News

Goodbye to feed in tariffs

2008 was a year to remember. Not only did the government of the time put the Climate Change Act on the statute book but they also announced the feed in tariff (FiT) scheme, which came into effect in April 2010. It was designed to support the propagation of microgeneration (up to 5MW), which included small scale solar, wind, hydro, anaerobic digestion and micro combined heat and power (CHP). For solar PV the contract term for receiving the subsidies was 25 years and 20 years for other technologies. In March 31st of 2019, the feed in tariff subsidies came to an end for new installations after tapering from an incredibly generous 54.17p/kWh (for retrofit PV installations up to 4kW) to 3.79p/kWh for PV installations up to 10kW and 4.03p/kWh for PV installations between 10-50kW.

In today’s economic environment for new small scale renewables, the level of tariffs paid to the earliest subscribers seems outstanding, given that each electricity bill payer was underwriting the cost. The scheme was certainly successful in spreading the use of PV (the most popular of the technologies) but criticism was levelled at it because only those who could afford to raise the considerable purchase price of the equipment were able to benefit. Community energy schemes then became the best way to spread the financial rewards from receiving FiTs more widely, as even if you were living in a flat without owning your own roof, or had less disposable income than others, you could in theory become a shareholder in a community energy scheme and reap some financial return from getting involved. Several of the earliest community energy schemes have thus done very well financially and gone on to help newer community energy groups start-up by way of their community benefit funds.

Norwich Community Solar (NCS) was started in November 2017 and has not yet installed any PV generation or received FiT subsidies. We are part of a ‘new breed’ of community energy social enterprises that are seeking working relationships that do not rely on subsidies. The route to market for our energy is therefore a critical consideration in ensuing that we earn sufficient revenue to repay our debt to our shareholders as well as offer them a fair rate of interest on their investment in our schemes. It means that we have to be very careful in the preparation of our projects, which we model to reveal the impact of the costs and the returns we expect to gain for years ahead, There is no question that the risks for unsubsidised community energy have changed but we are confident that as the climate crisis deepens and more people realise that they can’t wait for government to respond on their behalf, we will be successful in making our contribution count.

We are excited by the rising interest in our aims and the possibility of collaborating this year to set up our first generator that our local community can stand behind. We will release more details of this project nearer the time we come to raise the finance from those that want to invest in us. We feel that we will offer not only a service to the buyer of our clean energy and our investors, but also offer a creative expression for pent up frustration at the lack of sufficient action to address climate change we see all around us. We hope this will be a catalyst for change, as once we have proven it is possible others may want to work with us in Norwich and Norfolk to add momentum to our movement for cleaner air, community resilience and capacity in the years to come. So it may be good bye to the FiTs, but as we continue to grow in number through membership of our cooperative, we are confident that better, more sustainable community engagement is developing.

If you would like to join us, please go to our membership page to find out more.