Solar PV Feed In Tariffs - Good or Bad?

jamesingram

locals usually best , more to lose if they dont perform .
As to available capital you could always borrow the money if that option is available to you.

zeupater

grahamc2003 wrote: »

Sorry but I disagree with that. It follows from what you say that if we had no fits over the last 2 years and therefore virtually no solar, then prices today would be those from 2 years ago (i.e. ab £15k for a 3kw system). I'd say uk actions have done nothing (beyond noise) to change any of the prices, and if we started fits today (to give a 6% return), then a typical system prices would be £7k, not £15k.

Boils down to a saving of £0.5bn for the UK, with a tiny amount of low value generation foregone. (i.e. 50% fit level). Everyone now on a 43p+rpi for 25 years would be on a 21p+rpi for 25 years, having shelled out just half the upfront cost.

Installers buying in bulk now would be paying half of the bulk price 2 years ago irrespective of how much solar is currently installed. We haven't affected world wide demand beyond the insignificant imv.

(Again, as with many things, the scale of things is misunderstood imv. Like the uk thinking closing or keeping one coal power station affects the planet, when other countries are building 3 every week!). I'm afraid Cool Brittania no longer rules the waves, or indeed has a significant effect in anything global these days (probably due to a similar attitude to that leading to the prefix of 'cool')

Hi Graham / All

What is being missed in the above is that the subsidies available in the UK are a part of a global concerted effort to build pv capacity ....

You are correct in saying that UK actions have had little overall effect on their own, but have helped a little. Germany has done the 'heavy lifting' regarding subsidy to create a demand on manufacturing, you could not really disagree with this viewpoint and still be taken seriously, so subsidies elsewhere are working to reduce panel prices, but subsidy in the UK have no effect ? .... if there were no subsidies at all for pv would volume production have ramped-up and prices fallen so quickly ? ... if FiTs hadn't been introduced globally then the assertion that prices would be ~£7k is flawed, even allowing for natural organic industry sector growth systems would more likely be well over £10/Wp installed, as they were not too many years ago ...

Have FiTs which have been introduced on an international basis contributed in a massive decrease in installed cost ? - well the evidence says 'Yes' .... Are reductions in prices for pv for the end-user better than no reductions ? - well, unless you're linked to the industry and are seeing reduced turnover and margins, the answer would be almost definately be 'Yes' ... Have FiTs been more successful in kick-starting a market than the previous grant based systems ? - well considering that every time grants were available the price of product increased by the value of the grant and when the grants funding was used up the prices fell again, linked to very slow increases, if any, in renewables market penetration, then the answer must be 'Yes' ..... So are FiTs Good or Bad ? - logic would say 'Good', but maybe there should be another question posed ... Has the administration and control of the FiTs scheme in the UK been Good or Bad - My view is Bad, and I think that many are really confusing the two questions when formulating a view or position ...

HTH
Z

Cardew

Hi Z,
You, and the proponents of solar, base your arguments on the notion that Solar PV is an essential ‘commodity’ – and it simply ain’t!


We don’t purchase any other commodity that ‘ain’t’ essential it until it can be bought at a reasonable price. So why can’t we do without solar PV until such time it becomes financially viable to produce it on a small/medium/large scale?

jamesingram

Cardew wrote: »

Hi Z,
You, and the proponents of solar, base your arguments on the notion that Solar PV is an essential ‘commodity’ – and it simply ain’t!
We don’t purchase any other commodity that ‘ain’t’ essential it until it can be bought at a reasonable price. So why can’t we do without solar PV until such time it becomes financially viable to produce it on a small/medium/large scale?

Not essential , desired . (very few things are essential)
As to purchasing other desired commodities I can think of a few that I wouldn't call reasonably priced.

Back to PV price driver here in the UK (Z's point about UK playing a very small roll internationally is fair )
If we'd waited here in the UK , yes material price would have dropped , and UK installers would have had to be more keen to avoid foriegn competion, but the wheel of the UK PV install/supply chain would still have taken time to get rolling so it's too simplistic to say , price would have drop to what the are now , if we'd have started now.
Installer/supplier would require quick return on set up investment so UK prices would be higher in the delayed FITs start example. Bulk purchase discount would also build slowly as confidence increased.


"So are FiTs Good or Bad ? - logic would say 'Good', but maybe there should be another question posed ... Has the administration and control of the FiTs scheme in the UK been Good or Bad - My view is Bad, and I think that many are really confusing the two questions when formulating a view or position ..."
I couldn't have put it better myself

Martyn1981

zeupater wrote: »

Hi Graham / All

What is being missed in the above is that the subsidies available in the UK are a part of a global concerted effort to build pv capacity ....

So are FiTs Good or Bad ? - logic would say 'Good', but maybe there should be another question posed ... Has the administration and control of the FiTs scheme in the UK been Good or Bad - My view is Bad, and I think that many are really confusing the two questions when formulating a view or position ...

