act NOW by filling in our survey. This asks some simple questions about the outputs from your existing / proposed project and also asks you to estimate the impacts of various levels of FITs cuts.
Your first action: fill in the survey
Once we have this information we will be better equipped to lobby and we will invite you to join us in that work. We will send out more information and invite you to lobby and to encourage others to do the same. You can of course write now to your MP; some people are already emailing Nick Clegg specifically around the pressure from the Treasury that appears be leading to this situation.
Second action: please let us know that you are interested and active by sending an email to the Low Carbon Communities
with your contact details, project name (and website etc.). That way we can keep you briefed.
If your are a Co-Op, then a spreadsheet of energy co-ops is being developed. You can fill in your details on this shared spreadsheet.
Third action: if you know any other community energy projects, co-ops, social enterprises that might not have been contacted please pass this on a s a p, and ask them to fill in the survey.
THIS IS URGENT: Please do this today Monday (though if you receive this later, don’t worry, we still need / want your information). We need to act before any announcement is made (possibly on Thursday) but we may need to keep the pressure up after that. We will keep your briefed if you give us your details.
There is no doubt that Feed-In Tariff has been a huge success in promoting solar PV systems. It is also clear that this success is bringing problems – the government is likely to spend much more than was estimated. According to a recent article “Intense discussions are taking place about precisely how far to cut the small-scale solar “feed-in tariff” (FiT)… Some officials in DECC are calling for a reduction in the subsidy by three-quarters, according to industry sources.”
As a result there is likely to be a significant reduction in the rate paid per kilowatt following the current review. If the rate is cut it will mean households get less financial reward, although they will still profit from their investment.
But others will also be affected. Many new social enterprises and community-based projects have sprung up to promote and install PV systems. These are often operating on a larger scale than the purely domestic, working on community buildings including churches and schools and also in some cases homes owned by social housing organisations. Not only do these enterprises deliver more power than a single home, they also act as focal points for the developing UK solar industry, helping build expertise, creating jobs, and promoting community engagement with this new technology.
These larger community scale projects are now at risk in the review. If their income from FITs falls drastically new projects may be unable to attract the investment they need and existing projects will find it difficult to pay back loans as agreed. But it would be quite possible for the government to support this developing business sector while also cutting back the rewards to individuals.
This could be done through the establishment of a ‘Community Tariff’ for solar PV projects. Under this arrangement, solar power systems installed on not-for profit community and social organisation buildings would be paid a premium over the domestic payment rate. This could be at a lower rate than the current level (solar panel prices are falling) but would be at a level adequate to ensure that these new businesses do not collapse.
The Communities and Climate Action Alliance believes that such a Community Tariff is justified and desirable. It will help ensure continuity in this developing industry and that social enterprises avoid collapse with the loss of jobs and the collapse of financial deals, many of which have relied on small investors who care about the future of their communities enough to invest in these systems.
The Alliance and other bodies are looking to build support for this proposal. We invite anyone with an interest in this new industry to work with us. We will look to work with social enterprises, charities, housing associations, energy agencies and local councils. One challenge will be to agree the nature of the ‘community energy’ sector.
We are looking for a fair settlement from the government to ensure that the UK’s solar energy sector does not collapse. This may only be a small part of a wider programme to cut carbon emissions but this sector is playing a key role in developing the local innovation and action that will be need to meet the national targets.