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MSE News: Solar subsidies to be slashed under government plans
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The real question is whether or not we think that home-based solar power in particular is a good thing to be subsidising...
There is an excellent book called Renewable Energy Without the Hot Air:
http://www.withouthotair.com/
which is downloadable for free.
This looks at all the technologies that we have available and the extent that people will allow it to be rolled out. It concludes that we need it all, including nuclear - so discussions about about whether off-shore wind is preferable become futile arguments.
I can stand on a hill nearby overlooking Bedford and see the truly massive expanse of roof-space and hence the potential for solar generation.
Clearly, the subsidy had got to a level where it could be seen as excessive, but the only measure of that is the actual take-up of the technology that it creates. Backing it off to a level where installs continue and prices continue to fall and getting rid of index linking (subject to a safety net) would ensure that installs continue but returns reduce after the capital cost is paid back.
Wouldn't it be good to get to a situation where we have a massive surplus of energy when the sun shines or the wind blows so we can then focus of how we store it? Technology will move to solve these problems.4kWp, Panels: 16 Hyundai HIS250MG, Inverter: SMA Sunny Boy 4000TLLocation: Bedford, Roof: South East facing, 20 degree pitch20kWh Pylontech US5000 batteries, Lux AC inverter,Skoda Enyaq iV80, TADO Central Heating control0 -
Do you happen to have figures and a source for subsidies for other forms of power generation?The real issue here is looking at solar pv in isolation ... yes, the figures are large ... yes, pv is inefficient and unschedulable ... yes, everyhousehold contributes to the subsidy .... now that that's out of the way, why not look at the whole picture.
I know that the main subsidy that nuclear can benefit from is loan guarantees to reduce the capital cost. Then it's a lot cheaper when operating long term. Natural gas and coal are presumably not subsidised but instead pay a tax for carbon releases.
Not when you look at the big picture. It's just cost-shifting because public sector gets charged to taxes and private sector items that aren't exported are charged in higher prices for goods.Regarding the £16.22 which was calculated .... is it possible that this could be diluted by including private and public sector energy purchases in the pot ?
It's a rough projection based on the new rates and assuming no change to inflation-adjusted funding for new installation subsidies beyond this one.Looking at the figures calculated based on the rate of growth ... is this a rate of growth before the proposed FiT tariff, does it factor in revision as a result of the proposal, does it also factor in future planned annual and possible extraordinary reductions in the tariff ? ...
I think that subsidies can work.It all really comes down to whether people believe that subsidies work.
I'm far from sure that it is a good idea to subsidise this particular generation method at present, though. At least not in most of the country - we can get more power per Pound of subsidy by limiting it initially to the geographically favourable locations in the South of the country.
The more northern parts can be compensated by favouring them for say wind generation so the subsidies are spread around.0 -
Do you happen to have figures and a source for subsidies for other forms of power generation?
If you mean large generation (i.e. too large to get FIT) it comes from a number of sources.
The renewables obligation (renewables only) makes up the majority of subsidy to wind (onshore, offshore), small hydro schemes, biomass, landfill gas etc. The amount you get varies from technology to technology.
URL="http://www.ofgem.gov.uk/Sustainability/Environment/RenewablObl/Pages/RenewablObl.aspx"]link[/URL
Most renewables (and some non-renewable) qualify for exemption from the climate change levy, which is effecively therefore a subsidy
URL="http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageExcise_InfoGuides&propertyType=document&id=HMCE_CL_001174"]link[/URL
The government also introduced a carbon floor price which is effectively a subsidy for any zero-carbon generator (i.e. any renewables plus nuclear). URL="http://www.hm-treasury.gov.uk/consult_carbon_price_support.htm"]link[/URL
The government's intention is to replace allof the above with new systems starting in 2014 by introducing contracts for difference. In very simple terms this will effectively be a feed-in tariff which applies to all large-scale generation (renewables and nuclear).Says James, in my opinion, there's nothing in this world
Beats a '52 Vincent and a red headed girl0 -
In addition to Magyar's links above, as you mention nuclear, here's a link to one related subsidy as per your request .... http://www.nda.gov.uk/loader.cfm?csModule=security/getfile&pageid=44914 ... you'll note that the details in appendix 5 describe an energy subsidy for not even generating energy which is costing in excess of £2billion/year .... and this is just the NDA. Again, the nuclear industry and nuclear power should not be regarded in isolation but be seen within the larger picture ....Do you happen to have figures and a source for subsidies for other forms of power generation?
