Following months of debate and speculation, Italian government officials have officially signed into law a new incentive structure for the country's Conto Energia, which sets solar feed-in tariffs (FITs).
According to the country's minister of economic development, these revisions will allow for the continued medium-term and long-term growth of the PV market while encouraging its self-sufficiency and minimizing the economic burden of FITs on individuals and businesses.
Beginning next month, when Conto Energia IV goes into effect, current FIT levels will be gradually reduced over the remainder of the year. However, in 2013, incentive levels will increase between five euro cents and 10 euro cents per kWh, according to an analysis by Germany-based market research firmEuPD Research. At this point, all other forms of funding for PV - including tax breaks and investment subsidies - will no longer be available.
The decree distinguishes between small systems and large systems, with rooftop installations under 1 MW and ground-mounted installations under 200 kW defined as small systems. A funding cap of 580 million euros is in effect from June 2011 to the end of 2012 for large systems. Under current pricing conditions, this level of funding would allow for an installed capacity of 2.69 GW.
In addition, Conto Energia IV provides a 5% FIT bonus to system operators that pay at least 60% of their investment costs (excluding installation costs) to companies in the European Union. "Asian and American producers will be hardest hit by this," EuPD Research predicts.
The impact and uncertainty of Italy's revised FIT structure are likely to be felt both in Italy and in the entire global PV market, according to market analysts from Jefferies & Co.
"While we believe the regulation is favorable for the PV industry in the second half of 2012 and beyond, the additional month of delay was extremely disruptive to the industry and will negatively impact second-quarter results for the group," the analysts wrote in a research note. "The question will be how quickly the Italian market can pick up." Another question is whether immediate demand pickup in Italy will prompt German buyers to accelerate their orders, believing that PV module prices have essentially reached their bottom.
Overall, however, the new Conto Energia is "substantially more positive than the first drafts and analyst expectations," the analysts wrote. In particular, encouraging components include the lack of a cap for rooftop installations up to 1 MW and the lack of a cap for ground-mounted systems up to 200 kW under self-consumption.
"This is positive to the original draft, which capped all ground-based systems regardless of size, but is a negative versus our last interpretation," the analysts noted. "Although farmers use electricity for pumping water and could benefit from this self-consumption regulation, and that farmers are a large market in Germany, we recommend that investors consider all ground based systems as capped until this market can be further studied."
Other analysts interpreted the entire decree more negatively. "Italy is no longer a big growth market," Wells Fargo analyst Sam Dubinsky told TheStreet.com.
"There have been so many subsidy proposals in recent weeks/months, it's tough to tell whether this one is any better or worse versus prior expectations," he continued. "In addition, with the market screeching to a halt due to subsidy uncertainty, any renewed growth is somewhat of an incremental positive. However, it is clear to us that Italy's growth prospects are dampened and the market can no longer carry the industry."
Italy's economic development ministry maintains that the ultimate effect will be positive and, in fact, predicts that the new Conto Energia will enable PV-generated electricity to reach grid parity in 2017.
Showing posts with label FIT. Show all posts
Showing posts with label FIT. Show all posts
Sunday, May 8, 2011
Tuesday, March 29, 2011
Europe's FIT Reductions Temper Growth Forecasts For Global PV Demand
Following very strong growth - 139% - last year, global solar photovoltaic (PV) demand is off to a weak start this year, according to the latest Solarbuzz quarterly report. Preliminary estimates of the first quarter of this year's (Q1'11) end-market demand in Germany show that levels are running at less than 50% of their Q1'10 levels.
The gradual price reductions seen so far this year have been insufficient in energizing the market, Solarbuzz says. However, in Q2'11, global demand is still projected to reach 7.4 GW, representing 77% year-over-year growth.
During Q1'11, module manufacturers have been expanding sales channels, taking on a broader range of smaller distributors and brokers in order to both place increased production volumes and obtain better factory gate prices. As a result, total downstream inventories in Europe - and, to a lesser extent, in the U.S.. - have built to unsustainable levels at the end of Q1'11.
By mid-year, the top five European markets will see feed-in-tariff (FIT) cuts - some as high as 45%. Consequently, Q2'11 demand will be stimulated by the rush to beat mid-year FIT declines, especially in Germany and Italy, Solarbuzz predicts. There will also be steady growth in other European markets, the U.S., Canada, China and India.
This year, module manufacturers are planning to raise shipments by 55%, while full-year demand is projected to increase by just 12%. After the demand peak in Q2'11, the industry will face an exceptionally challenging second half of 2011 (2H'11) as it addresses a supply/demand imbalance. A period of negative production growth will be necessary to avoid excessive inventory build.
Any major changes to government PV policies as a consequence of the nuclear disaster that has followed the earthquake and tsunami in Japan are not expected to impact demand until 2012. At the same time, the disaster's impact on the nine major plants engaged in polysilicon, wafer and cell production in Japan so far appear to be minimal.
"2011 will be a challenging year for the industry as it manages a slowdown in the market," says Craig Stevens, president of Solarbuzz. "Europe will not be the growth engine it has been in recent years, and manufacturers will need to access new markets or be exposed to the risk of rising inventories or production cuts during a period of falling prices."
By Q4'11, the market share of Chinese, Taiwanese and other rest-of-world producers is projected to increase to 74%, up from 66% in Q4'10. The leading thin film manufacturer, First Solar, and the lowest-cost Asian producers will be the least vulnerable to reductions in shipments during 2H'11, but all manufacturers can expect to face extreme price pressure by the year-end, according to the report.
Lower-cost Chinese and Taiwanese manufacturers are expected to continue to benefit from an increase in outsourcing of production from the major Japanese and Western solar manufacturers.
