MSE News: Solar subsidies to be slashed under government plans

zeupater

Orchardcat wrote: »

This sudden u-turn leaves me wondering just how far we can trust anything the politicians say. What is to stop this, or any future government lowering or even withdrawing these 'guaranteed' feed-in tariffs within the next 25 years?

If a week is a long time in politics, 25 years is light years away and anything could happen!

I have some sympathy with the argument about the fuel-poor subsidising the so-called rich, but the ONLY way to get cheaper energy in the long run is going to be to use renewable resources, so some kind of scheme which encourages this is vital. Problem is that governments just don't think long term if they can help it.

Hi

Welcome to the forum ....

In the short to medium term retrospective withdrawal is probably unlikely because the government (all parties) need to maintain confidence in their policies on carbon reductions.

Retrospective changes to the existing FiT system would simply destroy all chances of initiatives such as the RHI (http://www.decc.gov.uk/en/content/cms/meeting_energy/renewable_ener/incentive/incentive.aspx) or the Green Deal (http://www.decc.gov.uk/en/content/cms/tackling/green_deal/green_deal.aspx) being taken seriously and renewables/efficiency capital spending, particularly on microgeneration, would grind to a halt, therefore it's my opinion that it would be seen as being counterproductive for the timebeing ....

Z

alexlyne

plumber2009 wrote: »

As with any new technology costs will fall over time. The average cost has fallen from 20k to around 12k as it currently stands and in a few years that would probibly half to around 6k provided demand increases and costs come down.

My opinion is that if something is subsidised, then the cost of the equipment falls very slowly - if at all. Why should it? Consumers spend their 12K knowing it will pay back in 10 years then be profit all the way for the other 15 years, so why shouldn't the manufacturers cash in now?

Now that the subsidy will be halved, the cost of the equipment will (eventually) fall at a steeper rate to attract people who aren't willing to have an 18 year payback on their investment. So if I invested in a couple of years time, I probably won't be better off than those doing it now, but my initial outlay should be lower.

I hope.

Anyway, I'm with those who reckon that it's only the people that have the money that are able to benefit, and they are the ones that can afford to heat their homes. As always, the rich just get richer... and the poor, well... I assume it's the government's plan to get a few more people in the grave a bit sooner to ease resources.

orrery

alexlyne wrote: »

My opinion is that if something is subsidised, then the cost of the equipment falls very slowly - if at all. Why should it? ...

Which is the opposite of what the subsidy has been trying to achieve - that is to prime the pumps and get an industry under-way, increase competition and volumes and therefore reduce prices.

Anyway, I'm with those who reckon that it's only the people that have the money that are able to benefit...

Of course, who else will be able to invest money to install generating capacity? Investment is a perfectly respectable activity and only works because people get a higher return than comparable risk-free savings.

Equaliser123

zeupater wrote: »

Hi

Welcome to the forum ....

In the short to medium term retrospective withdrawal is probably unlikely because the government (all parties) need to maintain confidence in their policies on carbon reductions.

Retrospective changes to the existing FiT system would simply destroy all chances of initiatives such as the RHI (http://www.decc.gov.uk/en/content/cms/meeting_energy/renewable_ener/incentive/incentive.aspx) or the Green Deal (http://www.decc.gov.uk/en/content/cms/tackling/green_deal/green_deal.aspx) being taken seriously and renewables/efficiency capital spending, particularly on microgeneration, would grind to a halt, therefore it's my opinion that it would be seen as being counterproductive for the timebeing ....

Z

I agree.

I don't see existing systems having their FITs reduced. Any legislation trying to operate retrospectively would lead to a legal challenge - potentially at EU level. The principle of 'legitimate expectation' would apply to those who have incurred expense based upon the '25 year guarantees' being offered and would lead the government open to a damages claim.

Besides, whilst the uptake of solar PV has been impressive, it is not an absolutely enormous expense at the moment.

HalloweenJack

the government said its for new systems after december 12th and not systems allready in place.

Brummie71

alexlyne wrote: »

My opinion is that if something is subsidised, then the cost of the equipment falls very slowly - if at all. Why should it? Consumers spend their 12K knowing it will pay back in 10 years then be profit all the way for the other 15 years, so why shouldn't the manufacturers cash in now?