I know that the main subsidy that nuclear can benefit from is loan guarantees to reduce the capital cost. Then it's a lot cheaper when operating long term. Natural gas and coal are presumably not subsidised but instead pay a tax for carbon releases.
Yes, in partial agreement, however, if the manufacturing sector in the country had been supported and encouraged properly by successive governments there would be a situation where a good proportion would also be paid by overseas customers of exported goods instead of the UK consumers, and therefore households, contributing to the similar energy related subsidies available in other countries as evidenced by the negative trade balance .....Not when you look at the big picture. It's just cost-shifting because public sector gets charged to taxes and private sector items that aren't exported are charged in higher prices for goods.
The main issue here is that the 'rough projection' seems to predict future growth as being based on growth before the subsidy reduction and, very importantly, does not factor in further planned subsidy reductions as well as further possible corrective reductions ....It's a rough projection based on the new rates and assuming no change to inflation-adjusted funding for new installation subsidies beyond this one.I think that subsidies can work.
I'm far from sure that it is a good idea to subsidise this particular generation method at present, though. At least not in most of the country - we can get more power per Pound of subsidy by limiting it initially to the geographically favourable locations in the South of the country.
The more northern parts can be compensated by favouring them for say wind generation so the subsidies are spread around.
Isn't this a little discriminatory considering that there's probably no more than a 20% reduction in annual generation potential per square meter of similarly oriented roofspace between the extreme north and the south of the country ...;). In terms of a direct comparison, the distribution and transmission losses per mile are likely far greater than the loss of potential generation per mile as an installation latitude increases ... and that's one of the major pillars supporting the reasoning behind microgeneration, keeping source close to consumption.
HTH
Z"We are what we repeatedly do, excellence then is not an act, but a habit. " ...... Aristotle
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Hi
The real issue here is looking at solar pv in isolation ... yes, the figures are large ... yes, pv is inefficient and unschedulable ... yes, everyhousehold contributes to the subsidy .... now that that's out of the way, why not look at the whole picture.
In the energy sector - a few examples .... Nuclear is subsidised, nuclear decommissioning is subsidised and subsidies are also paid to windfarms, CCS research and many other areas. Capital expenditure on nuclear, conventional, hydroelectric and all other methods of generation is amortised over the cost of each kWh sold, as are the costs of the distribution network and absolutely everything else which adds cost to the suppliers.
Regarding the £16.22 which was calculated .... is it possible that this could be diluted by including private and public sector energy purchases in the pot ?
Looking at the figures calculated based on the rate of growth ... is this a rate of growth before the proposed FiT tariff, does it factor in revision as a result of the proposal, does it also factor in future planned annual and possible extraordinary reductions in the tariff ? ...
It all really comes down to whether people believe that subsidies work. Looking at history they obviously do in many cases, so, just taking television as an example, I would have loved to see similar general discussions when transmissions started in the '30s and when colour was introduced three decades later ... both examples of situations which required massive public support per viewer (almost exclusively the wealthy too !) until the licence fee resulted in the developments moving towards becoming self financing .... as a result of this foresight are there many households, including the poorest, which still don't have a TV, or is it still exclusively restricted to the wealthy ....
