MSE News: Legal battle launched over solar subsidy cuts

jamesd

I'm not really capable of fitting double glazing to replace louvered windows, a central heating system and new boiler to drive it to replace open gas fires in some rooms only, others with no heating; possibly external solid wall insulation; as well as a new bathroom and kitchen and redecorating throughout that it wouldn't cover. This in a place that'd be kept at around 27C in occupied areas so there's a big value for heating improvements.

For me if the prices don't make sense I'd just do without the scheme but since I'll be selling I'd rather have the cost in the future bills than as extra capital cost for me if prices are close. A buyer isn't likely to fully value the extra bill cost but may value the improvements to the property.

The Green Deal might mean that the improvements let me withdraw all of the 25% deposit money I paid for the property, taking it back with more mortgage borrowing as a result of a higher property valuation after the work. I can make more on money than I'm paying on the mortgage interest rate so it doesn't make sense for me to have any capital tied up in the property if I can manage it. The mortgage cost is peanuts, less than a quarter of the rent I'm used to paying and barely more than council tax.

For some people I'd agree with you that it may make more sense. depends quite a bit on how sensible the costs are including interest rate cost.

Cardew

rogerblack wrote: »

Rent-a-roof is often blamed.
I've not seen any figures as to the proportion of the recent installs they were.

This is the $64,000 question. Rent a Roof(RAR) systems are registered with MCS in the name of the house owner so have they any way of knowing?

In future as private individuals get 21p/kWh and RAR 16.8p/kWh, there will have to be some way of finding out if it is a RAR property.

A Shade Greener's website was referring to nearly 5,000 systems installed just a few weeks ago - now it talks of the Group having installed over 10,000! Given their systems produce approx 3,000kWh pa - that one firm alone has an annual income of over £13,000,000 of subsidy paid for by us - the electricity customer

Martyn1981

Can I clarify a few things that have been posted.

The tariff (currently 43.3p / kWh) set by the govt could have, and should have been reduced much sooner. It was set correctly at the time, but not reduced in line with falling installation costs. This is a failure of the govt, not greed by those wishing to support PV and renewables.

Should have gone to 35p in April, and about 30p in the Autumn.

The industry support a reduction, they are not fighting to keep the status quo, they just feel that approx 25p is more accurate than the proposed 21p. 21p will probably be perfect by the summer.

One comment I read here was that subsidies shouldn't be paid at all, the industry should have to stand on its own. That completely misses the point of a subsidy, which is to encourage and speed up the roll out of a desired product. Without support PV would take longer to reach grid parity. When it does we will all benefit.

FITs are or have been implemented in about 85 different countries, this is not a strange idea.

FITs has worked brilliantly, installation costs (for an example size of 4kWp system) have fallen from approx £16k 2 years ago, to £14k last summer, £12k this summer, and about £9.5k now. The price could reach £8k by next summer. That is a success directly linked to the expansion nationally and internationally of the PV industry.

If the cost in 2 or 3 years could drop to £5k, then a south facing system could reach grid parity, and the investment would be worthwhile without any subsidy. E.g. generate 4,000kWh pa, use 2,000 saving £300 (approx 15p/kWh in 2015) and sell 2,000 at approx 5p for £100.

£400pa on £5k equals an 8% return.

However, the inverter will probably fail every 10 years costing £1k, so net £300pa or 6%, not bad.

All of this is achievable through world wide support of the PV industry and annual production doubling, leading to year on year price reductions of approx 20%.

FITs works, it just needs more regular tweeking, not this panic and destroy policy recently attempted by the govt.

When prices fall low enough it will be cost effective to roll systems out to the most vulnerable, so they will ultimately be the biggest gainers.

Lastly, the green tariff on our electricity bills accounts for approx 10% of the bill, most of this goes to support nuclear. The FITs element accounts for between 70p and £2 depending on which report you read. Hardly much to fastrack a clean energy supply that we could all be reaping the benefits from in 5 years or less. Southern Spain, Italy, Greece and California have already reached or are just about to achieve grid parity.

