The dust has now settled on the Government's cut in the Feed in Tariff rates - they have been cut by more than half. MORE Renewables supported Friends of the Earth in their successful application for a judicial review - this found that the UK government had acted unlawfully in effectively implementing the cut before it had finished its public consultation. Two appeals by the government were unsuccessful, but by the time the process had run its course, it was too late for community energy companies to raise funds in order to fit PV panels for schools and the like.
The result of the much reduced Feed in Tariff is that, even with the price of PV panels reducing, it is only just about cost effective for a householder to do this on their own home. Typically the financial return is about 4% when you include both the FiT payment and the savings on electricity costs. This is more than building societies pay, and is index linked and tax tree - but of course you can't get your money out!
This lower rate of return means if MORE Renewables fitted panels to Schools and other community buildings, even if the users paid us for the electricity generated by the panels, the best return we could offer investors would be around 2%. This is really too close to zero, for us to take the risk of running a share offer and carrying out the installations. If we found that we had extra costs, we might be able to pay no return at all. With FiT tariff rates due to go down again in July the future for community-funding PV projects does not look good.
The result of the much reduced Feed in Tariff is that, even with the price of PV panels reducing, it is only just about cost effective for a householder to do this on their own home. Typically the financial return is about 4% when you include both the FiT payment and the savings on electricity costs. This is more than building societies pay, and is index linked and tax tree - but of course you can't get your money out!
This lower rate of return means if MORE Renewables fitted panels to Schools and other community buildings, even if the users paid us for the electricity generated by the panels, the best return we could offer investors would be around 2%. This is really too close to zero, for us to take the risk of running a share offer and carrying out the installations. If we found that we had extra costs, we might be able to pay no return at all. With FiT tariff rates due to go down again in July the future for community-funding PV projects does not look good.
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