HTH
Z

Z - have to agree with that summation. Had the scheme been run better, then it wouldn't have become so emotive.

I think the actual design of the scheme is quite good. It's easy for each individual to calculate what they should get with reference to a good website. And they can then make a long term decision as best suits their finances.

However, whilst the original 41p was probably about right (maybe slightly generous) it was the failure to review it much sooner, either last April or last August when the larger installs were reviewed, that has thrown the whole scheme into disarray. Had the FIT been reduced to 35p or less last August, and perhaps 25p last December (scheduled) then the boom and bust could have been avoided, and a smoother level of installations taken place. Also an established review process would have allowed for an easy alteration now / April to 21p or less.

The RaR's are another big problem, whilst they boosted the installs, and the money is shared out a little (householders save money, and the govt get some tax revenue), they effectively 'sucked up' a huge proportion of the fund, in a way for which it was never designed. I feel the RaR's could have been dealt with better and faster.

Overall, good scheme, and good scheme structure, but failure to administer properly as matters ran out of control. Don't want to be too hard on DECC, I doubt they are used to having to react so quickly to a scheme such as this. Hopefully the hard lesson has been well learned.

Mart.

zeupater

Cardew wrote: »

Hi Z,
You, and the proponents of solar, base your arguments on the notion that Solar PV is an essential ‘commodity’ – and it simply ain’t!


We don’t purchase any other commodity that ‘ain’t’ essential it until it can be bought at a reasonable price. So why can’t we do without solar PV until such time it becomes financially viable to produce it on a small/medium/large scale?

Hi

I can follow your logic, however, let's put this within context .... is public transport essential ?, if it is considered as being essential in some/all cases would that include within an urban environment ?, if so would it be considered as being more essential in an urban environment that a rural one ?, and why considering that other essential services in a rural environment are less likely to be within a reasonable distance ? .... so why would people pay for (purchase) what could be a considered to be a 'non-essential', especially considering that it's not likely to be financially viable and require additional and continual subsidy, whatever the scale .... there are many other example which could just as readily have been used .....

I believe what you are really suggesting is that the UK distances itself from taking part in a global limited-scope subsidy scheme which is designed to reduce pv costs and simply allow other countries to provide subsidies in order to reduce global prices with a view to then take advantage of the price reductions resulting from their subsidies ? .... if so I consider that this would be seen a being a little unjust by others, especially those in the other countries :D .... As it stands, the UK's contribution to panel price reduction is insignificant compared to countries such as Germany and that relative scale almost describes what I believe your suggestion to be ....

I'm really afraid that raising the 'emotive' issue of subsidy whilst failing to recognise that the subsidy argument is weakening, and will continue to do so as the subsidies fall, is simply utilising what is likely to be the only anti-renewables defence which can be divisive, that being the age-old social divide ....

Considering the above, I'll turn around the question posed of "why can’t we do without solar PV until such time it becomes financially viable to produce it on a small/medium/large scale" and pose it as ... Why can’t we provide a global limited-scope boost to solar PV as a catalyst to encourage the technology to become financially viable to produce it on a small/medium/large scale ?

HTH
Z

Cardew

zeupater wrote: »

Hi

I can follow your logic, however, let's put this within context .... is public transport essential ?, if it is considered as being essential in some/all cases would that include within an urban environment ?, if so would it be considered as being more essential in an urban environment that a rural one ?, and why considering that other essential services in a rural environment are less likely to be within a reasonable distance ? .... so why would people pay for (purchase) what could be a considered to be a 'non-essential', especially considering that it's not likely to be financially viable and require additional and continual subsidy, whatever the scale .... there are many other example which could just as readily have been used .....

I believe what you are really suggesting is that the UK distances itself from taking part in a global limited-scope subsidy scheme which is designed to reduce pv costs and simply allow other countries to provide subsidies in order to reduce global prices with a view to then take advantage of the price reductions resulting from their subsidies ? .... if so I consider that this would be seen a being a little unjust by others, especially those in the other countries :D .... As it stands, the UK's contribution to panel price reduction is insignificant compared to countries such as Germany and that relative scale almost describes what I believe your suggestion to be ....

I'm really afraid that raising behind the 'emotive' issue of subsidy whilst failing to recognise that the subsidy argument is weakening, and will continue to do so as the subsidies fall, is simply utilising what is likely to be the only anti-renewables defence which can be divisive, that being the age-old social divide ....

Considering the above, I'll turn around the question posed of "why can’t we do without solar PV until such time it becomes financially viable to produce it on a small/medium/large scale" and pose it as ... Why can’t we provide a gobal limited-scope boost to solar PV as a catalyst to encourage the technology to become financially viable to produce it on a small/medium/large scale ?