Thanks for listening, and Pixie, go for it. Just do lots of research and ask for help on a suitable forum such as Navitron.

Cardew

Martyn1981 wrote: »

Can I clarify a few things that have been posted.

The tariff (currently 43.3p / kWh) set by the govt could have, and should have been reduced much sooner. It was set correctly at the time, but not reduced in line with falling installation costs. This is a failure of the govt, not greed by those wishing to support PV and renewables.

Should have gone to 35p in April, and about 30p in the Autumn.

The industry support a reduction, they are not fighting to keep the status quo, they just feel that approx 25p is more accurate than the proposed 21p. 21p will probably be perfect by the summer.

One comment I read here was that subsidies shouldn't be paid at all, the industry should have to stand on its own. That completely misses the point of a subsidy, which is to encourage and speed up the roll out of a desired product. Without support PV would take longer to reach grid parity. When it does we will all benefit.

FITs are or have been implemented in about 85 different countries, this is not a strange idea.

FITs has worked brilliantly, installation costs (for an example size of 4kWp system) have fallen from approx £16k 2 years ago, to £14k last summer, £12k this summer, and about £9.5k now. The price could reach £8k by next summer. That is a success directly linked to the expansion nationally and internationally of the PV industry.

If the cost in 2 or 3 years could drop to £5k, then a south facing system could reach grid parity, and the investment would be worthwhile without any subsidy. E.g. generate 4,000kWh pa, use 2,000 saving £300 (approx 15p/kWh in 2015) and sell 2,000 at approx 5p for £100.

£400pa on £5k equals an 8% return.

However, the inverter will probably fail every 10 years costing £1k, so net £300pa or 6%, not bad.

All of this is achievable through world wide support of the PV industry and annual production doubling, leading to year on year price reductions of approx 20%.

FITs works, it just needs more regular tweeking, not this panic and destroy policy recently attempted by the govt.

When prices fall low enough it will be cost effective to roll systems out to the most vulnerable, so they will ultimately be the biggest gainers.

Lastly, the green tariff on our electricity bills accounts for approx 10% of the bill, most of this goes to support nuclear. The FITs element accounts for between 70p and £2 depending on which report you read. Hardly much to fastrack a clean energy supply that we could all be reaping the benefits from in 5 years or less. Southern Spain, Italy, Greece and California have already reached or are just about to achieve grid parity.

Thanks for listening, and Pixie, go for it. Just do lots of research and ask for help on a suitable forum such as Navitron.

Let us further clarify the situation!

If the aim is to have solar generated power - even at the latitude of the UK - then there are much easier and cheaper solutions.

We should have huge solar farms on Factory/supermarket roofs and Brownfield sites in Devon and Cornwall.

Think of the efficiency of having all that production on one site in the part of the country with the highest solar output, instead of hundreds of thousands of tiny systems dotted all over the country from Lands End to John O' Groats.

Think of the scaffolding, labour equipment needed for these tiny far flung systems, not to mention ongoing problems with maintenance and accounting for FITs.

Being even more radical UK firms could fund solar farms in the South of France(or even Spain) and bring the Electricity to UK via the Interconnector(this is used to bring that nice clean French nuclear power to UK - mainly at night)

Firms in Devon and Cornwall would fall over backwards to get a decent FIT rate(way below 21p/kWh) but instead anything over 250kWp gets a FIT of 8.5p/kWh.

Would that not be a more effective way to 'fastrack a clean energy supply that we could all be reaping the benefits from in 5 years or less' (as you put it)?

So there is absolutely no need to have any more solar systems fitted to the roofs of individual houses.