SOURCE: Solarbuzz
The gradual price reductions seen so far this year have been insufficient in energizing the market, Solarbuzz says. However, in Q2'11, global demand is still projected to reach 7.4 GW, representing 77% year-over-year growth.
During Q1'11, module manufacturers have been expanding sales channels, taking on a broader range of smaller distributors and brokers in order to both place increased production volumes and obtain better factory gate prices. As a result, total downstream inventories in Europe - and, to a lesser extent, in the U.S.. - have built to unsustainable levels at the end of Q1'11.
By mid-year, the top five European markets will see feed-in-tariff (FIT) cuts - some as high as 45%. Consequently, Q2'11 demand will be stimulated by the rush to beat mid-year FIT declines, especially in Germany and Italy, Solarbuzz predicts. There will also be steady growth in other European markets, the U.S., Canada, China and India.
This year, module manufacturers are planning to raise shipments by 55%, while full-year demand is projected to increase by just 12%. After the demand peak in Q2'11, the industry will face an exceptionally challenging second half of 2011 (2H'11) as it addresses a supply/demand imbalance. A period of negative production growth will be necessary to avoid excessive inventory build.
Any major changes to government PV policies as a consequence of the nuclear disaster that has followed the earthquake and tsunami in Japan are not expected to impact demand until 2012. At the same time, the disaster's impact on the nine major plants engaged in polysilicon, wafer and cell production in Japan so far appear to be minimal.
"2011 will be a challenging year for the industry as it manages a slowdown in the market," says Craig Stevens, president of Solarbuzz. "Europe will not be the growth engine it has been in recent years, and manufacturers will need to access new markets or be exposed to the risk of rising inventories or production cuts during a period of falling prices."
By Q4'11, the market share of Chinese, Taiwanese and other rest-of-world producers is projected to increase to 74%, up from 66% in Q4'10. The leading thin film manufacturer, First Solar, and the lowest-cost Asian producers will be the least vulnerable to reductions in shipments during 2H'11, but all manufacturers can expect to face extreme price pressure by the year-end, according to the report.
Lower-cost Chinese and Taiwanese manufacturers are expected to continue to benefit from an increase in outsourcing of production from the major Japanese and Western solar manufacturers.
SOURCE: Solarbuzz
Thursday, March 10, 2011
France Enacts Further Cuts to Solar FIT
French Minister for the Environment Nathalie Kosciuso-Morizet has announced a new, reduced solar feed-in-tariff (FIT) rate: 0.12 euros per kWh for both roof-mounted and ground-mounted systems over 100 kW in capacity. This new rate goes into effect today.
Ground-mounted systems will now receive FIT payments at least 57% lower than what was available in September 2010, according to Germany-based market research firm EuPD Research. Rooftop systems now face a 70% FIT reduction from September 2010's rates.
"There are difficult times ahead for these projects," says Markus A.W. Hoehner, CEO of EuPD Research. "These systems were planned using a completely different calculation model, and some of them will partly be recalculated."
FITs for smaller PV systems will be reduced by 20%, and over the course of this year, quarterly declines of 10 percentage points will go into effect, EuPD Research adds. Furthermore, last month, France announced a PV market cap of 500 MW.
"Such adjustments are ambitious but nonetheless necessary for the long-term remedy of PV price divergences in various national markets," says Markus Monssen-Wackerbeck, head of energy and utilities at EuPD Research.
"The industry should use this pressure to bring high systems prices in the country down to a competitive, European level," Hoehner adds. Figures from the current European PriceMonitor published by EuPD Research show that, on average, the costs for a French PV system under 10 kW are approximately 4,400 euros and peak at 6,000 euros.
SOURCE: EuPD Research
Ground-mounted systems will now receive FIT payments at least 57% lower than what was available in September 2010, according to Germany-based market research firm EuPD Research. Rooftop systems now face a 70% FIT reduction from September 2010's rates.
"There are difficult times ahead for these projects," says Markus A.W. Hoehner, CEO of EuPD Research. "These systems were planned using a completely different calculation model, and some of them will partly be recalculated."
FITs for smaller PV systems will be reduced by 20%, and over the course of this year, quarterly declines of 10 percentage points will go into effect, EuPD Research adds. Furthermore, last month, France announced a PV market cap of 500 MW.
"Such adjustments are ambitious but nonetheless necessary for the long-term remedy of PV price divergences in various national markets," says Markus Monssen-Wackerbeck, head of energy and utilities at EuPD Research.
"The industry should use this pressure to bring high systems prices in the country down to a competitive, European level," Hoehner adds. Figures from the current European PriceMonitor published by EuPD Research show that, on average, the costs for a French PV system under 10 kW are approximately 4,400 euros and peak at 6,000 euros.
SOURCE: EuPD Research
Tuesday, March 8, 2011
Flexible French FITs: Higher Biogas, Lower PV Tariffs Coming
In late February, the French government proposed to substantially raise feed-in tariffs for biogas, while dropping tariffs for solar photovoltaics (PV) by an equivalent amount.
Nathalie Kosciusko-Morizet, France's Minister for Ecology, Sustainability, and Transport, made the announcement in a release dated February 24, 2011.
The proposal raises biogas tariffs 20% to be more inline with those in neighboring Germany, by including incentive payments for the use of wastes from livestock operations. The Ministry's proposal also includes a new tariff for biogas injected into the natural gas distribution system.
More controversial are the Ministry's revision of solar PV tariffs and a new target for the French solar industry of 500 MW per year. The Ministry is proposing cuts of 20% across the board and new regulations to rein in the growth of solar in France.
The new policy will go into effect after formal publication on March 9th, following a consultation with the Council for Energy.
2010 French Solar Rivals USA
The Ministry also reports the installation of 720 MW of solar PV in continental France (France Metropolitaine) and its overseas territories in 2010, bringing total installed capacity to more than 1,000 MW for the first time.
