Solar PV Feed In Tariffs - Good or Bad?

grahamc2003

jamesingram wrote: »

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 hig.her 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.

But that is an incomplete analysis. To make that system work at all, you'd need to be grid connected - that service (i.e. absorbing all the excess generation when you can't use it all) is currently free. You need the use of a multi-billion pound system (the grid) to enable your system to work, and the cost of that service is probably very expensive if priced on a commercial basis. (That free cost is an extremely high 'invisible' subsidy to very intermittent generation like wind power).

Alternatively, run through your analysis again with an off-grid system, and see the cost of battery backup plus ancillary equipent needed to absorb potentially 4kW of low voltage DC (safely, according to all regs).

To answer other recent points, there seems to be an overall assumption that solar is desirable in the uk at whatever cost, which to my mind is nonsense. If you have £1bn to spend in subsidies, you set the requirements (eg, max kwh/£, min co2/£, max value generation/£ or whatever), and feed the £1bn subsidy to the technolofy which maximises the benefit. I can't think of a single criterion where solar is better than other technologies.

You can see this 'competitive technology comparison' is missing in almost all of the arguments presented by simply substituting hamster generated electricitry for solar - and every argument still applies to that! (creating a market, keeping up employment, cost lowering over time (and then unthinkingly extrapolating a recent price drop into the future, so the technology at some stage requires no subsidy!) etc etc. I'd just ask which part of the arguments presented preclude hamster generation? And if none do, then there's something wrong with the argument.

I see solar as an 'inclusive' or 'stakeholder' technology with political rather than engineering imperatives. From this board, it's perfectly clear that as a political imperative, it works perfectly! But it is a major avoidable cost to the UK in general imv.

Cardew

jamesingram wrote: »

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.

James,

£2/kWh? I was trying to illustrate the point that if you give huge subsidies for any form of electricity production, from thermoelectrics to hamsters spinning a wheel!! the production costs will fall.

I simply don't accept that UK FITs have been the driver in reducing costs. The countries(USA, China, India etc) that have largely not paid any subsidies for will pay the same prices as ourselves.

If you believe that your figures prove that Solar PV is viable without subsidies, then why the outcry that FIT has dropped to 21p/kWh? Especially when all the electricty, for which you will have been paid 21p/kWh need not be exported.

Incidentally how do you get a site to 'usefully' use the 85,000kWh?

zeupater

grahamc2003 wrote: »

... To answer other recent points, there seems to be an overall assumption that solar is desirable in the uk at whatever cost, which to my mind is nonsense. If you have £1bn to spend in subsidies, you set the requirements (eg, max kwh/£, min co2/£, max value generation/£ or whatever), and feed the £1bn subsidy to the technolofy which maximises the benefit. I can't think of a single criterion where solar is better than other technologies .....

Hi

I think that the above misrepresents the views of others on multiple levels, but I'll attempt to just address the point as made ....

Firstly, the "assumption that solar is desirable in the uk at whatever cost" is a false premise. Almost every post I have seen regarding cost has been cost relative to subsidy with the desirability of subsidy being utilised as a mere catalyst to cost reduction in order to reach a position where subsidy is no longer required.

Secondly, and this directly follows on from the above, the reasoning that if "you have £1bn to spend in subsidies, you set the requirements", isn't the requirement to reduce the capital cost of the equipment to a point where the subsidy is no longer required so that future mass uptake of the technology can work towards the other targets raised.

Taking the above into consideration I cannot really follow the logic behind targetting the subsidy on other technologies to maximise the benefit as this has already been tried on most existing technologies without effect .... have nuclear power station prices reduced by a factor of three within two years ?, that's any two years over the past 50 .... now what about conventional coal or gas stations, there's plenty of them, so has economy of scale ever reduced the cost to a third in two years ? .... wind turbines ?, well we know that it's very likely that the 'big boys' are keeping the prices high on these, but whatever technologies discussed from here we run into planning issues and NIMBYism, so it's not likely that a sod of turf would have been cut within a two year period, so why even consider these for short-term/immediate benefit expenditure to act as a catalyst.

In conclusion " I can't think of a single criterion where solar is better than other technologies .....", well wouldn't the above describe such criteria ? .....

