The 50kW+ feed-in tariff (FiT) has been breached for the second time this year, sparking a new contingent degression in rates that are to be paid to new installations from 1 July onwards.
The latest tariff update from Ofgem shows that 3.2MW of PV systems ranging from between 50kW up to 5MW were added in the three days to 3 June, breaching the quarterly cap of 14.5MW and triggering a 10% drop in rates for Q3.
This will mean that for the period between 1 July and 30 September, the following FiT rates will apply:
- >50kW-250kW 2.09p/kWh
- >250-1MW 1.74p/kWh
- >1MW-5MW 0.62p/kWh
Among many of the complaints levelled against the current FiT regime is that all three of these bands are grouped together under one tariff rate. This means that a cap breach could occur following installs of any size above 50Kw; a fact which is a significant concern to the Solar Trade Association.
Chief executive Paul Barwell told Solar Power Portal this morning: “The STA has been analysing the projects from the Ofgem database, and in each quarter we have noted that the 14MW cap has been pushed over its threshold by a 3.8MW project in quarter one and a 2.2MW project in quarter 2. The real frustration is that all three tariff bands within the >50kW degress by 10% because of these projects.
“We are working on solutions to this with DECC, but ultimately the problem lies in the woefully inadequate caps that have been provided within the constrained budget. This needs fixing, and fixing fast as we forecast that each quarter will be triggering a 10% degression.”
Ofgem’s update also showed that deployment within these bands far outstripped that of other systems, with less than 2MW of <10kW solar systems deployed in the week to 7 June.
Deployment within this band, which covers residential systems once so popular under the scheme, has failed to come anywhere close to the cap brought in earlier this year. Since the start of the new FiT regime on 8 February, just 39MW of sub 10kW solar systems have been deployed, with unused capacity carried forward to allow around 77MW.
Similarly, around 14.7MW of 10-50kW systems have been recorded by Ofgem for the same period, with the current allowance for Q2 sitting at 25.7MW. Only eight installs were reported by Ofgem between 31 May and 7 June, contributing just 982kW towards the cap.
These figures contrast with those of standalone PV systems, which breached their cap back in February by more than double, with over 13MW recorded for a 5MW limit.
There has been no word for the Department of Energy and Climate Change on the possibility of redistributing the caps to reflect the areas of activity, or any action to increase deployment within bands failing to approach their caps. However, Barwell added that this would not prove to be a solution in any case.
“Having surveyed our members, there is no appetite for taking underutilised capacity from the underperforming <10 and 10-50. The automatic degression at 1.5% is shallow enough that future cost reductions and further proposed tweaks to the scheme could allow growth in deployment, but it is still too early to tell,” he said.
“Ultimately more money is needed to boost deployment in solar and we think DECC should honour their policy priorities in the consultation ‘to redistribute underspend towards solar PV to continue supporting a trajectory towards subsidy-free deployment’.”