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Impact of Feed In Tariff cuts: a view from a community generator
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by guest blogger - Liz Mandeville, Ovesco
This is what it is like to undertake a community solar roof. You work extraordinarily hard without pay, you struggle with all sorts of things you have never heard of (EIS tax relief, method statements) and with others you’ve heard of but never grappled with (VAT, contracts, leases), you discover that every problem solved, up to the very last minute, generates several more. And then it is all done, and your roof is going up and the sense of euphoria begins to steal over you.
It doesn’t overwhelm you yet, because it won’t be well and truly over until the system is installed, inspected and registered for the Feed-in Tariff. But the sense of achievement is profound. You have discovered that lots of people in your locality are concerned about climate change and energy security, ask questions, and appreciate the chance put their money where their mouth is. The money mounts up, people talk to you, ask you about insulation and how they can do something for their children and grandchildren, and hundreds of them attend the launch meeting. You are ready to go, and you are now well prepared to do it again, and again, on other roofs and for other people, extending the message, increasing the benefits.
Not surprising then that the decision by the Government, particularly one that says that it wants to be the greenest ever, to simply slash Feed In Tariff tariffs for community-scale solar has come as a bitter blow. So much for ‘big society’; those cuts are an axe to both greenness and community action.
Ovesco IPS in Lewes has enabled the local community to install a 98kW roof, expected to produce 92,000kWh of electricity each year, on the warehouse of the local brewery, Harveys. One part-time paid employee (we have received no grant funding) and lots of unpaid work by the directors have made it happen; we can pay our investors a reasonable interest rate, repay their investment over 25 years, cover administrative costs and make available a small but increasing sum for local renewable/conservation projects. But we can only just do it. Now the cut to the Feed In Tariff for installations over 50kW has made it much harder. Dis-economies of scale in virtually every activity required, from production of a share offer document to putting up scaffolding, will present community benefit organisations like Ovesco with a real headache. True, we have learned a lot, which will save us some long and frustrating meetings and telephone conversations, but that won’t cut the cost of legal contracts, printing, communications, etc, all of which will be required for each project.
We’re not giving up. We’re looking at a couple of new schemes, smaller ones, and obsessively going over and over the costs, the income and the financial planning. Will they work? Possibly. But would we have taken on community generation if we had had to work with the new Feed In Tariff (19p rather than 31p per kWh) from the beginning? Probably not. It’s all right to work yourself, for a few months, into a state of exhaustion if the result is going to be a community-owned, community-funded, financially sustainable solar power station. In fact it’s wonderful. But to try to do it for the first time on a small scale, against the odds? You’d certainly think twice.
The greenest government ever? . They’ve got a lot of making up to do from where we’re sitting.
Liz Mandeville
Ovesco Director