Monthly FiT Payments

[AlexMcGowan]

Over the past few months we’ve had more and more customers enquiring about monthly feed in tariff payments as opposed to the usual quarterly.

With only a handful of suppliers offering monthly FiT payments, you inevitably reduce your options as to who you can sell your exported energy to, however monthly payments can be invaluable to some generator’s cashflow.

If you’d like to explore your options with regards to monthly vs quarterly FiT payments, specific to your generation, email me on [email protected].

 

[Exfarmer]

You can sell your Export completely independently of your FIT income.
However you can only claim the guaranteed export price from your FIT provider.
Obviously if you are angling for a monthly payment of your FITs then you must be prepared to accept a discount

 

[AlexMcGowan]

Yes you're right in usual circumstance the FiT licensee doesn't have to be the same supplier as your export PPA, as they're separate agreements, however in order to secure monthly FiT payments it does. As suppliers are offering this at cost, funding the monthly payments until they themselves receive the quarterly payments from the government, there has to be a level of risk/reward on their part.

Not many suppliers offer it so you do limit your export options, and therefore there might be slightly better offers elsewhere on quarterly FiT, however some will see the value in the monthly payments more than others, so definitely a valid option.

We recently increased a customers export PPA price by £3/MW, whilst agreeing a monthly FiT, that was above the guaranteed export price, link below;

https://www.facebook.com/OakwoodEnergy/posts/5519091951449271

 

[DC21]

I'm sure you mean £3/MWh, so 0.3p/kWh to put into the terms smaller renewable energy installation owners would relate to.

 

[AlexMcGowan]

I'm sure you mean £3/MWh, so 0.3p/kWh to put into the terms smaller renewable energy installation owners would relate to.

Apologies, yes that’s supposed to say MWh, thanks for pointing that out I’ll need to edit that post.

 

[DC21]

No problem, it's kW too, not KW, sorry that's my inner I'm an engineer talking!

 

[Chickcatcher]

I'm sure you mean £3/MWh, so 0.3p/kWh to put into the terms smaller renewable energy installation owners would relate to.

Really @DC21 people only get paid 0.3p/kWh, not 3p or 30p? When we are having to pay on average 15p/kWh for what electricity we use.

 

[Exfarmer]

Really @DC21 people only get paid 0.3p/kWh, not 3p or 30p? When we are having to pay on average 15p/kWh for what electricity we use.

The post means they are getting .3p over the average , which equate to £3 extra per megawatt hour.

A Megawatt Hour does appear very large but is actually only a thousand units.
Huge numbers of people get confused by the terminations although technically correct

 

[DC21]

No that isn't what I meant. PPAs and FiT agreement for smaller scale generators are usually expressed in p/kWh rather than £/MWh. So export is typically 5 to 7 p/kWh, depending on the market.

 

[AlexMcGowan]

Really @DC21 people only get paid 0.3p/kWh, not 3p or 30p? When we are having to pay on average 15p/kWh for what electricity we use.

The 0.3p/kWh/£3MWh refers to the amount we increased the customers earnings by compared to when they arranged the contract themselves the previous year.

For this customer that equates to approximately 5% more revenue for the energy they sell back to the grid.

 

[AlexMcGowan]

No that isn't what I meant. PPAs and FiT agreement for smaller scale generators are usually expressed in p/kWh rather than £/MWh. So export is typically 5 to 7 p/kWh, depending on the market.

It doesn’t really change based on small scale generators to large scale generators, but more supplier to supplier. I find more suppliers now work on a MWh basis than they do a kWh basis no matter the size installation personally.

 

[Chickcatcher]

Ok I get it now they were getting 5.5p and now get 5.8p/kWh for all they export, am I correct in saying they also get what say get 5p, 10p, or just over 15p/kWh like I get for my small PV system on my house.

 

[AlexMcGowan]

Ok I get it now they were getting 5.5p and now get 5.8p/kWh for all they export, am I correct in saying they also get what say get 5p, 10p, or just over 15p/kWh like I get for my small PV system on my house.

Are you referring to Feed-In-Tariff subsidies? That depends when the system was installed, however in this case yes there were Feed-In-Tariff payments involved, we negotiated for the customer to receive monthly FIT payments as opposed to the normal quarterly in this instance.

 

[Chickcatcher]

Yes the FIT is the bit, I get just over 15p/kWh. The 5p 10p bit was what I was wondering the Bio digester may get as the subsidy part? then the 5.5-5.8 was what they get for what they export. I may just be out of my depth here.

 

[AlexMcGowan]

Yes the FIT is the bit, I get just over 15p/kWh. The 5p 10p bit was what I was wondering the Bio digester may get as the subsidy part? then the 5.5-5.8 was what they get for what they export. I may just be out of my depth here.

You're along the right lines, obviously I can't be specific, as it's up to the customer whether they would want to divulge that information or not.

But don't worry you don't sound like you're out of your depth based on your estimations.

 

[surreyhillsjacob]

I have recently spoken with a couple of suppliers that are offering some pretty significant premiums for the REGO certs for larger projects.

For smaller projects, it seems that if a supplier is offering monthly FIT then they will need to charge for this as it comes out of their cashflow.

 

[AlexMcGowan]

I have recently spoken with a couple of suppliers that are offering some pretty significant premiums for the REGO certs for larger projects.

For smaller projects, it seems that if a supplier is offering monthly FIT then they will need to charge for this as it comes out of their cashflow.

With regards to the REGO certificates, I’d be interested in hearing more if you don’t mind personal messaging me? As one of the new suppliers we’re helping introduce to the market isn’t including REGO’s in their PPA as standard, simply buying the energy (at a very competitive rate) so the REGO’s are still free to be sold to whom ever we choose, if there are ‘significant premiums’ elsewhere I’d be interested to hear about it.

With regards to the monthly FIT payments coming at cost, you’re likely to be right, I’m sure suppliers do build in a slight margin for the cashflow risk, however what I will say is from our experience is that if they do it’s marginal. Obviously some installations are much larger than others, and some have much larger FIT banding, so each supplier has their sweet spot, and different suppliers cashflows are effected at different thresholds, so that margin may change on a case by case basis. All we can do is tailor the tender as much as possible to the generator, if monthly FIT payments would be beneficial, then we can complete a tender that includes those options, compared against the usual quarterly FIT to clearly display how much the monthly FIT ‘costs’, and then the customer makes the decision as always, deciding what best suits them.

 

[Bob]

I have recently spoken with a couple of suppliers that are offering some pretty significant premiums for the REGO certs for larger projects.

For smaller projects, it seems that if a supplier is offering monthly FIT then they will need to charge for this as it comes out of their cashflow.

I get £0.30 a Rego if I sell them to my PPA provider. Can you get more than 30 pence for them?

 

[surreyhillsjacob]

I have seen REGO pricing ranging from £0.10-£1.00.... depending counterparty and technology. Obviously it is all down to the bottom line and all in overall price (power, EBs and REGO)

 

[Owslebury CHP]

Just got 70p via New Stream Renewables for my 500kW wind. Not too bad....