Now that the subsidy will be halved, the cost of the equipment will (eventually) fall at a steeper rate to attract people who aren't willing to have an 18 year payback on their investment. So if I invested in a couple of years time, I probably won't be better off than those doing it now, but my initial outlay should be lower.

The cost has fallen dramatically - by about 25-30% over the course of eighteen months. The fact is that the industry has expanded at a rate of knots and because technical arguments over the quality of panels are best left to the geeks, it is price driven to a huge extent. The costs have also been driven down as technology improves and quantity itself brings discounts. This cut will slow the price fall as the volume will decrease. It still makes sense for homeowners, but payback will be a longer term option - nearer 20 years than 10.

Brummie71

The government has been quite clear - there will be no reduction in payments to existing systems. While you can't predict what a future government would do, remember that the FIT isn't paid for by government - it is paid through energy bills by consumers.

Brummie71

tomny wrote: »

The final date for getting all your paperwork in to your electricity supplier appears to be the 11 December (not the 12th as that's too late).

However the 11 December is a Sunday. Does this mean that in effect the last date for getting your paperwork to your supplier after having panels fitted is Friday the 9th December?

I'm having my panels fitted on the 5th so would have very little time to get stuff in.

Why such a short cut-off? There must be quite a few folk in my position. We've already paid our deposits up-front and are after the 7 day cooling off period!

If we have a period of bad weather then some people are not going to get their installations on time.

Surely a better way would be pick a date from when you sign up for an installation? Is this change being badly managed? I can see total chaos in the next few weeks for installers and the industry.

Oh well, life goes on.

It will be chaos, no doubt about it, but then any tariff transition brings that.

Your FIT supplier has to have all documentation to go with your application - including the MCS certificate, which can take up to 10 days to arrive after installation commissioned by your installer. You should be OK on the 5th, but it is cutting it fine. Have all the paperwork ready to send, pop in the MCS cert and send it to your FIT supplier special delivery guaranteed 9am. Then hope Royal Mail don't !!!! it up. I believe the 12th is the peak Christmas posting day as well...

Remember - whatever it costs to get that documentation to your supplier in advance of the cut off date will be more than repaid in tariffs. Book a bike courier if you have to!

alexlyne

Brummie71 wrote: »

The cost has fallen dramatically - by about 25-30% over the course of eighteen months. The fact is that the industry has expanded at a rate of knots and because technical arguments over the quality of panels are best left to the geeks, it is price driven to a huge extent. The costs have also been driven down as technology improves and quantity itself brings discounts. This cut will slow the price fall as the volume will decrease. It still makes sense for homeowners, but payback will be a longer term option - nearer 20 years than 10.

OK thanks, I was under the impression (after dipping in and out of these forums for the last year) that a decent system will cost 12K, and that value hadn't changed much. Hopefully when a like for like system costs under 5K then I may be able to afford it.

zeupater

Brummie71 wrote: »

The cost has fallen dramatically - by about 25-30% over the course of eighteen months. The fact is that the industry has expanded at a rate of knots and because technical arguments over the quality of panels are best left to the geeks, it is price driven to a huge extent. The costs have also been driven down as technology improves and quantity itself brings discounts. This cut will slow the price fall as the volume will decrease. It still makes sense for homeowners, but payback will be a longer term option - nearer 20 years than 10.

Hi

The reality is that pv is a global market and global prices for panels and inverters have fallen .... this has little to do with the UK market which is almost insignificant compared to Germany, even with the massive increase in installations over the past 6 months.

The evaluation that the price fall will slow is a possible result, however it is far more likely that the existing competition in the market and the fat available within the UK supply and installation chain compared to other european markets will result in a simple margin restructuring for pv in the UK to create a new average pricing level somewhere initially around ~£2.25/Wp for larger systems, which, in terms of payback timescales for the customer, puts everything back to where it was just 18 months ago. For the installer there will be lower margins, however the market has been kick-started .... 18 months ago they had all the costs and very few installations, the market has developed to an extent that they can now cover their costs with lower margins and more installations ....



The industry need to consider that the gravy train comes along, it stops for a while, then when no longer necessary it always moves on .... when it returns the tickets will be cheaper, but there will be more carriages ...

Z