End in sight for Rent a Roof companies

Cardew

The detail of the Review of PV FIT is below.
http://www.decc.gov.uk/en/content/cms/news/gb_fits/gb_fits.aspx
http://www.decc.gov.uk/en/content/cms/consultations/fits_comp_rev1/fits_comp_rev1.aspx
The relevant quote for Rent a Roof Companies is

The consultation also seeks views on two other changes to the FITs scheme for solar PV. Firstly, the introduction from 1 April 2012 of new multi-installation tariff rates for aggregated solar PV schemes. These are schemes where a single individual or organisation owns or receives FIT payments from more than one PV installation, located on different sites.

The new proposed FIT rate for Rent a roof is to be 16.8p/kWh – still too high IMO.
The counter the inevitable campaign by Rent a Roof companies who see their opportunity to make vast profits diminishing – profits paid for directly by us consumers in higher electricity prices – everyone interested should complete the electronic form in the above Documents

rogerblack

I'm not actually bothered by rent-a-roof.
They seem to me to be just as bad as people purchasing panels.
The only important bit is efficiency.
How many pence per kilowatt-hour subsidy am I (as a user of electricity) having to pay for generated power.

It seems clear that the cheapest place to put up panels is not on domestic roofs, in tiny quantities, but on very large roofs, in fields, ...
If it's wanted to have the consumer able to invest - fine - let them buy shares in these more efficient solar farms.
If they want the panels on their roof, then they can - but they should only be paid at the same rate that makes large-scale solar affordable.
There are other options that would involve modest reform of the system.

For example.
'The new B+Q solar shed.
This quality shed with a lifetime warranty (25 year on solar elements) is a convenient well-insulated addition to any garden!
Its solar roof means that in addition to paying for itself and reducing your carbon emissions, you never need to re-felt or do anything else to the roof!
It is simply constructed by the competent DIYer.
This quality product is delivered to your garden for only 2000.'

BornAtTheRightTime

If you force R-a-R schemes out of the market you remove the option for some of the fuel-poor to benefit from solar PV.

However I don't think the proposed changes will see the immediate end of R-A-R schemes or of individual investors. I think there will be a step-change reduction in the margins that installers are currently making - as evidenced by the ability of the market to respond quickly to Tesco's overnight 20% reduction this summer.

During my time of getting quotes, installers were clearly starting from a 'good rate of return to the investor' of say 10%pa, and then back-calculating to get the price that delivered this return. The actual cost to them is way less than the overall cost they are charging at the moment with margins probably in the region of 40% or more. As much as I knew I was being overcharged I didn't mind because it still delivered a great return.

The FIT reduction simply recognises this and will force the market to become more competitive more quickly. R-a-R companies benefit from the economies of scale that having their own installers bring, so ought to be able to afford a lower tariff than the individual investor.

Getting slightly away from the point now but looking forward, as the cost of solar PV is forced downwards and FITS are forced downwards, the financial return (which is made up from the 3 components of FITs, imported electricity reduction and export tariff payment) which is currently dominated by the FIT element will start to rebalance towards the electrical bill savings. For example, say a typical 4kWp system will come down to £8000 and produce £600pa FIT whilst the £150pa usage reduction and £50pa export benefits remain the same as current (ignoring electricity price hikes). Firstly, there's the 10% return again and secondly, at this point the electricity savings start to become significant - carry on in this manner and eventually the electricity savings alone will justify solar PV - at which point FITs can be removed completely (perhaps then the R-a-R companies' end will truly be in sight!).

Of course this requires competition in the market to force purchase prices down - but isn't that exactly what the FITs, which created the market, and the reductions, which are creating competition, are achieving? Would we have had such an effective kick-start to the solar PV market without FITs? I don't think so, but looking forward to seeing alternative views.

beedydad

I do not think your first comment really counts as the fuel poor will need more help than some company sticking on loads of PV panels saying "we are your saviours" - let us put this expensice kit on your roof we will gain loads of income for 25 years and you can worry about how you can use the "free energy" and get £100 - £150 off your bills. That is if the same said "energy poor" have sufficiently large roofs with which such kits can be put on!

If they are so community spirited why don't the RAR mob give out statistics showing that they have helped the "energy poor and needy"? then we may have some sympathy.

Your second point about the electricity used part of the 3 way equation becomes promanent - this only works if you would actually be able to use MORE of the generated power rather than just a calculation that energy bills go up therefore it is a better return - the whole idea of renewables and carbon/energy cutting is exactly to think about usage and reduce it and/or use it much more wisely/effectively.

Regards

larkim

Guess who posted his forms back to Eon today for a rent-a-roof installation...

Can't see them honouring that (their website for the solar exchange product has been taken down), which is a shame as I quite liked the idea of getting solar for free. Given that the cost of install was apparently going to be free, my returns far surpass the 10% others might have got (even at £99 install, my returns would have been possibly 50% per annum, albeit not much cash!!)

Perhaps (just perhaps) they'll be able to arrange the install before the early December date, and I can have some small amount of smug satisfaction that I'm doing slightly more for the environment than I was previously at very little expense for myself.