HTH
Z

zeupater

Cardew wrote: »

James,

£2/kWh? I was trying to illustrate the point that if you give huge subsidies for any form of electricity production, from thermoelectrics to hamsters spinning a wheel!! the production costs will fall.

I simply don't accept that UK FITs have been the driver in reducing costs. The countries(USA, China, India etc) that have largely not paid any subsidies for will pay the same prices as ourselves.

If you believe that your figures prove that Solar PV is viable without subsidies, then why the outcry that FIT has dropped to 21p/kWh? Especially when all the electricty, for which you will have been paid 21p/kWh need not be exported.

Incidentally how do you get a site to 'usefully' use the 85,000kWh?

Hi

A false dichotomy seems to exist here, how can the following be reconciled ... "if you give huge subsidies for any form of electricity production, ... the production costs will fall" ... relative to ... "I simply don't accept that UK FITs have been the driver in reducing costs" ... ?

Anyway, leaving that aside, simply taking .... "I simply don't accept that UK FITs have been the driver in reducing costs" ... would seem to be very selective ... I would read into this that either FiTs globally have had no effect in building a market and related production capacity which has driven the reducion of costs, a position which if supported would be extremely dubious ... or ... the effect of global FiTs on costs is recognised and the inclusion of 'UK' is utilised in a very selective context in order to defend a position ....

I find this dilemma quite interesting as it is one of the main pillars upon which the 'Bad' argument on this debate is based, therefore the foundations do currently seem to be a little shaky ....

HTH
Z

zeupater

Cardew wrote: »

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;)

Hi

I seem to remember that at the time that Concorde was developed there were really only four countries with a significant commercial aircraft industry ... UK, France, USA & Russia ... all of which actually played with supersonic aircraft ... Concorde, SST & TU144. Of course, it's well known that the USA was well behind in the supersonic technology race and really did as much as possible to stall the commercial use of foreign aircraft operating into the USA whilst developing their own alternative. The final nail in the coffin of SST from all sources was the early '70s increase in fuel prices coinciding with the release of the first generation of wide bodied airliners which resulted in the intercontinental commercial aircraft industry being dominated by the americans through Boeing's 747, the Douglas DC10 & the Lockheed Tristar, all manufacturers which seem to have been handed significant backdoor subsidies for these projects through their military aircraft budgets, which seems to suggest that at the time the injection of subsidies was successful.

We both agree that the loophole which allowed R-A-R scheme operators to utilise FiTs was wrong, and I for one am quite happy to see that, although not fully closed, the latest changes to FiTs have at least closed the loophole door a little. I'm actually content in the UK taking part in global schemes which assist mankind and I'm pretty happy that we don't seem to have done the 'heavy lifting' on this front for a change.

I do note the use of 'largely' regarding the countries mentioned, especially so considering that in previous debates it has been shown that they actually do, maybe not at national levels, but at regional levels .... anyway, in return for my excellent cheap ballpoint pen which works upsidedown, the fastening on my coat, a comfortable pillow, affordable overseas air-travel and a system which guides us to wherever we want to drive - all courtesy of american technology subsidies, I'm pretty sure that I'm in a position to not expect them to do the heavy lifting on this front too ....

Regarding my start-point that pv is essential, I don't know where this idea comes from, if I've ever posted it I'd like to know where. I do believe that within the current world that electricity has become essential, but I classify pv as simply being part of a diverse supply source mix. I am happy to find that you actually recognise that the FiT in Germany has been a contributing factor in the reduction of global prices, however, that really does not portray the scale of the reduction which is directly attributable to that considerable contribution ....

On the issue of other electric production technologies, I'm sure that they will be developed in time, however, it's extremely unlikely that they would soon be at a stage of maturity where there is likelihood of reaching a cost where subsidy could be removed in the near future and therefore at the moment should be consigned to the same pile as where all of the empty hamster cages reside ...

The answer to the question posed on this thread can only really be answered with hindsight .... but with the serious reductions in equipment costs resulting from a kick-start approach to the industry combined with the recent history of increases in power costs it's more likely that the position of the 'This house believes that limited-scope FiTs are Good' side of the debate will be found to be fully vindicated, with this also likely to be seen sooner than later ...