However - if the silly system must continue in its present form, at what level should the subsidy(FIT) be fixed? Well 'A Shade Greener' one of the biggest players in the Rent a Roof market(and other firms) are going to continue to fit systems when for Rent a Roof companies the FIT has dropped to 16.8p/kWh not the 21p/kWh for individual properties. So why the clamour from the solar industry? If some firms can have a business plan that works at 16.8p/kWh why can't others - it is simply because they see their cash cow being led away.

As stated above:

The fact is that the government authorised a fixed amount over a 4 year period as the maximum we, the customer, would have to pay.

With the level of subsidies so high, and making the stupid error of allowing Rent -a - Roof companies to exploit a loophole and claim the subsidy meant for individuals, 90% of that money has already been spent.

It seems that you think we should carry on the FIT scheme indefinitely for new installations? Surely no Government would be that stupid?

As has been stated many times, Solar will not reduce the UK's generating capacity by a single watt - simply because when the National Grid faces maximum demand on an early evening in Winter, solar is not generating a single watt!

Martyn1981

Calm down Cardew, it's all good.

We need as broad a range of energy supply as possible.

Yes, building large plants in Cornwall is a sensible approach, but getting individuals to lay out the money on a 30 to 40 year micro generation plant attached directly to their home also works. PV on rooftops helps to educate both the householders in efficiency and economy, and the neighbourhood in renewables.

If you're gonna build a PV plant in Spain, I'd suggest not bothering, and rather construct a CSP in North Africa instead, since you desire maximum production value.

Cheaper systems on factory roofs etc, yep great idea. And think how much cheaper those panels are, and continue to get thanks to continuing world wide support through schemes such as FITs. It's all part of the same big issue. However such systems have taken a knock due to FITs reductions. So technically you're saying don't worry about reducing FITs now as those schemes are better replaced by the larger schemes that have been scrapped by FITs reductions!

Concentrating all the generation in one spot - now I have to disagree with you. Distributed local supply should trump every time especially if we are taking a long term view on energy production and supply.

Rent a roofers can tolerate a lower rate of FITs as they are operating on a huge scale. Smaller local firms and householders can't purchase the equipment or install it at those rates, but if you want to support RaR's, then go ahead, but I think FITs should be targeted at individuals, though proportional installation costs will be higher.

You said 'It seems that you think we should carry on the FIT scheme indefinitely for new installations? Surely no Government would be that stupid?'

Did I say that? I think I said that FITs is helping to remove the need for subsidies. After all we're facing a reduction of approx 50% after only 2 years. I believe I hoped that in 5 years no subsidy would be needed. But hey, live and let live, if you want to say I said that, then go ahead and say so.

You chose to mention evening peaks in Winter, fair enough, but you forgot to mention the daytime peak from 12 noon to 2 pm which also happens on sunny days in June. Not criticising, just don't want anyone to be mislead by cherry picking data.

PV is a great source of clean renewable energy. It has the potential to achieve grid parity and is approaching that point much faster than I ever imagined possible. Potentially the cost of manufacturing the silicon crystals could go through the floor, in much the same way that silicon microchip costs have. So why knock it, how does that help anyone?

Mart.

PS for those dark winter peaks I'd propose wind turbines, but that's for another discussion me thinks.

grahamc2003

Martyn1981 wrote: »

You chose to mention evening peaks in Winter, fair enough, but you forgot to mention the daytime peak from 12 noon to 2 pm which also happens on sunny days in June. Not criticising, just don't want anyone to be mislead by cherry picking data.

.

Que?

As well as being incorrect, you obviously miss the (unassailable and most pertain) point being made.

However much unreliable generation is connected to the grid, you also have to have reliable generation to meet thew peak (which is the factual period around 17:00 to 18:00 on a cold winter's evening). If you spend billions on solar, you still can't spend any less on conventional reliable generating capacity - doubling the capital cost and leading to redundancy of expensive plant. If we need generation costing £5bn, it's best to pay one lot of £5bn rather than two lots, as we are currently doing by building unreliable capacity (mainly wind but a tiny contribution from solar).