There are now 152,000 solar PV installations in France and its territories.
French 2010 installations were more than double those of 2009 and rival the approximately 800 MW of solar PV installed in the USA during the same period.
France now has the seventh-largest installed solar PV capacity in the world, after Germany, Spain, Japan, Italy, the USA, and the Czech Republic.
The Ministry expects from 1,000 MW to 1,500 MW of new solar PV will be installed in 2011 and 2012. If development proceeds as expected, France's total installed capacity will rival that of the USA. France has one-fifth the population of the USA.
Though the government didn't release the number of central-station, ground-mounted projects, the vast majority of French solar installations are in distributed applications. There were 13,000 projects greater than 3 kW, representing 70% of total capacity installed in 2010. Only 92 projects installed in 2010 were greater than 250 kW, for a total of 128 MW.
Several ground-mounted projects in the pipeline will be installed in the next several months, and some of the projects that were under development before the government's moratorium will proceed under the previous policy.
Wind Nears 2% of Supply
French installations of new wind-generating capacity in 2010 remained steady at 1,100 MW, bringing total installed wind capacity in France to 5,700 MW.
In 2010, French wind turbines generated 9.4 TWh or 1.8% of supply, up from 1.5% in 2009. The current fleet is capable of generating more than 11 TWh in 2011. This will push French wind penetration above 2% for the first time.
There are 3,700 MW of wind capacity and 4,100 MW of solar PV capacity in the transmission queue waiting for connection.
New PV Target, New Tariffs, New Regulations
Ostensibly as a means to limit costs to ratepayers, the Ministry has set a new target, 500 MW per year, for the installation of solar PV, and adopted the regulations to limit growth to that desired.
For comparison, Germany, one of France's main trading partners, has recently reaffirmed its target of 3,500 MW per year.
The French Ministry's proposal cuts solar PV tariffs 20% and will severely limit new applications for any rooftop project greater than 100 kW and all ground-mounted projects.
To restrict the type and number of installations, all rooftop projects greater than 100 kW but less than 250 kW will have to respond to a "simplified" Request for Proposal (RFP) or "call for tender" as it is known in Europe. Winners of the RFP will be chosen on several non-price factors and will receive the fixed tariffs.
However, all rooftop projects greater than 250 kW, and ground-mounted projects of any size will have to respond to a more conventional RFP. Winners will be based on price, environmental impact, innovation, and other factors. Thus, solar PV projects greater than 250 kW will be effectively removed from the French feed-in tariff program.
The use RFPs reflect the famed French penchant for centralized control and administration, preferred by French governments since Louis XIV (the "Sun King") concentrated power in the hands of the Versailles nobility.
The new proposal gives the Ministry all decision-making authority regarding who will and will not install solar PV greater than 250 kW. Critics suggest that this is not only a way to rein in the rapid growth of solar but also a recipe for favoring preferred contractors.
As recently as early 2010, the Ministry raised tariffs for solar PV, as well as for geothermal, and biomass. At the time, solar advocates warned the French government--to no avail--that they were in danger of overheating the French solar PV market at the expense of the entire renewable energy program. See 2010 French Tariffs Raise Price for Solar, Geothermal, and Biomass.
Overcost Due to Fossil Fuels, Not Renewables
With the rapid growth of solar PV in France have come charges that renewables have created a huge debt in un-funded utility charges.
France collects a public goods charge, the Contribution au Service Public de l'Électricité (CSPE), from electricity consumers in order to pay for renewable energy, fossil-fired combined heat and power, and for the bills of consumers who can't pay them themselves.
In an unusual twist on the concept of public goods charge, the CSPE also pays the overcost that can't be recovered in rates of generating electricity from fossil fuels in French overseas territories. Consumers in French overseas territories pay the same electricity rates as Parisians, even though the cost of generating electricity is far higher than in continental France.
Electricité de France (EDF), the partially privatized utility serving France and its territories, has for several years not been collecting sufficient funds to cover the cost of the CSPE.
From 2007 through 2010, EDF had run up a debt of 2.8 billion euros. The cost of renewables represents only 10%-15% of the total unfunded debt. The cost of fossil fuels accounted for 70% to nearly 90% of the debt, says the Comité de Liaison Energie Renouvelables (CLER). This is the same time period when oil prices reached their zenith, before crashing along with the global economy.
The situation with the CSPE in France is not dissimilar to that in Spain, where the overcosts of fossil-fuel fired generation during the run-up in oil prices in 2007 and 2008 were attributed to the costs of renewable energy.
Critics note that despite wind energy's steady growth of 1,000 MW per year, it is insufficient to meet France's renewable energy targets. The new limits on solar PV, one-seventh the annual target of Germany, will only exacerbate the problem.
Nevertheless, the French government's action illustrates the flexibility of feed-in tariffs as a policy tool by raising the tariffs for the technologies they want, while lowering those of the technologies they fear.
Nathalie Kosciusko-Morizet, France's Minister for Ecology, Sustainability, and Transport, made the announcement in a release dated February 24, 2011.
The proposal raises biogas tariffs 20% to be more inline with those in neighboring Germany, by including incentive payments for the use of wastes from livestock operations. The Ministry's proposal also includes a new tariff for biogas injected into the natural gas distribution system.
More controversial are the Ministry's revision of solar PV tariffs and a new target for the French solar industry of 500 MW per year. The Ministry is proposing cuts of 20% across the board and new regulations to rein in the growth of solar in France.
The new policy will go into effect after formal publication on March 9th, following a consultation with the Council for Energy.
2010 French Solar Rivals USA
The Ministry also reports the installation of 720 MW of solar PV in continental France (France Metropolitaine) and its overseas territories in 2010, bringing total installed capacity to more than 1,000 MW for the first time.