Matt

Yut_Man

Where I live the local council has been fitting PV onto there houses and claming it as a resident property. Hmmm. Not surprising the goverment has had to do something. Im curious of the 100,000 houses with solar how many are actually privately owned?. Well after the announcement this morning I have never seen so many council people putting up scaffolding. the whole area is like a builders yard. Total farce, the goverment should sort there own back yard out first. I bet they will be fitted and paperwork done by the end of the week where as the private owners who it was originally designed for will have a real race if their in a simular situation. I think ill live of the state in a council house in my next life.

BornAtTheRightTime

beedydad wrote: »

I do not think your first comment really counts as the fuel poor will need more help than some company sticking on loads of PV panels saying "we are your saviours" - let us put this expensice kit on your roof we will gain loads of income for 25 years and you can worry about how you can use the "free energy" and get £100 - £150 off your bills. That is if the same said "energy poor" have sufficiently large roofs with which such kits can be put on!

I am simply pointing out that with RaR companies at least some people, who would otherwise not have any access to solar PV benefits, can get a (small) slice of the pie. Whilst this my not be in the numbers that you would like to see, it is at least better than nothing.

beedydad wrote: »

Your second point about the electricity used part of the 3 way equation becomes promanent - this only works if you would actually be able to use MORE of the generated power rather than just a calculation that energy bills go up therefore it is a better return - the whole idea of renewables and carbon/energy cutting is exactly to think about usage and reduce it and/or use it much more wisely/effectively.

Regards

Of course investors will alter their behaviour somewhat to reduce their imported power and that is all to the good, but that's not the point I'm making.
Actually this works with constant energy costs, being a simple mathematical consequence.

ie %Return = (£FITs + £Reduced Imported + £Exports ) / £Install

I am saying that as the FIT payments fall, the bill saving through using your own generated power becomes a larger fraction of the total financial return, simply because other numbers in the equation have changed.

To be viable, PV will need to maintain reasonable returns. Assuming it can, and with the increasing importance of bill savings in the equation, this will make solar PV more attractive in its own right without subsidy. Once you add into the mix your point about rising electricity prices, the bill savings become an even bigger carrot for changing behaviour.

Cardew

Martin has stated in his latest letter that many Rent a Roof firms have indicated they will not accept further orders. However A Shade Greener, Homesun and ISIS have indicated they will continue.

A Shade Greener have this announcement on their website:

FIT Payments Slashed by Government

We had anticipated this and actually think it is a good thing. It will clean up the industry. We will continue installing our free solar panels and it won’t affect our customers at all, who will continue to benefit from day one. Keep applying, we have thousands of free systems to install.

If their new business model allows a profit to be made on a FIT of 16.8p/kWh(for Rent a Roof firms) it puts into perspective the huge profits being made by the Rent a Roof industry.
The ‘Clean up the Industry’ comment is interesting and brings me to:


Homesun are a firm that introduced a payment of £500 fee and £5 monthly ‘maintenance charge’ for their ‘free’ system, together with claims of huge savings for the in-house consumption.

Someone on another thread reported that Homesun had sent him an email which stated.

"When the subsidy changes, we will be offering the SolarShare programme with a price point dependent on the level of the subsidy."

If they felt £500 and £5 monthly was appropriate for an FIT of 43.3p/kWh the mind boggles to contemplate what they consider will be an appropriate ‘price point’ for their SolarShare programme with a FIT of 16.8p!

On the ISIS website, under their ‘How much can I save banner’ (from a 3kWp system) they still have the following:

It depends on how much you currently pay and when you use electricity but we think £300 a year would be typical. Our consultants will be happy to provide you with a personalised quote.

'£300 a year is typical' eh? This despite experience and EST estimate showing that a quarter of that would be a good saving.

No doubt some poor souls will believe it is possible.

bjohnson

There are quite a few installations round here on social housing but they are not installed by the council, they belong to housing associations. The houses tend to be small and intended for pensioners who are by no means affluent and get the benefit of reduced electricity prices. Surely no-one begrudges them the subsidy?

Cardew

bjohnson wrote: »

There are quite a few installations round here on social housing but they are not installed by the council, they belong to housing associations. The houses tend to be small and intended for pensioners who are by no means affluent and get the benefit of reduced electricity prices. Surely no-one begrudges them the subsidy?

There is nothing to stop housing associations continuing to provide PV systems for pensioners. If A Shade Greener - a commercial company - can continue to make a profit at the new reduced rate of 16.8p/kWh, why cannot a Housing association?

That said there might be a case to put forward for a Charitable Organisation to claim, say, the private owner rate of 21p/kWh.

What cannot be justified is the vast majority(99.9%?) of pensioners paying, by way of higher electricity bills, for huge profits to be made by individuals and companies on the grounds that a few council/HA pensioner tenants might lose out.

I wonder how many of the 100,000 systems installed have been on council/HA pensioner tenant's roofs? 50?, 100?

You can see this is already the disingenuous line being taken by Rent a Roof companies to oppose the FIT cuts. i.e. 'it is poor pensioners that are going to lose out.' Not the real reason which is 'the unbelievably lucrative loophole we managed to expoit has been closed'

whasup

I'm pretty sure RaR schemes will continue. I visited a solar PV client of mine today and he told me costs have dropped dramatically over the last 6 months and are currently about £1.05 per watt plus the inverter. He's a small company so the big outfits will be paying a lot less than that.

They're manic at the moment. 9 orders in the last 2 days. Panels are ok - the problem is getting hold of inverters.