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Generous Tariff Lures British Farmers Into Raising Solar Power Arrays December 21, 2010

Posted by Laura Arnold in Feed-in Tariffs (FiT), Indiana Utility Regulatory Commission (IURC), Uncategorized.
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Editor’s note:  The success of this feed-in tariff (FIT) program appears to be in sharp contrast to Rate REP approved earlier this year for the FIT offered by Indianapolis Power and Light (IPL). Only one FIT contract has been approved so far under the IPL program. IPL, however, is requesting some minor changes to Rate REP as a part of a Demand Side Management (DSM) case pending before the Indiana Utility Regulatory Commission (IURC). Indiana Distributed Energy Advocates (IDEA) has intervened in the IPL case. For more details, please contact Laura.Arnold@indianaDG.org or call (317) 635-1701.
December 15, 2010



GLASTONBURY, England — Michael Eavis is not your average farmer, but this year he is following the herd. Spurred on by a new tariff that pays individuals to produce their own electricity and sell it to the nation’s grid, Eavis has installed 1,100 solar photovoltaic panels on the roof of his dairy barn. He calls it his “Mootel.”

“I have wanted to do this ever since I built the barn about 10 years ago. The feed-in tariffs just made it much easier and more profitable. Everyone is thrilled to bits with the array. It is working really well,” he told ClimateWire.

“The panels will earn about £50,000 [$79,053] a year, so in 10 years we will have paid off the £500,000 [$790,398] we borrowed from the bank to build the array. Solar power is really clean — even more so than wind — and it is free. There is enough energy from the sun to power the whole world during the day,” he added.

Eavis is just one among a throng of people, including many farmers, who have leaped at the chance the tariff scheme offers both to make money and to get “greener.” In contrast to many other such schemes across Europe, the U.K. feed-in tariffs pay for all power produced, not just that exported to the grid. They also have the added attraction of being guaranteed for 25 years.

Of course, not every farmer can do this on the scale Eavis has. He is the sponsor of the 40-year-old Glastonbury Festival, a three-day music and performing arts event that draws 150,000 rock fans to his Worthy Farm, which is about 130 miles west of London.

But a lot of them are trying. Meanwhile, the new, austerity-prone British government, which inherited the scheme, is trying to maintain a stiff upper lip. Well aware of the retrospective changes being discussed in Spain to slash the cost of its runaway solar power sector, the government has pledged that, while new, lower rates could be implemented in 2013, there will be no backsliding.

“There will never be any changes made retrospectively to the feed-in tariffs,” a spokeswoman for the Department of Energy and Climate Change said.

Rate of applicants accelerates

Government figures show a phenomenal rate of uptake since the April 1 start of the scheme in the United Kingdom, with solar photovoltaic far and away the favorite technology. As of the middle of last month, 11,370 individual projects had been registered since the scheme started, representing a total of just under 44 megawatts of power capacity, and according to Ofgem — the government’s energy watchdog — the rate of applications is accelerating rapidly.

Of these, 10,552 were photovoltaic, which also accounted for 60 percent of rated power capacity; 699 were wind; 114 were hydro; and five were micro combined heat and power. Close to three-quarters of the total was domestic, with most of the rest commercial.

The government didn’t divulge how many of the applicants are households and how many are farmers. But Farming Futures, part of an agricultural think tank, has done a poll that found that 80 percent of farmers in the United Kingdom want to put solar photovoltaic panels on their roofs within the next three years — before any changes can be implemented in the tariff’s payout.

“We have seen a real appetite for investing in solar this year, and it is great to see so many farmers recognizing this opportunity to create an income and diversify, as well as contribute to developing a low-carbon economy in the U.K.,” said Madeline Lewis of Farming Futures.

Under the scheme a solar photovoltaic array with a capacity of 4 to 10 kilowatts will earn the owner 36.1 pence (55 cents) per kilowatt-hour of power produced and consumed on-site. The rate falls to 31.4 pence (49 cents) for installations of 10 to 100 kW and 29.3 pence (46 cents) for those from 100 to 5,000 kW — the range into which Eavis’ 200 kW array fits.

Worries about melting cables

All power exported to the grid earns 3 pence (4 cents) per kilowatt-hour, and in all cases, the tariff is guaranteed for a quarter of a century.

“Traditionally, farming revenue is quite seasonal. But now we are making money by creating clean energy, we have the peace of mind of another income, and we are doing our bit reducing our carbon footprint,” said farmer Michael Frankel, who installed a solar power array on his barn roof earlier this year.

There is one possible hitch. The Conservative-Liberal Democrat coalition government that inherited the scheme — and a £180 billion ($238 billion) budget deficit from Labour when it took power in May — has said it will not review the scheme before 2012 unless there is a higher-than-expected uptake.

It has not said what that would be, but a DECC spokeswoman said she expected the early review trigger level to be announced very soon “to give absolute clarity” — although she insisted that any review would only be of future rates.

The newly formed British Photovoltaic Association industry lobby group calculates that the U.K. solar market, with the feed-in tariff scheme securely under its arm, could reach 60 MW by the end of this year and climb to 1,000 MW by 2015 and 5,000 MW by 2020.

Eavis certainly has plans to expand his array, possibly before he has even paid off the bank loan to build the original, because the future income is already known and the duration of the income stream likewise.

“Most of the electricity will go to the farm, although some will also go to the grid. Ideally, I would like to get a second batch the same size as the first one, so we would have 2,200 solar panels in total,” he said. “But we have to make sure we have the right cables. Put too much down them, and they start to melt.”

Copyright 2010 E&E Publishing. All Rights Reserved.

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