LONDON (Alliance News) - Inspirit Energy Holdings PLC on Friday alleviated concerns over the impact changes to the Feed-In-Tariff will have on the company as it confirmed its products will not be affected for now.
The UK government has been closing or reducing certain energy subsidies and tariffs such as the Feed-In-Tariff ever since the Conservative party won an outright majority back in May and after the government discovered it had overspent its budget.
The Feed-In-Tariffs were designed to promote the uptake of smaller-scale renewable and low-carbon electricity generation technologies and requires electricity suppliers to make set tariff payments for renewable and low-carbon electricity.
The changes mostly hit renewable energy companies, specifically solar and wind power, but there were concerns that the changes to the tariff would affect Inspirit, which is developing micro combined heat and power (microCHP) boilers which utilise the scheme.
The Department of Energy and Climate Change held a consultation on the Feed-In-Tariff, and Thursday confirmed that no changes have been made to the tariff in relation to its support for microCHP technologies "at this point".
Inspirit said it welcomed the decision, but also noted that a separate consultation will be held in early 2016 to discuss the tariffs support for micro combined heat and power technologies and anaerobic digestion, referring to the process by which waste can be converted into gas.
"The company considers this to be a positive development and an opportunity for the Department of Energy and Climate Change to tailor the tariff structure for microCHP to better reflect the stage of development of the various microCHP technologies and how government support can help to boost uptake of microCHP appliances, such as the Inspirit Charger," said the company.
For now, the generation tariff for the company's microCHP units remains at 13.45 pence per kilowatt hour generated, with the export tariff rate remaining at 4.85 pence per kilowatt hour.
To put that into context, any solar operations not up and running by January 15 next year will see their generation tariff rate fall to only 4.39 per kilowatt hour, only around a third of what is being paid for power generated from Inspirit's microCHP.
The reason the government has particularly hit wind and solar power is because they are the most widespread type of renewable energy being used in the UK and are seen as rapidly developing markets. In the government's view, this has significantly brought down the costs of the technology used, meaning the sectors require less financial support from subsidies.
Another benefit for Inspirit is the confirmation that the charger it is currently developing also will be eligible for the Feed-In-Tariff once it is at a commercial stage.
"For commercial customers it is expected that the Inspirit Charger 2.0 would act as the first boiler to fire in a typical commercial boiler array and as such could achieve annual run hours in excess of 7,000 hours per year in our target market segments. The greater the number of run hours, the higher the payments from the Feed-In-Tariff scheme would be," said the company.
Inspirit shares were up 4.2% to 0.495 pence per share early Friday afternoon.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
Inspirit Energy (INSP)