MSE News: Legal battle launched over solar subsidy cuts

Cardew

albyota wrote: »

martyn1981, If there is no subsidy, what is going to encourage takeup, surely not the lower cost of installation of 4k or 5k, or even the lower generation average of around 1,500 kWh / yr (worth £165) off their annual bill, even at £5,000 for a 3kWp system, this gives ROI of 30 years not counting replacement / repairs or loss of interest. who is that green?

If the panels were free, the standing costs of scaffolding, labour cabling, meters, inverter, profit etc would still probably be £4k.

I have not read a single report that envisages solar to be 'self sufficient'.

Places like Pheonix in Arizona(basically a desert area) which has peak demand during summer days when aircon is essential has perhaps the most to gain from solar.

albyota

Cardew wrote: »

I have not read a single report that envisages solar to be 'self sufficient'.

I dunno bout that, I'm getting pretty close, with battery charger, 110Ah leisure battery and pure sinewave inverter running LED lighting at night, and running the ASHP during 11am to 4pm when my 3kWp PV array is at its best. :j

zeupater

Cardew wrote: »

The main thrust of my argument on subsidies, is that for the same level of subsidy,(that we pay) all of your objectives above would be met with output several times higher if we had solar farms.

Hi

But there's absolutely nothing to stop the solar farms being built as the subsidies are there, the problem seems to be that the level of subsidy isn't sufficient to meet the objectives evidenced by the creation to date of 70x more installed capacity below 4kWp than in the farm-scale banding between 100kWp and 5MWp ..... this is the crux of the issue, the subsidy for farm-sized systems either hasn't stimulated enough demand, or a combination of NIMBYism and the current planning system is stalling development, whichever, if we were relying on farm sized systems it seems that there would be very little progress.

The likely solution would be to increase subsidy on larger systems and/or change the planning system, the first would result in "that for the same level of subsidy,(that we pay)", substantially less capacity would be installed than would at first seem viable when comparing existing tariff bands, the latter, well whatever the tariff there will be NIMBYs around, but simplifying the process would help which is exactly what has been going on for the past 3 years resulting in a first Draft framework (http://www.planningportal.gov.uk/planning/planningpolicyandlegislation/reform/nppf) having been consulted upon, and nothing more .... (3 years! - didn't I raise the effectiveness of government in a recent post, well here's a good example ) ... so nothing solid yet which would aid the removal of roadblocks .....

HTH
Z

zeupater

albyota wrote: »

martyn1981, If there is no subsidy, what is going to encourage takeup, surely not the lower cost of installation of 4k or 5k, or even the lower generation average of around 1,500 kWh / yr (worth £165) off their annual bill, even at £5,000 for a 3kWp system, this gives ROI of 30 years not counting replacement / repairs or loss of interest. who is that green?

Hi

It's pretty likely that when pv prices have fallen sufficiently that net-metering will be allowed via some form of smart meter .... this changes the calculations which would be required to justify takeup significantly as it will effectively match export pricing to market pricing, just that you wouldn't be paid for long-term overproduction, which itself would also possibly encourage the takeup of some smaller systems.

HTH
Z

The_Green_Hornet

Just to add my own add my own two penneth to the debate, I personally would scrap all generation and consumption subsidies and use the money to upgrade the energy efficiency of our housing stock.

Martyn1981

albyota wrote: »

martyn1981, If there is no subsidy, what is going to encourage takeup, surely not the lower cost of installation of 4k or 5k, or even the lower generation average of around 1,500 kWh / yr (worth £165) off their annual bill, even at £5,000 for a 3kWp system, this gives ROI of 30 years not counting replacement / repairs or loss of interest. who is that green?

Agree, it's a personal decision, but I don't think the numbers are that bad. Not good, but not that bad.

If panels continue to drop as they have been doing, then looking at the upper end of UK prices, which in themselves are high compared to the mainland Europe which has a larger and more established PV industry then;

a 250Wp panel today costing £250, can at 20% year on year reductions become, £200, £160, £130, £105, £85.

This would allow the cost of a 4kWp system to fall towards £5k, especially given the way embedded costs have been falling as the industry matures.

1,500kWh's for a 3kWp system is very low, reading on other forums, PVGIS and BDPV, figures around 900kwh's per kWp are more reasonable. Recently saw 1,115kWh's / kWp for an off south system in Lincs.

So I'd say for a 'good' (the first to invest will have better locations and orientation) 4kWp system, 3,600kWh's pa is fair.

That's 3,600 * 40 * 90% (low estimate of average efficiency over lifetime) = 129,600kWh's of electricity, for consumption and export, at a pre-paid rate of 4p/kWh.

There will be additional inverter costs of course, but also rising fuel prices. Maintenance should be minimal.