HTH
Z

jamesingram

Cardew wrote: »

James,

£2/kWh? I was trying to illustrate the point that if you give huge subsidies for any form of electricity production, from thermoelectrics to hamsters spinning a wheel!! the production costs will fall.

I simply don't accept that UK FITs have been the driver in reducing costs. The countries(USA, China, India etc) that have largely not paid any subsidies for will pay the same prices as ourselves.

If you believe that your figures prove that Solar PV is viable without subsidies, then why the outcry that FIT has dropped to 21p/kWh? Especially when all the electricty, for which you will have been paid 21p/kWh need not be exported.

Incidentally how do you get a site to 'usefully' use the 85,000kWh?

Hi , Cardew
to answer your points
1. and 2.
I think Z has covered the false dichotomy here , you cant have it both way. Lets agree UK subsidies has played a roll in reducing costs to some degree here in the UK.

3. No outcry from me regarding tariff drop , I've said several times
I believe the FITs to have been poorly managed by HMG/DECC. it should have been reduced far sooner, perhap back with the >50kW drop . DECC have aloud a boom and with poor control may create a bust due to growing lack of confidence in HMGs longterm commitment to FITs as a result of this fiasco.
I've several friends who will not install solar because they dont believe HMG will keep to it's agreement to pay for the claimed garaunteed 25 year period. ( they personally look on it in terms of financial investment)

4. the 85,000 kWh was the total sum generated over the 25 year term in the example costing ( rough estimate ) .
So 3400kWh/y , maxing out, say 3.5kw at any single moment in time , during peak solar generation.
I imagine you can see how it would be easy to find sites to "use its full output as and when generated." with the figure above.

Hi Graham,

Yes I agree , we need the grid.
My example was for a site that "use its full output as and when generated." So the system would be an addition , not the soul provider of electrical energy.
The grid already exists , but yes requires paying for ,
as onsite mircogeneration is just part of the mix , imported energy, to cover use outside solar generation periods, would cover this, wouldn't they ?
It was just a rough estimate to show how FITs has played a part in
making PV potentially cost effective for the 100%
Ok 10.38p kWh is above commercial rates but lower than domestic rates so its heading there.
( I'm unsure of average commercial rates , 4p kwh ?)
"feed the £1bn subsidy to the technolofy which maximises the benefit"
I presume you'd prefer it directed toward nuclear developement.
cheers Jim

zeupater

jamesingram wrote: »

... The grid already exists , but yes requires paying for ....

Hi

The issue is that connection to the grid is already costing everyone ... isn't that effectively what the standing charge covers (or the amortised standing charge within the additional tier1 pricing) ..... so access charges to the grid for domestic scale connections currently exist ...

HTH
Z

Cardew

zeupater wrote: »

Hi

A false dichotomy seems to exist here, how can the following be reconciled ... "if you give huge subsidies for any form of electricity production, ... the production costs will fall" ... relative to ... "I simply don't accept that UK FITs have been the driver in reducing costs" ... ?

Z

Hi Z

You have taken the two quotes out of context to conclude it is a false dichotomy.

You are fully aware that I was talking about global demand which drives R & D and was speaking about a hypothetical new technology 'thermoelectrics to hamsters spinning a wheel!!'

If, say, the UK had given a subsidy(FIT) to just one single installation would you conclude that gesture had a role in reducing world prices?

I do note the use of 'largely' regarding the countries mentioned, especially so considering that in previous debates it has been shown that they actually do, maybe not at national levels, but at regional levels ....

Yes, I qualified my statement about the USA because there are some FIT schemes. With a huge fanfare on the local TV they announced a scheme near my place in Florida. Paying the grand sum of US$0.32/kWh (20 pence)for 20 years – this quote is interesting:

The order from the Gainesville City Commission does however set a total installation cap of 4 megawatts (MW) per year. The entire state(Florida) currently has approximately 2 MW of capacity installed.

As it is, the 4-MW cap is an order of magnitude greater than the timid limits in Wisconsin. And that's 4 MW per year. The weak Wisconsin tariffs don't compare at all,"

I don’t know the present situation, but it is tiny. My Brother and Cousin live in California(THE environmental State the in the USA) and they say they have never seen solar PV on a house – they have solar thermal for their pools.

