DCE newsletter August 2015

Six community PV installations have now been completed

Following the completion of community solar panel installations at Martinstown Village Hall in March, Salway Ash Village Hall in April and Osmington Village Hall in May, Dorset Community Energy has now completed the 3 larger PV installations on the roofs of Dorchester Middle School, The Thomas Hardye School, Dorchester and the roof of the Sports Hall at Lytchett Minster School near Wimborne.

The share offer in June was over-subscribed, raising £190,000 of community investment in 4 weeks, resulting in refunds for all share applications over £3,700. Following the share offer, it was important to complete the 3 school solar PV installations during the August holiday when there are no pupils on-site. The installers Chris Rudge Renewables and Dorset Energy Solutions are to be congratulated in completing the installations to a very high standard within the deadline, despite the heavy rain in the latter half of August.

The Dorset Community Energy secretary and directors were also kept busy ensuring the legal side of the solar roof rental agreements were completed and ready for signature at the time of the installations.
The final step is registration of the 3 school solar PV installations for Feed-in Tariffs (FITs) with Good Energy, which will be completed in early September.

HMRC has provided Advanced Assurance for 50% SEIS tax relief for qualifying investments

The Dorset Community Energy Share Offer has been managed by consultants Sharenergy, who have successfully applied to HMRC for Advanced Assurance that qualifying investors will be eligible for a 50% Seed Enterprise Investment Scheme (SEIS) tax rebate on their investment.

In order to qualify, eligible investors must have paid at least as much tax in the current tax year 2015–16, or in the previous tax year 2014-15, as they are reclaiming. Members must also keep their shares for a minimum for 3 years.

Members will receive a HMRC tax rebate application form SEIS3 from Sharenergy towards the end of this year. Qualifying investors can submit this form if self employed with their Self Assessment Tax Return by the end of January 2016, or at any time if employees. HMRC will adjust an employee’s tax code so their tax rebate is paid via reduced tax on their salary in 2016-17.

Sharenergy will provide further information once HMRC has issued the SEIS tax rebate application forms. In the meantime, if members have any questions about SEIS tax relief, please contact Sharenergy:

  • Tel 01743 277 119
  • E mail admin@sharenergy.coop

Additional solar PV installations in early 2016?

Due to high levels of interest the Dorset Community Energy directors have agreed in principle to launch a 2nd share offer in December or January in order to finance an additional 2–3 solar PV installations on schools and public buildings in February or March 2016.

3 sites have been pre-accredited with Ofgem, which fixes the Feed-in Tariff for 12 months at the August 2015 rate, even if the Feed-in Tariff is reduced before the installation date. The 3 pre-accredited sites are Greenford C of E Primary School, Maiden Newton, Bridport Primary School and Bridport Arts Centre (working with the Transition Town Bridport energy group). However all sites are subject to securing additional grant funding of approximately £2000 per site to cover the ‘at risk’ feasibility study costs including roof structural surveys, grid connection surveys and the cost of planning permission where required.

The 3 additional installations will also be subject to satisfactory quotes to enable community investors to receive the same projected 5%- 6% p.a. interest as in the first share offer.

Dorset Community Energy members who had oversubscription refunds from the first share offer will be given priority for the proposed 2nd share offer, together with people with a direct connection with the installation sites (school staff and parents, etc).

Consultation on reduced renewable energy Feed-in Tariffs from January 2016

The renewable energy industry has been taken aback by a recent Department of Energy and Climate Change (DECC) consultation, proposing to slash Feed- in Tariffs for all new renewable energy installations from January 2016 onwards.

For example, the consultation document proposes to reduce Feed-in Tariffs for small household solar PV installations by 87% from the current 12.47 pence per kWh of electricity generated down to 1.63p per kWh . It would take a house- holder over 20 years to simply recover the initial capital cost of a solar PV installation at the proposed low tariff rate, therefore the number of domestic solar PV installations is expected to plummet.
The same situation applies to future community renewable energy projects. The Dorset Community Energy business model for the initial 6 sites is cashflow positive each year at August 2015 Feed-in Tariff rates and estimates a surplus/ contingency fund of £73,000 in year 20.

If the existing 6 sites were to be financed at the proposed new low Feed-in Tariffs from January 2016 Dorset Community Energy would have a financial deficit of £160,000 in year 20 – obviously an impossible situation.
However it is important to realise this is not the case for the existing 6 Dorset Community Energy solar PV installations. The proposed low Feed-in Tariff rates will only apply to new installations after January 2016. The reduced Feed-in Tariffs will not be applied retrospectively to the existing installations, nor to the 3 pre- accredited installations.

The Dorset Community Energy directors will work with other community energy groups, Regen SW and Community Energy England to lobby against the proposed excessive reduction in Feed-in Tariffs.

It is difficult to understand the government’s logic and economic analysis to justify these excessive cuts. A recent analysis from DECC, ’Policy Impacts on Bills and Prices’ indicated that Feed-in Tariffs only added £9 per year to household energy bills in 2014. See https://www.gov.uk/guidance/policy-impacts-on-prices-and-bills
Of this £9, approximately £7 is due to the very high Feed-in Tariff rates in 2010 and 2011 before any cost control measures were introduced. Therefore the more recent moderated Feed-in Tariffs have only added around 50 pence per year to average household energy bills.

People may question the logic behind potentially destroying an industry with the loss of at least 25,000 jobs being justified by such a tiny saving on household energy bills. At the same time, according to Regen SW, dealing with nuclear waste is costing every household £79 per year. The government has also offered new nuclear power stations an index-linked subsidy for 40 years starting at 4.6 pence per kWh of electricity generated – almost 3 times higher than the 1.63 pence Feed-in Tariff now proposed for solar panels on domestic houses (which also only lasts for 20 years).

Regen SW has issued a press release and facts about the impact of policies on energy bills