Anyway, for information, here's the historical relative cost of TV
licencing from Wikipedia .... http://en.wikipedia.org/wiki/Television_licensing_in_the_United_Kingdom_(historical)) .... it's interesting to see that as the number of TV licences increased from around 14000 in 1947 to over 21000000 in 2008 the relative cost of the fee has remained constant ...... there must have been a considerable subsidy early on ...
HTH
Z
I rarely disagree with your posts or your logic; but IMO you have got this wrong and your analogy with subsidies for TV, and indeed other methods of electricity generation, are not relevant to this discussion.
HM Government(s) have chosen to allow installation of around 100,00 PV systems and pay each of them 43.3p for every KW they produce – even though some 25% to 50% of that production does not even feed into the grid. It is therefore a valid argument to say that the effective payment for each kWh produced ranges between 54p and 65p(more if you include the 3.1p/kWh export payment)
They allow these installations to be anywhere in UK, i.e. North Scotland, east west facing roofs and down to 1kWp in size. The inefficiency in erecting scaffolding, fitting panels and inverters etc, as well as any future maintenance issues, on 100,000 properties must be apparent to everyone.
Exactly the same output generated from those 100,000 systems could be achieved from a few score solar farms in Devon and Cornwall(Supermarket/factory roofs and Brownfield sites) for a small fraction of the price, as the efficiencies must be apparent to everyone.
How does the ‘Devon/Cornwall’ solution not meet any of your aims?
Why is it necessary or justified to have the huge FIT subsidies for 100,000 systems?
Your analogy for TV in the 1930’s and later with colour TV are, I suggest, specious.
As you point out, eventually the vast majority of UK household benefitted from early subsidies for TV. Not so with solar, only 100,000 will benefit from the subsidies for solar – and as the majority of installations are owned by Rent a roof companies, far fewer individuals. However all of us will have paid those subsidies.
I also cannot understand this point you make about the pioneering days of TVboth examples of situations which required massive public support per viewer (almost exclusively the wealthy too !)
With Solar PV it is not the wealthy supporting the situation, but the wealthy receiving the subsidies – which are paid for by the other 99% of the public – including the poor!0 -
I rarely disagree with your posts or your logic; but IMO you have got this wrong and your analogy with subsidies for TV, and indeed other methods of electricity generation, are not relevant to this discussion.
!
Same here!
I think it a poor argument to say that subsidies sometimes help industries along, therefore solar (and by extrapolation anything else) should be subsidised.
A test for any electricity generation proposal should be - Can it be relied upon with at least 99% certainty to generate at the period of maximum demand?.
A simple test, easily answered. If it can, then further tests can be devised to see if the idea is worth persuing, if it fails, then the technology shouldn't attract any subsidy imv. This because it means that however much generating capacity is installed by the failing technology, there will have to be an equal amount of reliable capacity installed too (I hope it's clear why that is).
It's easy to see that this industry is capital intensive (i.e. high up front costs and low running costs relative to the capital costs). Obviously, that is the worst situation when talking about capacity duplication (as we are with wind/solar). We have to pay the very large up front cost twice - and of course this cost is in the billions/tens of billions.
So my view is subsidise viable, prospective nascent developments/technologies/industries if required to kick start them, but don't try to kick start pretty pointless industries which will only, at best, lead to very high cost duplicity, balanced only by a relatively minute bit of electricity generation.0 -
Hi Cardew
What seems to be missing is that the original tranche of the FiT subsidy was to kick-start an industry and limited in scale and scope and it looks like it has gone a long way to achieving it's goal, evidenced by the ability to review the tariff at an earlier stage that originally envisaged. Due to global demand mainly driven by subsidies in many countries, including the UK, manufacturing capacity has ramped up and unit prices reduced, so of course the subsidy needs/needed to be addressed, prices will fall again over time and subsidy levels will reduce again as production efficiencies improve and new technologies are introduced ... eventually there will be a point where subsidies are no longer required ..... this endpoint would be reached eventually without subsidy, but possibly not within the lifetime of the majority reading this post, whereas with initial supporting subsidy it is very likely that it will happen. Then there's 'climate change': those who believe in 'global warming' could not possibly be against subsidies in order to accelerate the takeup of renewables (and still be taken seriously) .... I do also note the use of an emotive level of subsidy payment in the post, but what is the total unamortised cost of the first kWh of production from any method of generation ?