The point being made is that with virtually zero subsidy in the USA, none in India and China?? and many other countries, the potential demand has driven down prices and those countries will get their solar systems at the same price as UK.

Yet the UK have committed many billions of pounds of our money over a period of 25 years to get solar at the same price as the USA and countries - who have paid virtually nothing.

zeupater

Cardew wrote: »

Hi Z

You have taken the two quotes out of context to conclude it is a false dichotomy.

You are fully aware that I was talking about global demand which drives R & D and was speaking about a hypothetical new technology 'thermoelectrics to hamsters spinning a wheel!!'

If, say, the UK had given a subsidy(FIT) to just one single installation would you conclude that gesture had a role in reducing world prices? .....

Hi

It may have been the intention, however, that's not the way it actually reads .....

Anyway, regarding the single installation proposition, the fact that more than one installation was completed in the UK since the introduction of FiTs means that a moot point is being described ... UK installations have passed 800MWp of installed capacity, that's probably somewhere around 4 million panels, yes small in global terms, but significant enough to warrant around two manufacturing plants the size of the Sharp plant in Wrexham ... so there's a little more competition and economy of scale to help push global prices downwards ....

I really cannot follow how the logic of the use of subsidy to create mass-market demand cannot be understood, of course, there could be no subsidy, where there would be extremely little demand due to high prices and, of course, lower levels of subsidy would not have created the stimulus required to create the market we see today with it's economies of scale and falling prices, conversely, any subsidy paid would likely be needed for new installations on an on-going basis for many years to come, likely costing far more than a shock stimulous approach - isn't this why many subsidised projects fail - underfunding over an extended timescale simply keeps prices high and suppliers happy until the subsidy is finally withdrawn ....

Similar to a stalled heart or newborn baby, the pv market needed a severe shock to stimulate life into it, after which it's simply a case of reducing the level of care over time until the baby, or patient, or market sector can stand without support ...

HTH
Z

Cardew

zeupater wrote: »

Hi

small in global terms, but significant enough to warrant around two manufacturing plants the size of the Sharp plant in Wrexham ... so there's a little more competition and economy of scale to help push global prices downwards ....

I really cannot follow how the logic of the use of subsidy to create mass-market demand cannot be understood, of course, there could be no subsidy, where there would be extremely little demand due to high prices and, of course, lower levels of subsidy would not have created the stimulus required to create the market we see today with it's economies of scale and falling prices, conversely, any subsidy paid would likely be needed for new installations on an on-going basis for many years to come, likely costing far more than a shock stimulous approach - isn't this why many subsidised projects fail - underfunding over an extended timescale simply keeps prices high and suppliers happy until the subsidy is finally withdrawn ....


Z

Hi Z,

Research into reducing the price of solar PV has been on-going for decades; I remember dozing through a lecture on the subject more years ago than I care to remember.

The introduction of this 2004 paper states
http://159.226.64.60/fckeditor/UserFiles/File/tyndc/reference/19938777866147.pdf

The modern era of photovoltaic device technology reached its Golden Jubilee year in 2003. Since the discovery of a p–n junction Si photovoltaic (PV) device reported in 1954, the science and technology of PV devices (solar cells) and systems have undergone revolutionary developments.

All the massive amount of research to reduce costs pre-dated any thought of subsidies. The use of PV in space was a huge driver.

However regardless of our views on ‘which came first – the chicken or the egg’, we are both surely in agreement that the UK’s contribution has done nothing to bring down world prices. You seem to feel that UK had some sort of moral obligation to pay huge subsidies to 1% of our population; I don’t!

That in essence is my objection to FITs – I believe the USA, India and China etc etc have the correct approach; wait until the technology makes solar financially viable for large scale solar farms and, if they wish, let householders install PV and pay them to export at the same price as the solar farms.

Although I appreciate the subject grates a little with you, a correction. Britain doesn’t ‘manufacture’ any solar panels but ‘assembles’ imported Far East technology for a Japanese firm who built a facility in Wrexham with the aid of regional grants.