FITness Review

It’s almost 12 months since the Feed in Tariff was formally launched – the first step towards creating a mass market for microgeneration. Bill Rumble, Commercial Director for specialist installation company, Mark Group reviews success to date and outlines his predictions for Solar PV for the year ahead.



"The Feed in Tariff (FIT) was introduced by the last Government in April 2010. Its main aim is to encourage homeowners and other small scale power users to generate their own electricity by harnessing the sun’s energy.



"FIT rewards small scale power generators for the amount of electricity they produce and the amount of electricity they sell back to the National Grid – calculated as ‘Import’ and ‘Export’ tariffs. Of course consumers also benefit from a reduction in their standard ‘brown’ electricity bills from their utility provider.



"When the Feed in Tariff was first announced it received a very warm welcome from the industry. Index-linking the tariffs, introductory rates being held for the first 24 months and tax exempt payments, packaged it all very nicely for generating wide consumer appeal. However, for the ‘man on the street’, solar power was still a futuristic fantasy.



"The Feed in Tariff was launched to boost the industry and drive consumer adoption. It is achieving this, but we are talking about a massive shift change in lifestyle, in spending habits and in educating consumers and business owners about the world of renewable technology. It’s no secret that we were a little slower off the starting blocks than many of our European neighbours but I believe the challenge still remains in driving a consumer awareness programme.



"It’s been interesting to see that a number of companies across the industry have turned this challenge around and used the Feed in Tariff to run their versions of a ‘rent a roof’ scheme. The idea behind these is to overcome the initial capital outlay barriers, which can be equal to the cost of buying a small family car and understandably put many people off. Providers have attracted customers by offering to install solar PV systems for free and in return receiving the Feed in Tariff payments themselves. Meanwhile, the consumer benefits from reduced rate electricity bills, as well as doing their bit for the environment and potentially adding value to their property.



"Others in a position to make the investment required, clocked the benefits of FIT early on and are already seeing the positive impact on their bank balances. For example, a customer of ours who lives with his wife in Leicestershire, had a Solar PV system installed at his house, in March 2010. This timing fell within the catchment period eligible for the Feed in Tariff and because Mark Group and our partner suppliers are accredited under the Microgeneration Certification Scheme (MCS), the installation qualified for payments. The system cost £14,000 to install and in August the couple received a credit from their utility supplier for over £200. In addition, their ‘brown electricity’ bill for the same quarter in 2009 had been £190, in 2010 it dropped to £129, so an additional saving of £61. A happy customer."



Opinion

"Speaking as someone who is passionate about the microgeneration industry I think the Feed in Tariff is a well thought out and very reasonable incentive for encouraging consumer adoption of renewable technology. We are in the honeymoon period at the moment however and last October’s Spending Review stated that the Government will review FIT in 2012 – unless ‘higher than expected deployment requires an early review’. A potential cut of 10 per cent has been identified as part of the review, but its fair to assume this will be governed by adoption rates and how well the industry increases its capabilities.



"As far as FIT is concerned, the best advice I can give is to work with the tools the Government has provided us with. Take advantage of the early bird rates and buy in before the April 2012 deadline. That said, consumer renewable technology adoption levels could increase dramatically in June of this year. At time of writing, the Renewable Heat Incentive (RHI) is eagerly anticipated by everyone across the industry. Proposed by the last Government and confirmed for launch later this year in the 2010 Spending Review, RHI will complete the Clean Energy Cashback programme, financially rewarding homeowners and businesses for the microgeneration of heat. I think the launch of RHI will be the turning in point in driving consumer awareness about the benefits of renewable technology and, we will see people being driven by their heads rather than their hearts as they realise that microgeneration is now a smart choice."



www.markgroup.co.uk