There are now 152,000 solar PV installations in France and its territories.
French 2010 installations were more than double those of 2009 and rival the approximately 800 MW of solar PV installed in the USA during the same period.
France now has the seventh-largest installed solar PV capacity in the world, after Germany, Spain, Japan, Italy, the USA, and the Czech Republic.
The Ministry expects from 1,000 MW to 1,500 MW of new solar PV will be installed in 2011 and 2012. If development proceeds as expected, France's total installed capacity will rival that of the USA. France has one-fifth the population of the USA.
Though the government didn't release the number of central-station, ground-mounted projects, the vast majority of French solar installations are in distributed applications. There were 13,000 projects greater than 3 kW, representing 70% of total capacity installed in 2010. Only 92 projects installed in 2010 were greater than 250 kW, for a total of 128 MW.
Several ground-mounted projects in the pipeline will be installed in the next several months, and some of the projects that were under development before the government's moratorium will proceed under the previous policy.
Wind Nears 2% of Supply
French installations of new wind-generating capacity in 2010 remained steady at 1,100 MW, bringing total installed wind capacity in France to 5,700 MW.
In 2010, French wind turbines generated 9.4 TWh or 1.8% of supply, up from 1.5% in 2009. The current fleet is capable of generating more than 11 TWh in 2011. This will push French wind penetration above 2% for the first time.
There are 3,700 MW of wind capacity and 4,100 MW of solar PV capacity in the transmission queue waiting for connection.
New PV Target, New Tariffs, New Regulations
Ostensibly as a means to limit costs to ratepayers, the Ministry has set a new target, 500 MW per year, for the installation of solar PV, and adopted the regulations to limit growth to that desired.
For comparison, Germany, one of France's main trading partners, has recently reaffirmed its target of 3,500 MW per year.
The French Ministry's proposal cuts solar PV tariffs 20% and will severely limit new applications for any rooftop project greater than 100 kW and all ground-mounted projects.
To restrict the type and number of installations, all rooftop projects greater than 100 kW but less than 250 kW will have to respond to a "simplified" Request for Proposal (RFP) or "call for tender" as it is known in Europe. Winners of the RFP will be chosen on several non-price factors and will receive the fixed tariffs.
However, all rooftop projects greater than 250 kW, and ground-mounted projects of any size will have to respond to a more conventional RFP. Winners will be based on price, environmental impact, innovation, and other factors. Thus, solar PV projects greater than 250 kW will be effectively removed from the French feed-in tariff program.
The use RFPs reflect the famed French penchant for centralized control and administration, preferred by French governments since Louis XIV (the "Sun King") concentrated power in the hands of the Versailles nobility.
The new proposal gives the Ministry all decision-making authority regarding who will and will not install solar PV greater than 250 kW. Critics suggest that this is not only a way to rein in the rapid growth of solar but also a recipe for favoring preferred contractors.
As recently as early 2010, the Ministry raised tariffs for solar PV, as well as for geothermal, and biomass. At the time, solar advocates warned the French government--to no avail--that they were in danger of overheating the French solar PV market at the expense of the entire renewable energy program. See 2010 French Tariffs Raise Price for Solar, Geothermal, and Biomass.
Overcost Due to Fossil Fuels, Not Renewables
With the rapid growth of solar PV in France have come charges that renewables have created a huge debt in un-funded utility charges.
France collects a public goods charge, the Contribution au Service Public de l'Électricité (CSPE), from electricity consumers in order to pay for renewable energy, fossil-fired combined heat and power, and for the bills of consumers who can't pay them themselves.
In an unusual twist on the concept of public goods charge, the CSPE also pays the overcost that can't be recovered in rates of generating electricity from fossil fuels in French overseas territories. Consumers in French overseas territories pay the same electricity rates as Parisians, even though the cost of generating electricity is far higher than in continental France.
Electricité de France (EDF), the partially privatized utility serving France and its territories, has for several years not been collecting sufficient funds to cover the cost of the CSPE.
From 2007 through 2010, EDF had run up a debt of 2.8 billion euros. The cost of renewables represents only 10%-15% of the total unfunded debt. The cost of fossil fuels accounted for 70% to nearly 90% of the debt, says the Comité de Liaison Energie Renouvelables (CLER). This is the same time period when oil prices reached their zenith, before crashing along with the global economy.
The situation with the CSPE in France is not dissimilar to that in Spain, where the overcosts of fossil-fuel fired generation during the run-up in oil prices in 2007 and 2008 were attributed to the costs of renewable energy.
Critics note that despite wind energy's steady growth of 1,000 MW per year, it is insufficient to meet France's renewable energy targets. The new limits on solar PV, one-seventh the annual target of Germany, will only exacerbate the problem.
Nevertheless, the French government's action illustrates the flexibility of feed-in tariffs as a policy tool by raising the tariffs for the technologies they want, while lowering those of the technologies they fear.
This feed-in tariff news update is partially supported by An Environmental Trust and David Blittersdorf in cooperation with the Institute for Local Self-Reliance. The views expressed are those of Paul Gipe and are not necessarily those of the sponsors.
Views: This action by France follows recent actions taken in Spain, Germany and in Italy (although these have not been finalized and are being hotly contested - as only the Italians can do). However, slipping under the radar is the continuance of high Feed in Tariff rates for biogas and cogeneration systems (such as our company offers - see above information) which produce electricity and steam 24/7. Using our fuel reduction technology - we are still able to achieve very high rates of returns for our investors - making these a great complement to solar only systems.
Monday, March 7, 2011
Italy Announces Feed-In Tariff Reductions, But No Solar Market Cap
Representatives from Italy's Ministry for the Environment and the Ministry for Economic Development have reached an agreement with Gruppo Imprese Fotovoltaiche Italiane (GIFI), the country's PV industry association, to adjust solar feed-in tariff (FIT) rates under its energy law.