HTH
Z

Hi

Anyone reading the above could be forgiven for thinking that the incentive for people to fit solar to their roofs was a public-spirited gesture to ensure the UK ‘did their bit’ to stimulate the worldwide solar industry; and the financial rewards were secondary.;)

You are absolutely correct that I am suggesting ‘that the UK distances itself from taking part in a global limited-scope subsidy scheme’. Like much of the USA, China, India etc etc. Also because of our latitude we have much less to gain from solar.

Germany went overboard on solar because of the huge Green movement and the influence it wields; and even they have heavily revised their subsidies; despite being by far the richest country in Europe.

A better analogy IMO than public transport is to consider UK and France producing Concorde. Our Governments wasted hundreds of millions of pounds(billions in today’s money) building a technologically wonderful, commercially useless, aircraft. The grand aim was to revolutionise air travel.

‘La Grande Alliance’ tried to get other countries to participate in the project. With the exception of Russia(who tried their own version), the common theme was - we have perfectly good aircraft that will cost much less to operate; when improvements in technology make it financially feasible we will reconsider.

Solar = Concorde

zeupater

Cardew wrote: »

Hi

Anyone reading the above could be forgiven for thinking that the incentive for people to fit solar to their roofs was a public-spirited gesture to ensure the UK ‘did their bit’ to stimulate the worldwide solar industry; and the financial rewards were secondary.;)

You are absolutely correct that I am suggesting ‘that the UK distances itself from taking part in a global limited-scope subsidy scheme’. Like much of the USA, China, India etc etc. Also because of our latitude we have much less to gain from solar.

Germany went overboard on solar because of the huge Green movement and the influence it wields; and even they have heavily revised their subsidies; despite being by far the richest country in Europe.

A better analogy IMO than public transport is to consider UK and France producing Concorde. Our Governments wasted hundreds of millions of pounds(billions in today’s money) building a technologically wonderful, commercially useless, aircraft. The grand aim was to revolutionise air travel.

‘La Grande Alliance’ tried to get other countries to participate in the project. With the exception of Russia(who tried their own version), the common theme was - we have perfectly good aircraft that will cost much less to operate; when improvements in technology make it financially feasible we will reconsider.

Solar = Concorde

Hi

Would you not consider that the elephant in the room on that argument is that the production volume on Concorde was never ramped up to an extent where the cost/unit fell ? .... is that anything like the same as the situation with solar pv ? ... do you believe that there is absolutely no likelihood that solar installation prices will reach a level where subsidy is required, and if so, is there any supporting evidence to support this position ? .... I would suggest that considering that pv volumes have ramped-up considerably it would be better compared to the 747 ....

Considering that there is likely to be a point in the not-too-distant future where the subsidies to support new installations will be removed, is this view likely ? .... if so, then surely the limited-scope subsidy would be successful - would this not be considered as being good ?

Regarding the reductions to the heavy subsidies available in Germany, would these likely be due to the reductions in prices as a result of the success of the subsidy building economies of scale ? .... would this not be seen as further evidence that the logic behind the FiT has been successful in Germany and on the back of that would that very success support the position that the subsidy in the form of FiTs is good ? ....

(Solar = 747, a success story)

HTH
Z

Cardew

Z

Surely you understood the point I was making was that 'the rest of the World' didn't get involved with Concorde and were not prepared contribute, but to soldier on with the 707 etc until cheaper technology was available; and as you put it, the cost/unit fell.(which hasn't yet happened!)

You seem to feel that it is our duty in UK to subsidise house owners/RAR companies [STRIKE]so that they can make a lot of money[/STRIKE] to drive down worldwide prices.

However the USA, China, India etc etc largely don't provide subsidies and are content to wait until prices make solar financially viable; and solar is of far more value to those countries because of the Geographic location. But Britain must do its duty!!!!



Of course the German model has contributed to falling prices. However again your 'Start Point' is that Solar PV generated electricity is 'essential' - and it simply ain't!

There are many ways of producing electricity - mainly thermoelectric - but the cost is prohibitive. However I am sure if we supplied big enough subsidies the costs would come tumbling down to perhaps £2/kWh;)

jamesingram

hi Cardew
£2/KWh , how you get that ?

If you brought a 4kW sys. outside of FITs today ( lets pretend it stopped today)

It would cost you around £5.5K materials and roof access
then get an electrian+roofer ( No need for MCS people ) to fit say £1000

£6,500+vat @5% (ok reduced vat rate is a subsidy still) = £6825
say £2000 for future maintenance over the next 25 years = £8825

Install it on a site that can use its full output as and when generated.

South facing approx 3400kWh/y x 25 = 85,000 kWh (probably higher pa but allows for cell degrading)

£8825 / 85,000 = 10.38p kWh (if it continue to generate after 25 years, which it should, then even cheaper)

UK FITs has helped achieve this for the 100% to use if they so desire.