Reacting to the recently-launched feed-in tariff review, community-owned energy companies across the UK have come together to express their thoughts on the announcement as well as to discuss how to move forward past Energy Minister Chris Huhne’s decision to evaluate the FiT for systems above 50kW.
Since the introduction of the feed-in tariff on April 1st 2010, a growing number of community-owned companies have been established, concentrating on building renewable energy generation schemes across the country by utilising the funding mechanism of the feed-in tariff.
Thus far, the feed-in tariff for solar photovoltaics (PV) has been the key enabler for these community groups to begin to develop viable business plans for locally-owned renewable energy developments. PV has become the technology of choice for many of these projects.
Greg Barker said in November last year, “Community energy is a perfect expression of the transformative power of the Big Society. With the right combination of incentives and freedoms, community groups, businesses and organisations can get together to build a cleaner, greener future.”
However the launch of the FiT review poses a problem for these developers. The classification of systems above 50kW as large scale means that many well developed business plans will have to be abandoned as potential investors will have no certainty to invest.
OVESCo, a community owned energy company in Lewes, Sussex, was preparing for its first share issue to raise funds for the project that it has been developing over the past year. The proposed system is to be 98kW in size, which is large enough to power approximately 40 homes, however this will be put at risk due to this review.
Systems are not be eligible for the FiT payment until they have been completed, and the nature of the undefined timescale on this review process for systems of above 50kW means that work cannot commence without substantial risk of not getting it completed before tariffs are changed or abandoned.
Managing Director of OVESCo, Chris Rowland says, “It is infuriating that just as we are about to launch our first scheme that is in line with Greg Barkers big society ambition, we are hit but this lack of vision at the top which totally scuppers the plans of many community groups across the UK. Perhaps the Minister did not mean to destroy the plans of the groups he also wants to see succeed, but without a stable and viable feed in tariff, community energy will never happen.”
Barbara Hammond, Chair of West Oxford Community Renewables adds, “Our biggest installation so far is 100kWp of solar PV on our local secondary school. It seems very strange indeed to be suddenly considered a large developer of PV. As a small community-owned SME, the income stream coming into our community from our projects will have a huge impact on our ability to address climate change in a deep, long-term way. We are only just starting to understand how powerful our model could be and are starting to share our learning with other communities. This momentum will be lost if the structure and size of the FiT is constantly in question.”