FIT reductions will be put in place beginning in June, according to a report from EuPD Research. However, a comprehensive market cap, which had previously been demanded by the ministries, is now off the table.
"Making adjustments to funding is the right step," says Markus A.W. Hoehner, CEO of EuPD Research. "Prices in the small rooftop system segment in Italy are, on average, 4,300 euros and peak at 6,000 euros. These prices are much higher than those in other European countries such as Germany, Spain or France."
EuPD Research notes that in addition to the 3.7 GW of PV capacity already connected to the grid in Italy, 3.8 GW currently awaits interconnection, according to data from electricity provider GSE.
The scope of the FIT reductions has not yet been determined. Additional talks are expected to take place next month.
SOURCE: EuPD Research
FIT reductions will be put in place beginning in June, according to a report from EuPD Research. However, a comprehensive market cap, which had previously been demanded by the ministries, is now off the table.
"Making adjustments to funding is the right step," says Markus A.W. Hoehner, CEO of EuPD Research. "Prices in the small rooftop system segment in Italy are, on average, 4,300 euros and peak at 6,000 euros. These prices are much higher than those in other European countries such as Germany, Spain or France."
EuPD Research notes that in addition to the 3.7 GW of PV capacity already connected to the grid in Italy, 3.8 GW currently awaits interconnection, according to data from electricity provider GSE.
The scope of the FIT reductions has not yet been determined. Additional talks are expected to take place next month.
SOURCE: EuPD Research
Battle Brewing in Italy Over FIT Cuts
Future changes to solar feed-in-tariff (FIT) rates, as announced by Italy's government, are "markedly unconstitutional," according to a coalition of industry groups, including APER, Assosolare, Asso Energie Future and Gifi.
The groups have launched a joint appeal asking the country's president, Giorgio Napolitano, to not sign the decree, claiming that it "does not comply with the parliamentary mandate empowering the government to introduce legislation incorporating the terms of the European directive to foster the use of [renewable energy.]"
"Moreover, it is an arbitrary act taken by the government without the agreement of the regions, which expressed their views on a text substantially different from the one then approved by the cabinet," adds Pietro Pacchione, chief executive of APER. "Parliamentary prerogatives have also been violated, and in particular, the terms of the mandate conferred on the government."
"The decree as now approved will have very serious negative effects at once," notes Valerio Natalizia, chairman of Gifi. "Over 100,000 workers directly employed in the sector will be laid off immediately and placed on the special redundancy fund."
SOURCE: APER
The groups have launched a joint appeal asking the country's president, Giorgio Napolitano, to not sign the decree, claiming that it "does not comply with the parliamentary mandate empowering the government to introduce legislation incorporating the terms of the European directive to foster the use of [renewable energy.]"
"Moreover, it is an arbitrary act taken by the government without the agreement of the regions, which expressed their views on a text substantially different from the one then approved by the cabinet," adds Pietro Pacchione, chief executive of APER. "Parliamentary prerogatives have also been violated, and in particular, the terms of the mandate conferred on the government."
"The decree as now approved will have very serious negative effects at once," notes Valerio Natalizia, chairman of Gifi. "Over 100,000 workers directly employed in the sector will be laid off immediately and placed on the special redundancy fund."
SOURCE: APER
Thursday, March 3, 2011
No Change to FIT Expected in Italy
Concerns over possible revisions to the Italian PV feed-in tariff being aggressively adjusted downwards and even the imposition of a installation cap (following the recent reductions in Germany) are looking less likely, according to a research note from Barclays Captial analyst, Vishal Shah. Political posturing in recent days, indicates that Italian Government ministers are not supporting any FiT system that would include a cap.
It was suggested that an 8GW cap could be introduced after the massive increase in installations and requests for connection had been received by the GSE body. Trade groups had suggested a cap being introduced, targeted at 12GW.
However, according to Shah;
The Minister of Environment made a statement yesterday on the need for a gradual decrease of the incentive burden as opposed to a complete freeze of incentives. Even today, at Enel's carbon sequestration opening ceremony, the Environment Minister made a statement to the press that as far as she was concerned, there will be NO cap of 8GW, and that the language of the draft decree was still under discussion/negotiation.
A final draft of the expected FiT changes was said to be written tonight and will go to the council of ministers for a discussion tomorrow.
It was suggested that an 8GW cap could be introduced after the massive increase in installations and requests for connection had been received by the GSE body. Trade groups had suggested a cap being introduced, targeted at 12GW.
However, according to Shah;
The Minister of Environment made a statement yesterday on the need for a gradual decrease of the incentive burden as opposed to a complete freeze of incentives. Even today, at Enel's carbon sequestration opening ceremony, the Environment Minister made a statement to the press that as far as she was concerned, there will be NO cap of 8GW, and that the language of the draft decree was still under discussion/negotiation.
A final draft of the expected FiT changes was said to be written tonight and will go to the council of ministers for a discussion tomorrow.
P.S. The other day some Italcogim (French Energy Company) salespeople knocked on our door in Genova. Turns out Italy only produces about 15 to 20% of its own electrical energy - buying what it needs from France and Switzerland ... and the gas it needs from Russia, Algeria, Libya, etc. They were offering us the opportunity to buy direct from them -- at a nice discount. The point is that Italy needs to produce it's own energy - therefore they are promoting solar energy with the FIT.
Friday, December 31, 2010
Coming soon: California's version of a solar feed-in tariff
California homeowners with solar panels have had an unusual arrangement: They’ve been able to use their utility as a kind of power storage bank through-out the year — but they’ve been forced to give the utility any extra power beyond what they use at home, free of charge.