Compared to putting your money away safe, it's a financial decision that certainly won't suit all, but I think the numbers are good enough to persuade some. My father likes to pay his gas bill, about £400, in advance to receive a small discount. this is similar, though obviously on a much greater scale. Or replacing a gas central heating system to improve efficiency and reduce future gas bills.

Lastly, loved the forward thinking in your 9.53pm post yesterday, it encompasses so many of the ideas and plans that we can hope to see in the next 10 years.

Mart.

Martyn1981

Cardew, regarding post 145, and comparisons of small and large PV installations. There are a lot of factors to consider.

A large install will save substantially on economies of scale (possibly 50% on panel prices), and scaffolding costs (approx £300 / 16 panels).

However it will incur large grid connection fees, and the cost of ground mounts 8m * 3.5m per 16 panels, plus the installation costs of those ground mounts. There will also be planning costs.

Additionally, on top of any costs also incurred by small systems, it will also have large annual running costs, land, security and insurance.

Next, we both want to see subsidies gone, and the capital cost of PV installs is being financed privately. So to become financially viable as an investment opportunity a farm must beat wholesale prices, whereas a domestic or commercial install only has to meet retail or a mix of the two, to become viable. This gives domestic installs about a 2 to 1 advantage on price point, and a commercial install with higher consumption of generation about a 3 or 4 to 1 advantage.

I'm not saying a large install can't overcome these cost differentials, I honestly don't know, I just think they are substantial. Any thoughts on actual cost comparisons would be interesting.

Cheers.

Mart.

Blossom2528

Thanks Zeup and sorry about the bad English, typing too fast. Just dont know what the alternative is so why argue. Got to teach all the kids something and dont want it to be money before environment.

Sorry Mart didnt want to make it worse. thanks for all those numbers.

Cardew

zeupater wrote: »

Hi

But there's absolutely nothing to stop the solar farms being built as the subsidies are there, the problem seems to be that the level of subsidy isn't sufficient to meet the objectives evidenced by the creation to date of 70x more installed capacity below 4kWp than in the farm-scale banding between 100kWp and 5MWp ..... this is the crux of the issue, the subsidy for farm-sized systems either hasn't stimulated enough demand, or a combination of NIMBYism and the current planning system is stalling development, whichever, if we were relying on farm sized systems it seems that there would be very little progress.

The likely solution would be to increase subsidy on larger systems and/or change the planning system, the first would result in "that for the same level of subsidy,(that we pay)", substantially less capacity would be installed than would at first seem viable when comparing existing tariff bands, the latter, well whatever the tariff there will be NIMBYs around, but simplifying the process would help which is exactly what has been going on for the past 3 years resulting in a first Draft framework (http://www.planningportal.gov.uk/planning/planningpolicyandlegislation/reform/nppf) having been consulted upon, and nothing more .... (3 years! - didn't I raise the effectiveness of government in a recent post, well here's a good example ) ... so nothing solid yet which would aid the removal of roadblocks .....

HTH
Z

The reason solar farms are not springing up is they cut the subsidy earlier in the year without much publicity as it didn't affect the general public. The reason given was:

When the Government announced its review it said it needed to avoid large-scale solar "farms" squeezing out the domestic market. DECC said yesterday that every 5MW large-scale solar scheme would cost about £1.3m a year. That means that 20 such schemes would cost the same as installations for more than 25,000 households.

Their definition of the 'Domestic market' is the approx 1% of properties and a large percentage of that for Rent a Roof firms.

For instance A Shade Greener proudly proclaim on their website that they have installed over 10,000 systems.

A Shade Greener are the UK market leaders in the free solar industry and with over 10,000 group installs under our belt,

As their systems are 3.3kWp that means they have a generating capacity of some 35MW and with every generated kWh getting 43.3p + 1.55p, that means we the electricity customers are paying them around £13 million a year.

I rest my case!

zeupater

Cardew wrote: »

The reason solar farms are not springing up is they cut the subsidy earlier in the year without much publicity as it didn't affect the general public ....

... I rest my case!

Hi

I wouldn't rest a case on that position .... my point raised the farm sized capacity installed to date, not post tariff reduction.

The important difference is that the cut in subsidy was only effective from 1st August 2011, that means that there were 16 months available to install at the pre-reduction rates (2 years if you include the pre-launch FiT eligibility period), and 5 months at the reduced rate ..... assuming that finance would have been available for 'farm scale' projects it's likely that the planning process was initially the main roadblock, however, I'd hazard a guess that a number of groups were holding off on projects whilst material costs were falling rapidly and when the tariff was modified simply placed those projects on hold until panel prices allow a reasonable margin to return. Whatever the mix of reasons, it's still 70x more capacity in <4kWp than >100kWp, that really does show where the growth in the industry within the UK has been in the last couple of years ....

HTH
Z