Doncaster City Council is aiming to install solar PV on around 6,000 council homes in order to tackle rising fuel poverty in the area, but it is not yet known whether a potential cut to the feed-in tariff would place the project in jeopardy.
The council recently completed a pilot scheme in the Highfields area of the city, and a subsequent investigation into council-owned homes found more than 6,000 properties – almost one-third of its 20,000 stock of council properties – that could receive solar installations.
A report was then duly prepared and was put forward and discussed before the council chamber earlier this week, detailing plans to invest around £1.2 million of the council’s own money to complete installations on an initial tranche of the council’s estate.
Finance would be taken from Doncaster’s Housing Revenue Account and no borrowing costs would be realised from the initial tranche, however the council said it would court institutional investors to help finance other homes suitable for PV in the area.
Around 270 houses and nine high rise tower blocks containing a total of 596 flats would initially receive PV installs. Each individual house is planned to receive a 3kW system, five tower blocks would receive 20kW systems, two blocks would receive 15kW systems and the remaining two towers would be fitted with 12kW systems.
While there has been no target date for the first installations to be made, Northern Power Grid has already received a network connection application for the council for all 279 systems and the DNO is due to issue a response regarding how many connections can be enacted by the end of this month.
The council expects to export around 50% of the 864,220kW those installations would generate annually which, when combined with electricity savings in communal areas, would create total year one income of £115,555 according to estimates included in the report.
Workings in the report show the council expects to receive approximately £2.8 million in income from the installations over their 20-year lifetime, combining the feed-in tariff rate and export income, while simultaneously helping each household save an average of £150 per year on their energy bills.
The total installation cost has been forecasted by the council to be around £1.2 million including energy performance certificates, however additional costs incurred through data collection and the replacement of inverters 12 years into the system lifetimes would take the total costs to in excess of £1.5 million. The council therefore expects the solar installations to create a surplus of around £1.26 million over the course of 20 years, finance which would then be reinvested into the local economy.
However the workings in the report use the feed-in tariff set to come into force on 1 October as a starting point and take into account expected degressions from there. Last month the Department for Energy and Climate Change warned that further cost-cutting measures could be included in a wider review of the feed-in tariff later this year, a move which could see the rates paid for small-scale installations cut significantly further in order to rein in costs under the Levy Control Framework.
A report issued by think-tank Policy Exchange in July labelled the feed-in tariff an “enormously generous” scheme and highlighted how annual returns are now up to around 12%, far higher than the 5-8% originally forecasted by DECC. Policy Exchange argued that DECC could cut the FIT to within that 5-8% boundary and still stimulate installations.
The proposed removal of pre-accreditation would also see customers unable to receive a feed-in tariff quote prior to development, meaning that institutional investors would not be granted certainty to invest in such projects.
Changes to the feed-in tariff and the cancellation of RO support for sub-5MW projects are expected to have a considerable impact on community energy schemes, although DECC has insisted the department will review support given to community projects under the wider feed-in tariff review later this year.
Last week Scottish energy minister Fergus Ewing and Wales’ natural resource minister Carl Sargeant addressed DECC and energy and climate change secretary Amber Rudd to warn of the “significant damage” the proposals would do to community energy programmes and called on the department to engage in further dialogue.
Doncaster Council had yet to respond to questions asked by Solar Power Portal at the time of publication.