This will change in early 2011…
Currently, when a California home solar installation produces more power than the home uses that month, this excess power can be “banked” for use in a subsequent month (applied against the bill for power bought from the utility). But every 12 months these power storage accounts must be reconciled — at which time the homeowner then either pays for a shortfall, or surrenders any remaining excess for free to the utility.
But in 2011, the state’s investor-owned utilities (Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric) will have to start paying homeowners for this extra generation capacity at a rate to be determined by the California Public Utilities Commission as early as January 2011.
The extra power production is recorded via net metering, one of the capabilities of smart meters. The “net surplus compensation” is required as part of AB 920 (the California Solar Surplus Bill), which was signed into law by Gov. Arnold Schwarzenegger and which took effect at the start of 2010.
Less than 10% of the state’s solar photovoltaic system owners are likely to be affected by this law. And in most cases, their compensation will be small.
However, the response of homeowners may be vocal. This is because most will follow their intuition, believing that they are entitled to be paid for excess generation at a rate equal to the retail price that they pay for the utility to provide electricity to them — not the wholesale price that utilities pay to conventional suppliers.
The wholesale rate for power runs about 5 cents per kWh, while the retail rate is more like 25 cents. This difference results from all of the other things included in electricity rates — including transmission, distribution, customer service, energy efficiency, and other programs.
Under the draft decision before the CPUC, the compensation for net surplus generation would be calculated by a formula that reflects short-term wholesale electricity prices. Because these prices vary hourly, the plan calls for averaging out 12 months of fluctuations. In 2009, the average price for was 5 cents per kWh for energy purchased between 7am and 5pm (typical hours for solar energy production).
The draft decision also calls for adding a payment to the wholesale electricity price that reflects the cleaner-energy attributes of solar or other renewable generation. This amount is to be based on the average market price of renewable energy credits. These are not yet traded on a public market in California, but could be about 1-3 cents per kWh.
The CPUC’s hands are somewhat tied as it addresses this pricing issue. California law requires that net generators receive “just and reasonable” compensation; but also that this cannot affect other ratepayers. But here, other ratepayers are benefitting only through avoided purchases from the wholesale market — hence the use of wholesale prices to set these rates.
A further wrinkle is the Federal Energy Regulatory Commission policy which equates excess residential generation with wholesale power. (FERC regulates the wholesale power market.) Such power can be compensated only at the avoided wholesale cost, with reasonable adjustments. Thus, the CPUC may factor in the cleaner-energy attributes of renewably generated electricity.
Of course, the higher the rate paid to homeowners who generate excess power, the more it will promote residential solar panel installations. Look for the CPUC’s final ruling in the next few weeks.
Source: eMeter Smart Grid Watch
Related Articles: Click here to learn more about Feed in Tariffs
Tuesday, October 26, 2010
UK government decides against solar feed-in tariff cuts
The UK's Chancellor of the Exchequer, George Osborne, announced the coalition government's Comprehensive Spending review, revealing that there will be no immediate cuts to the country's solar feed-in tariff.
After much speculation that the coalition government would slash the feed-in tariff set by the country's Department of Energy and Climate Change, it was finally announced by the Chancellor that:
"The efficiency of feed-in tariffs will be improved at the next formal review, rebalancing them in favour of more cost-effective carbon abatement technologies. This will save £40 million in 2014-15. Support for lower value innovation and technology projects will also be reduced, saving £70 million a year on average over the Spending Review period."
Therefore feed-in tariffs will be refocused on the most cost-effective technologies in 2014-15. The changes will be implemented at the first scheduled review of tariffs unless higher-than-expected deployment requires an early review.
The Renewable Energy Association's (REA) PV specialist consultant, Ray Noble, said of the review, "This is excellent news for the UK solar industry. It's exactly what the market needs in order to fulfill its fantastic potential. The outcome of today's review could not have been better."
Source: Solar Power Portal
Wednesday, August 25, 2010
France to Cut Solar FIT by 12%
France has decided to cut the feed-in-tariff paid for solar-power generated electricity by 12%, according the French newspaper Le Figaro, as passed on by Bloomberg. The wire service later noted that the 12% cut applies to panels other than those installed on individual houses, and will be effective September 1.
Source: SolarPlaza
Source: SolarPlaza
Saturday, July 24, 2010
New UK FIT Spurring PV Market Growth
Cornwall, the region in the far southwestern corner of England that is associated for many with images of cream teas, fishing boats and childhood seaside holidays, now appears set to lead the UK into new territory: solar farming. According to Ray Noble of the Renewable Energy Association, more than 40 planning applications are about to be submitted for ground-mounted PV systems up to 5 MW in size in this county alone. And the new feed-in tariff – introduced in April this year – will ensure that they generate not only power, but a steady stream of income.
And it’s not just in Cornwall that potential sites are being investigated, but right across southern England, much of which enjoys insolation levels at least as good as those in northern Germany.
With the UK’s new feed-in tariff (FIT) carefully designed to provide gentle, long-term (25 years) support largely to rooftop PV, it is perhaps curious that the opportunity to develop solar farms might be being seized on so readily. As one industry expert said recently: “This interest in large systems is not what the government intended!” Meanwhile of course, the changes in Germany’s feed-in rates make new ground-mounted solar power plants there much less attractive – and perhaps mean there will be a lot of expertise, and investors, looking for new pastures. Those pastures could be in the UK.
At Solarplaza’s “UK PV Conference,” which took place in London in late June, more than half of the participants were potential investors, developers or manufacturers looking to enter – or at any rate explore – the UK market. The message they received from the UK solar veterans was that there is plenty of room; the market has so much scope for growth that, as one speaker put it, “we need all the help we can get” in achieving it.