Regarding location ... I agree, in terms of pure cost it would be more cost effective to install pv in locations where the insolation is highest, however, considering that there is only around a 20% difference in insolation between any parts of the country would the cost saving for doing this offset a likely costly upgrade to the grid, or even cover the transmission losses between say Truro in the S/W and the energy hungry S/E centred on London .... The theory of moving towards microgeneration technologies of any kind is to move generation closer to consumption, pv is part of that strategy and, if ignoring the emotive issue of cost for the moment, makes absolute sense. In my mind, what doesn't make sense is the missing associated government stategy and supporting policies for dealing with the unreliable nature of most renewable energy sources .....
The analogy regarding TV subsidies is actually valid ..... the 'wealthy' subsidised the development of the TV manufacturing industries by paying what in real terms is possibly more for an early generation TV than the cost of an array of panels today .... I do hope that everyone watching TV this evening will at least thank the previous generations for allowing them to afford their little pleasures
. Added to this expenditure were the massive setup costs for television broadcasting ... these must have been seen as an appropiate and acceptable subsidy at the time, a leap of faith in the belief that there would eventually be more than 14000 viewers ... you must admit that if the rest of us were still listening to the 'wireless' and almost the entire TV broadcasting budget of the BBC was being concentrated on 14000 wealthy individuals then there would be an uproar ..... but it isn't and there isn't, and that's exactly what subsidies do, therefore we should all take time to thank all of our forefathers, the wealthy & the poor, for having 'paid those subsidies' as we next sit infront of the gogglebox for our cheap entertainment ...
HTH
Z"We are what we repeatedly do, excellence then is not an act, but a habit. " ...... Aristotle0 -
Higrahamc2003 wrote: »Same here!
I think it a poor argument to say that subsidies sometimes help industries along, therefore solar (and by extrapolation anything else) should be subsidised.
A test for any electricity generation proposal should be - Can it be relied upon with at least 99% certainty to generate at the period of maximum demand?.
A simple test, easily answered. If it can, then further tests can be devised to see if the idea is worth persuing, if it fails, then the technology shouldn't attract any subsidy imv. This because it means that however much generating capacity is installed by the failing technology, there will have to be an equal amount of reliable capacity installed too (I hope it's clear why that is).
It's easy to see that this industry is capital intensive (i.e. high up front costs and low running costs relative to the capital costs). Obviously, that is the worst situation when talking about capacity duplication (as we are with wind/solar). We have to pay the very large up front cost twice - and of course this cost is in the billions/tens of billions.
So my view is subsidise viable, prospective nascent developments/technologies/industries if required to kick start them, but don't try to kick start pretty pointless industries which will only, at best, lead to very high cost duplicity, balanced only by a relatively minute bit of electricity generation.
I agree with parts of the post, but where it all falls down is the reliance on concentrating on solar pv as a standlone solution from an engineering viewpoint and not adequately considering at what point the cost and effort in developing pv as part of an integrated solution becomes viable.
Take the extreme .... if pv cost 1p/Wp installed would the perspective change ?, of course it would, any engineer or accountant would agree too .... so the engineering and finance solution is to reduce the cost to an affordable level, whatever that is deemed to be .... it's just a case of finding a way to do so. Add in the climate change lobby/issue and you get a little urgency .... so how do you achieve an affordable solution urgently other than subsidising industry to develop whilst not producing (R&D), or driving the market directly with something like FiTs which encourages industry to react to competition and finance their own R&D from sales ? .... I suggest that there aren't too many alternative solutions ....