You are also wide of the mark on your 'grid parity' views. When solar is generating it is displacing other generation at prices of 2 or 3p/kWh, and that is the price it has to fall to to reach 'grid parity', not the 11/12p retail price.

Your other figures are equally misinformed. If a person uses 50% of solar generation, then that almost certainly means storing the energy by heating water (if you know of other methods of the average bod using 50% of his solar generation, please post how), and that mostly displaces gas usage at gas prices of 3 or 4p/kWh, not the retail electricity price of 11 or 12p/kWh.

Cardew

Martyn1981 wrote: »

Calm down Cardew, it's all good.
PV on rooftops helps to educate both the householders in efficiency and economy, and the neighbourhood in renewables.

An expensive lesson especially as at best we will never have more than 1% of properties with Solar PV

If you're gonna build a PV plant in Spain, I'd suggest not bothering, and rather construct a CSP in North Africa instead, since you desire maximum production value.

This is an area on which I have considerable knowledge - and it has been given serious consideration! Not only are you talking about a further 1,000 miles from Southern France, but the security issues and vulnerability of any installation in N Africa make it a non-starter -

Cheaper systems on factory roofs etc, yep great idea. And think how much cheaper those panels are, and continue to get thanks to continuing world wide support through schemes such as FITs. It's all part of the same big issue.

Do you honestly think that the UK's tiny solar industry is the driver for cheaper solar panels?

Concentrating all the generation in one spot - now I have to disagree with you. Distributed local supply should trump every time especially if we are taking a long term view on energy production and supply.

Why? The bulk of our generation is from huge plants.

Rent a roofers can tolerate a lower rate of FITs as they are operating on a huge scale. Smaller local firms and householders can't purchase the equipment or install it at those rates,

Which was the whole point of my post above. Install PV on a huge scale, in the most productive region, without the need for scaffolding in hundreds of thousands of far-flung locations. A 12p/kWh FIT would be heaven for companies.

You chose to mention evening peaks in Winter, fair enough, but you forgot to mention the daytime peak from 12 noon to 2 pm which also happens on sunny days in June. Not criticising, just don't want anyone to be mislead by cherry picking data.

The sun cannot be relied upon in June. However with no heating that period is a fraction of the winter evening load. Look at the figures - they are all available on the NG website.

PV is a great source of clean renewable energy. It has the potential to achieve grid parity and is approaching that point much faster than I ever imagined possible. Potentially the cost of manufacturing the silicon crystals could go through the floor, in much the same way that silicon microchip costs have. So why knock it, how does that help anyone?

Mart.

PS for those dark winter peaks I'd propose wind turbines, but that's for another discussion me thinks.

The wind doesn't always blow! The generating capacity for UK has to be met by 'conventional' generation - if you can consider Nuclear as conventional.

With FIT system for individual properties we have created a monster; and have no idea how to get rid of the beast.

Martyn1981

Cardew wrote: »

With FIT system for individual properties we have created a monster; and have no idea how to get rid of the beast.

I do! We continue to reduce FITs in line with the falling panel prices and subsequent reductions in installation costs. After only 2 years the govt is aiming to half FITs to 21p (the point they's originally hoped to reach after 9 years), and whilst I think that is slightly hard today, I feel it will be about right by the summer if prices continue to fall to about £2k / kWp (£8k for a 4kWp install). So great news, we've already begun to tame the beast. Just to repeat that point as it's so important, a 50% reduction in only 2 years as a direct response to falling worldwide PV prices. When was the last time you heard about a success like that?

Given that this is a money saving site, I'm more than a little confused as to the aggressive nature of your posts. They seem a little one sided and repeatedly attempt to misrepresent, or misquote what I am saying. A system that in perhaps 5 years could, without subsidies, save people money, is surely something that should be supported, not knocked.

Your most recent comments:

An expensive lesson especially as at best we will never have more than 1% of properties with Solar PV

Education on energy conservation is essential and installs have just reached 1%, so your statement is misinforming.