The FIT in the UK was primarily introduced to stimulate microgeneration and is capped at 5 MW (wind power of 5 MW and above, for instance, is still stimulated by a quota system, the Renewable Obligation). The FIT for PV is designed so that – where power is produced and used on-site – there are three benefits. First, the consumer saves money on the electric power they would have purchased. Second, they receive the generation tariff, paid whether the power is used on-site or exported to the grid. Third, they receive an export bonus set at 3 pence [US $0.0X] per kWh (with an opt-out clause in case system owners wish to negotiate a better rate with a power company). The rooftop rates are higher than those for ground-mounted systems, ranging from 41.3 pence per kWh [US $ 0.62 or 49.8 eurocents] for retrofit systems of 4 kWp or less, down to 29.3 pence per kWh [US $0.44 or 35.3 eurocents] for rooftop systems between 100 kWp and 5 MWp, whether retrofitted or on new build (this is also the rate for ground-mounted systems).
The FIT was designed to provide return on investment in the 5-8% range, which is generally expected to give payback periods of about 12 years. According to Jeremy Leggett, the FIT was not supposed to offer sufficient incentive for utilities and developers to become seriously involved. While the UK has a commitment to produce 15% of its total energy (not just electricity) from renewable sources by 2020, the target is for 700,000 households to have some kind of electricity producing microgeneration installed by 2020, expected mostly to be solar. Policymakers expect all the FIT-eligible technologies combined to supply no more than 2% of UK electricity by 2020 – but this is neither a target nor a cap, and the government has indicated they would welcome a higher proportion. (By way of calculation, installation of 700,000 3 kWp systems would be total rooftop capacity of 2100 MWp by 2020 – and the most recent UK building code for zero carbon homes requires all houses to generate 10-20% of their electricity on site.)
Yet industry experts think PV penetration levels could grow further, faster, than government targets. The European Photovoltaic Industry Association (EPIA) estimated the market will grow to 20–40 MW in 2010, and 80–100 MW in 2011. Noble – who runs the Renewable Energy Association’s ‘Solar Power’ organization -- thinks that by 2012 the market will be in the range of 200–750 MWp. And if that pace continued at a steady rate, by 2020 the market would reach more than 4000 MWp or 4 GW.
Money is No Object
With interest rates low and investor’s favourable outlook for solar, it’s likely that UK solar could prove highly attractive to pension fund investors and others looking for a long term, assured income – even if banks are still shy of financing. Several of the conference speakers agreed that finding investors for solar in the UK would not be a problem – as Solar Century’s Jeremy Leggett put it, there are “investors crawling out of Eurostar” (the high-speed train that connects Great Britain with continental Europe).
Leggett has calculated that – in certain circumstances – return on investment (ROI) on large ground-mounted systems could be over 16%. In fact, the Guardian recently reported that the proposed 2 MW facility at Cornwall’s Benbole Farm – which would be the first utility-scale solar farm in the UK – could have a yearly turnover of £700,000 [US $ 1 million] within seven years. According to the business plan, by year 25 of its operation the farm will have generated a total revenue of £13 million [US $19.6 million].
In order to mobilize much of the potential investment, however, appropriate financial vehicles will be needed that enable institutional investors to invest on a sufficiently large scale, such as in multiple commercial rooftop packages and schemes.
While the financial community is apparently waiting to pour cash into UK solar, there are the usual, and some unusual, hurdles to cross.
Transmission, Permitting and Certification Causing Delays
As always, there are issues of transmission and distribution. The distribution network operators (DNOs) “need to be brought on side,“ said Noble – but mostly it’s a matter of overcoming their lack of familiarity with the PV generation and inverter technologies. In his experience objections are usually quickly overcome with the right information.
In addition to transmission hurdles, there are permitting and planning challenges. In line with new planning legislation introduced by the previous (Labour) government, planning permission is no longer required for the siting of PV on rooftops (other than on so-called listed buildings – those of special historic or architectural interest). Noble says the planning situation for solar farms can be straightforward too – especially if a flat site is chosen, not overlooked from nearby hills, and preferably a brownfield site (i.e land that has previously been used for non-agricultural purposes).
And one tricky issue, which everyone agrees needs rapid streamlining, is the process for certification of products to receive the FIT in the UK market. The Microgeneration Certification Scheme (MCS) was designed to ensure that only high quality products enter the UK market, and only certified installers can operate, in order to protect the reputation of PV (and other renewable/microgeneration technologies). However, the MCS – essential for PV installations of up to 50 kWp, which will otherwise not qualify to receive the FIT – is causing headaches for various reasons. One is the sheer number of certifying bodies (and the wide-ranging fees and speeds at which they reportedly act). Another is the backlog created because so many manufacturers had not yet applied to have their products licensed for the UK market and are now seeking to do so. A further issue is whether the UK certification process is in fact contravening European legislation by acting as a market barrier, and whether products certified in other European member states should automatically be approved in the UK. Bodies such as the National Energy Foundation agree that clarification is needed, and say it is on its way.
Leggett warns against complacency, saying lobbying efforts must be continued to ensure that once the FIT has “bedded down,” current policymakers (a new government has come into power since the introduction of the FIT) continue to support it. Meanwhile, it seems the UK is finally serious about PV, and the PV industry is serious about the UK.
Source: Renewable Energy World
And it’s not just in Cornwall that potential sites are being investigated, but right across southern England, much of which enjoys insolation levels at least as good as those in northern Germany.
With the UK’s new feed-in tariff (FIT) carefully designed to provide gentle, long-term (25 years) support largely to rooftop PV, it is perhaps curious that the opportunity to develop solar farms might be being seized on so readily. As one industry expert said recently: “This interest in large systems is not what the government intended!” Meanwhile of course, the changes in Germany’s feed-in rates make new ground-mounted solar power plants there much less attractive – and perhaps mean there will be a lot of expertise, and investors, looking for new pastures. Those pastures could be in the UK.