Regarding 'very high cost duplicity', yes that is a problem, but an enginner should stand back and look for a solution to the problem posed .... that's what engineers are for and are good at, solving problems .... so how do we store vast quantities of unused energy from multiple sources ? .... should it be centralised through massive pumped water reservoirs, or should it be distributed as per the microgeneration model and have lots 50 tonne weights winched 10 metres vertically ? .... plenty of PE there to run a freezer or TVs for a while when it's dark ... problems have solutions, the problem isn't pv, or windpower, or nuclear or the peak time difference between the UK and France, it's simply cheap, reliable energy storage ...
HTH
Z"We are what we repeatedly do, excellence then is not an act, but a habit. " ...... Aristotle0 -
The analogy regarding TV subsidies is actually valid ..... the wealthy subsidised the development of the TV manufacturing industries bt paying what in real terms is possibly more for an early generation TV than the cost of panels today ....HTH
Z
Hi zeupater
Perhaps I haven't made myself clear, but you appear to have totally missed my point.
It is not in dispute that the 'wealthy' in the early days made some contribution to the development of TV. They clearly paid a lot of money for their sets.
Where your analogy falls down is that that it is the 'wealthy' who have gained from the development of Solar PV; and they have profited at the expense of the the other 99+%(including the poorest) who have directly paid extra on their bills so the wealthy can make large profits.
Your analogy would only apply if the wealthy fitted PV systems and got no subsidy at all(FIT) from the rest of the population.0 -
Yes .... and the point is that the 'wealthy' who paid a considerable amount of wealth at the beginning of the FiT scheme to kick-start the industry will make their money plus a little back and those who came along later will make a considerable profit .... the comparative level of subsidy is more to do with an issue of timing of the reduction than anything else as not all will 'profit' the same ....Hi zeupater
Perhaps I haven't made myself clear, but you appear to have totally missed my point.
It is not in dispute that the 'wealthy' in the early days made some contribution to the development of TV. They clearly paid a lot of money for their sets.
Where your analogy falls down is that that it is the 'wealthy' who have gained from the development of Solar PV; and they have profited at the expense of the the other 99+%(including the poorest) who have directly paid extra on their bills so the wealthy can make large profits.
Your analogy would only apply if the wealthy fitted PV systems and got no subsidy at all(FIT) from the rest of the population.
In exactly the same way as resulted from the manufacturing cost efficiencies from the early adoption of TVs, the reduction in cost of installed pv as a direct result of subsidised schemes all over the world means that systems become more affordable, the subsidy can be reduced and a greater number of installations provided from the same size (annual ?) pot, which again drives down prices through competition and technology, which allows the subsidy to be reduced per install .... until the subsidy is no longer required ....
Regarding 'Your analogy would only apply if the wealthy fitted PV systems and got no subsidy at all(FIT) from the rest of the population' .... this is true regarding the relative price of television sets, which never had subsidies and were financed by the 'wealthy', and this should be obvious from the originally posted analogy. The point is being missed that the BBC received vast amounts of public money directly from the government and also probably diverted large proportions of the 'wireless' reception license money in order to subsidise the television service to the early users of the service .... a subsidy to the wealthy whilst only the wealthy could afford the TV sets, to the wealthy and not so wealthy when they could afford it too, until the television service finally became self financing through the TV license ..... This was repeated when colour TV was introduced, again, the broadcaster paid a vast amount for the move from B&W VHF to UHF and colour, with early adopters paying a good deal for the TV sets and new aerials, the extra infrastructure costs being initially subsidised by the government and the B&W license payers, therefore it could again be said to be funded by those who were poorer than those using the service, a subsidy from poor to rich, or whatever other way it could be worded .... I believe the analogy therefore does apply within the context within which it was posed ....
HTH
Z"We are what we repeatedly do, excellence then is not an act, but a habit. " ...... Aristotle0
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