This is an area on which I have considerable knowledge - and it has been given serious consideration! Not only are you talking about a further 1,000 miles from Southern France, but the security issues and vulnerability of any installation in N Africa make it a non-starter -

Hardly a non-starter, but yes more difficult, I was simply running with your idea of alternatives to domestic PV, but you don't seem to like that approach either. Including N Africa in a 'European!' super grid for renewables is important. Hopefully political issues will continue to improve in the region. The people certainly deserve such. But I'm happy to draw a line in southern Spain if you prefer, especially given their new CSP plants that have up to 14 hours of stored energy.

Do you honestly think that the UK's tiny solar industry is the driver for cheaper solar panels?

Absolutely not, my posts repeatedly refer to worldwide demand and worldwide FITs schemes. Why would you ask me the opposite of what I have posted? What's to gain by such cheap shots when I'm simply trying to illustrate the big picture?

Why? The bulk of our generation is from huge plants.

Change can be a good thing! But seriously, the national grid is under pressure, and distributed / local generation is one of the solutions. My understanding is that large centralised generation is a problem it is not desired.

Which was the whole point of my post above. Install PV on a huge scale, in the most productive region, without the need for scaffolding in hundreds of thousands of far-flung locations. A 12p/kWh FIT would be heaven for companies.

This appears to be an attempt at muddying the waters by combining several issues. My response related to your assertion that a lower FIT was possible as RaR's could cope with it, implying it was reasonable for all. My response explained why smaller installs would currently struggle. Sending you full circle back to concentrated large scale. Given that this thread is about domestic FITs, nothing will be gained by chasing tails in ever decreasing circles.

The sun cannot be relied upon in June. However with no heating that period is a fraction of the winter evening load. Look at the figures - they are all available on the NG website.

I agree, but don't understand your concerns. In the summer months PV can supply a large amount of energy from 8am to 8pm, peaking at noon or 1pm BST, when demand is high. Again referring to my posts I am not promoting PV as a stand alone or as a saviour, it just forms part of a varied energy supply. Ignoring any particular power supply is short sighted as we will need all in the future. As for reliability, on a daily basis I agree, but solar radiation levels on a monthly basis are extremely predictable. Any PV calculator site should give you a pretty accurate breakdown in monthly percentage terms of how your generation will be distributed across the year.

The wind doesn't always blow! The generating capacity for UK has to be met by 'conventional' generation - if you can consider Nuclear as conventional.

I'm not pro nuclear, but as a low carbon generator I can't see any short term alternative. As for wind, it doesn't always blow, but with approx 40% of Europe's usable wind energy we'd be silly to ignore such a huge energy source that on average is extremely consistent. But as with most renewables, the bigger question is the economic storage of excess unfortunately.

In summation, PV prices are dropping fast, and theoretically could bottom out at the cost of the glass and aluminium, since silicon crystal costs could drop to next to nothing. As a long term money saving idea, the potential for PV is great. Given that in recent years prices have fallen faster than was ever hoped, why bet against it now, when domestic electricity prices are under huge pressure from gas prices. I see current FITs as an investment to reap rewards and savings in the future (perhaps 5 years from now). Isn't that the same idea as most savings plans or insurance policies?

Have fun.

Mart.

Martyn1981

grahamc2003 wrote: »

Que?

As well as being incorrect, you obviously miss the (unassailable and most pertain) point being made.

However much unreliable generation is connected to the grid, you also have to have reliable generation to meet thew peak (which is the factual period around 17:00 to 18:00 on a cold winter's evening). If you spend billions on solar, you still can't spend any less on conventional reliable generating capacity - doubling the capital cost and leading to redundancy of expensive plant. If we need generation costing £5bn, it's best to pay one lot of £5bn rather than two lots, as we are currently doing by building unreliable capacity (mainly wind but a tiny contribution from solar).