At Solarplaza’s “UK PV Conference,” which took place in London in late June, more than half of the participants were potential investors, developers or manufacturers looking to enter – or at any rate explore – the UK market. The message they received from the UK solar veterans was that there is plenty of room; the market has so much scope for growth that, as one speaker put it, “we need all the help we can get” in achieving it.
The FIT in the UK was primarily introduced to stimulate microgeneration and is capped at 5 MW (wind power of 5 MW and above, for instance, is still stimulated by a quota system, the Renewable Obligation). The FIT for PV is designed so that – where power is produced and used on-site – there are three benefits. First, the consumer saves money on the electric power they would have purchased. Second, they receive the generation tariff, paid whether the power is used on-site or exported to the grid. Third, they receive an export bonus set at 3 pence [US $0.0X] per kWh (with an opt-out clause in case system owners wish to negotiate a better rate with a power company). The rooftop rates are higher than those for ground-mounted systems, ranging from 41.3 pence per kWh [US $ 0.62 or 49.8 eurocents] for retrofit systems of 4 kWp or less, down to 29.3 pence per kWh [US $0.44 or 35.3 eurocents] for rooftop systems between 100 kWp and 5 MWp, whether retrofitted or on new build (this is also the rate for ground-mounted systems).
The FIT was designed to provide return on investment in the 5-8% range, which is generally expected to give payback periods of about 12 years. According to Jeremy Leggett, the FIT was not supposed to offer sufficient incentive for utilities and developers to become seriously involved. While the UK has a commitment to produce 15% of its total energy (not just electricity) from renewable sources by 2020, the target is for 700,000 households to have some kind of electricity producing microgeneration installed by 2020, expected mostly to be solar. Policymakers expect all the FIT-eligible technologies combined to supply no more than 2% of UK electricity by 2020 – but this is neither a target nor a cap, and the government has indicated they would welcome a higher proportion. (By way of calculation, installation of 700,000 3 kWp systems would be total rooftop capacity of 2100 MWp by 2020 – and the most recent UK building code for zero carbon homes requires all houses to generate 10-20% of their electricity on site.)
Yet industry experts think PV penetration levels could grow further, faster, than government targets. The European Photovoltaic Industry Association (EPIA) estimated the market will grow to 20–40 MW in 2010, and 80–100 MW in 2011. Noble – who runs the Renewable Energy Association’s ‘Solar Power’ organization -- thinks that by 2012 the market will be in the range of 200–750 MWp. And if that pace continued at a steady rate, by 2020 the market would reach more than 4000 MWp or 4 GW.
Money is No Object
With interest rates low and investor’s favourable outlook for solar, it’s likely that UK solar could prove highly attractive to pension fund investors and others looking for a long term, assured income – even if banks are still shy of financing. Several of the conference speakers agreed that finding investors for solar in the UK would not be a problem – as Solar Century’s Jeremy Leggett put it, there are “investors crawling out of Eurostar” (the high-speed train that connects Great Britain with continental Europe).
Leggett has calculated that – in certain circumstances – return on investment (ROI) on large ground-mounted systems could be over 16%. In fact, the Guardian recently reported that the proposed 2 MW facility at Cornwall’s Benbole Farm – which would be the first utility-scale solar farm in the UK – could have a yearly turnover of £700,000 [US $ 1 million] within seven years. According to the business plan, by year 25 of its operation the farm will have generated a total revenue of £13 million [US $19.6 million].
In order to mobilize much of the potential investment, however, appropriate financial vehicles will be needed that enable institutional investors to invest on a sufficiently large scale, such as in multiple commercial rooftop packages and schemes.
While the financial community is apparently waiting to pour cash into UK solar, there are the usual, and some unusual, hurdles to cross.
Transmission, Permitting and Certification Causing Delays
As always, there are issues of transmission and distribution. The distribution network operators (DNOs) “need to be brought on side,“ said Noble – but mostly it’s a matter of overcoming their lack of familiarity with the PV generation and inverter technologies. In his experience objections are usually quickly overcome with the right information.
In addition to transmission hurdles, there are permitting and planning challenges. In line with new planning legislation introduced by the previous (Labour) government, planning permission is no longer required for the siting of PV on rooftops (other than on so-called listed buildings – those of special historic or architectural interest). Noble says the planning situation for solar farms can be straightforward too – especially if a flat site is chosen, not overlooked from nearby hills, and preferably a brownfield site (i.e land that has previously been used for non-agricultural purposes).
And one tricky issue, which everyone agrees needs rapid streamlining, is the process for certification of products to receive the FIT in the UK market. The Microgeneration Certification Scheme (MCS) was designed to ensure that only high quality products enter the UK market, and only certified installers can operate, in order to protect the reputation of PV (and other renewable/microgeneration technologies). However, the MCS – essential for PV installations of up to 50 kWp, which will otherwise not qualify to receive the FIT – is causing headaches for various reasons. One is the sheer number of certifying bodies (and the wide-ranging fees and speeds at which they reportedly act). Another is the backlog created because so many manufacturers had not yet applied to have their products licensed for the UK market and are now seeking to do so. A further issue is whether the UK certification process is in fact contravening European legislation by acting as a market barrier, and whether products certified in other European member states should automatically be approved in the UK. Bodies such as the National Energy Foundation agree that clarification is needed, and say it is on its way.
Leggett warns against complacency, saying lobbying efforts must be continued to ensure that once the FIT has “bedded down,” current policymakers (a new government has come into power since the introduction of the FIT) continue to support it. Meanwhile, it seems the UK is finally serious about PV, and the PV industry is serious about the UK.
Source: Renewable Energy World
Subscribe to:
Posts (Atom)