You are also wide of the mark on your 'grid parity' views. When solar is generating it is displacing other generation at prices of 2 or 3p/kWh, and that is the price it has to fall to to reach 'grid parity', not the 11/12p retail price.

Your other figures are equally misinformed. If a person uses 50% of solar generation, then that almost certainly means storing the energy by heating water (if you know of other methods of the average bod using 50% of his solar generation, please post how), and that mostly displaces gas usage at gas prices of 3 or 4p/kWh, not the retail electricity price of 11 or 12p/kWh.

Sadly you are right about the need to retain conventional energy supplies, and that is by far the greatest problem with renewables. In a safe and healthy world we would continue to really on fossil fuel generation, but given the pressures for carbon reduction we need to look at alternatives.

Regarding the grid parity numbers, I stand by them, though perhaps I misled you with the term grid parity. Yes for energy suppliers to replace conventional generated electricity with PV electricity they would need a supply price closer to 3p. But since domestic customers are paying approx 13p to 15p for electricity, every kWh produced, and used saves them that amount. Exported electricity would only earn the 3.1p currently paid. My future example assumed prices rising to 15p and 5p respectively giving an average income (through savings) of 10p/kWh generated.

As for 50% consumption of PV, I'm a little confused (again) about the problem. Most households will use about 20% to 30% of generation if the house is empty during the daytime, and closer to 50% if the house is in use during the daytime. Other measures such as running power hungry devices on timer switches can help to maximise consumption of PV generation. Something as simple as a slow cooker can displace approx 1kWh from evening use to daytime.

But to avoid misleading anyone, and to help to offer advice to anyone thinking about installing PV, let me be more specific about my thoughts on subsidy free returns. These are only my thoughts, but hopefully fair.

Hopefully a 4kWp install will fall to around £5k in 5 years time (summer 2010 was approx £14k, summer 2011 was approx £11k, and summer 2012 looks like being close to £8k).

A south facing roof from the Midlands down would generate approx 4,000kWh pa.

If prices reach 15p import and 5p export, then a household with daytime consumption could save approx 2,000kWh of import and export approx 2,000kWh, giving annual savings and income of £400.

This is of course a best case scenario. An east / west installation would generate up to 20% less. A household not in use during daytimes, wouldn't benefit as much from savings. Northern England would probably generate about 10% less (though Cornwall would be about 10% more).

But this isn't the end, I was simply trying to give a realistic break even position in 5 years time. After that as prices continue to fall houses with non south facing roofs, and lower daytime consumption would gradually begin to benefit more and more and consider a PV install.

Let's consider the lower end. Looking at northern England, let's assume an east west installation only generates 3,000kWh pa, and only 25% is consumed, that gives 750kWh * 15p savings £112.5, plus 2,250kWh * 5p export £112.5 = £250 pa.

If prices reach £4k then even a £200 pa return starts to get attractive. And if you're environmentally minded, almost a requirement.

2 years ago I would have called the above numbers a fairy tale, I'm as shocked as everyone else just how quickly costs have fallen.

A well run FITs scheme isn't the enemy, it's just an unpleasant short term cost to help us all save money in the future. And it's going surprisingly well (for a govt scheme) at the moment.

Well we've passed the winter solstice, so best of luck to any PV'ers out there.

Mart.

SallyKing

Martyn1981 wrote: »

.
Lastly, the green tariff on our electricity bills accounts for approx 10% of the bill, most of this goes to support nuclear. The FITs element accounts for between 70p and £2 depending on which report you read. Hardly much to fastrack a clean energy supply that we could all be reaping the benefits from in 5 years or less. Southern Spain, Italy, Greece and California have already reached or are just about to achieve grid parity.

I posted a thread here about the true cost of nuclear power:

https://forums.moneysavingexpert.com/discussion/3658647

Households taxed £260 a year for Nuclear Energy but less than £2 for Solar PV.