MSE News: 'Why the solar subsidy cuts are so damaging'

Cardew

Those who read The Guardian will know that George Monbiot is the Environmental columnist and as 'Green' as anyone in the Press. His latest Blog http://www.guardian.co.uk/environment/georgemonbiot/2012/jan/13/green-deal contains this gem:

This is just one of the means by which money is being taken from the poor and given to the rich.


Two years ago, I warned that the feed-in tariff, a tax on energy bills which pays for people to produce their own low-carbon electricity, would be deeply regressive. To install solar electricity, for example, you would need your own roof plus £10,000 or more in cash. If you were lucky enough to possess both these assets, you would be making, at other people's expense, one of the most lucrative of all possible investments. It would give you a state-guaranteed return of 5-8%, fixed for 25 years, which was both index-linked (making a nominal return of 7-10%) and tax free.


Those who angrily denounced my analysis claimed that it could in fact be a progressive scheme, as communities of poorer people could be helped to cash in. They're still claiming it, even though the facts deserted them long ago. Today, Andrew Pendleton of Friends of the Earth insists in the Guardian that there are "countless" examples of community feed-in tariff schemes in the UK.


They're not countless; they've been counted by the energy regulator, Ofgem, in its annual report. There are 403 such schemes, as opposed to 29,265 domestic installations. The community projects have, on average, been larger than the domestic ones, but they still account for only 5% of the total capacity, while private home owners' schemes account for 82%.

(Thanks to Mike Kirwin for pointing me to the Ofgem report).


The feed-in tariff is just what Andrew Pendleton says it isn't: "a middle-class subsidy". No amount of cherry-picking by Friends of the Earth, which throws around figures without providing comparisons, will change that. This group, which is usually a force for good, needs to look long and hard at the social impact of the policies it supports.


The transfer of money from the poor to the middle classes and the rich engineered by the feed-in tariff will do almost nothing to reduce our dependency on fossil fuels. The government's 2050 carbon pathways calculator allows you to choose the most extreme of all possible solar options: using "all suitable roof and façade space" in the UK: a remarkable 9.5 square metres of solar panels per person.


Were we to fund a programme on this scale, it would be likely to bankrupt the United Kingdom, yet, by 2050, it would reduce the amount of energy provided by fossil fuels by a grand total of just 9%.

Offshore wind has the potential to reduce the total use of fossil fuels in the same period by 38%.


I take no pleasure in being vindicated by these figures. I simply feel sick at the thought that yet more opportunities have been lost, yet more money has been squandered and yet more injustice has been done. And it hasn't stopped, not least because of the misconceived lawsuit by Friends of the Earth, SolarCentury and HomeSun.

MalB_2

We have been told by the MCS and REAL not to sell at the 43.3p rate.We are to sell at the 21p rate. If the Government over turn the High Court ruling then any installation taking place after the 12th December (who have been sold at the FITS rate of 43.3p) will have the right to demand the difference of the 25 year revenue from the Installinf company.

That has completly killed the market as no one knows what they will get in return of their investment.

The Solar industry took the DECC to court over the way it handled the consultation period ( the deadline date before the end of the consultation period) not on the grounds that it wanted the FITS rate left at 43.3p. So please get facts right before postiing.

The High take up at the end of last year was not down to costs of panels prices rapidly reducing( As Mr Davey would have you believe) it was because of the deadline date for the 43.3p tariff being brought forward from 1st April 2012 to the 12 Dec 2012. People were simply jumping on board to get the higher rate. Since then I have layed 10 men off due to the uncertainty deue to the Government fighting 2 High Court appeals (losing both) and now taking it to the Supreme court when all 4 judges have told them not to.

MalB_2

The FEED-IN-TARIFF pot is paid for by the BIG 6. Have you seen on your bill a section that says FEED IN TARIFF CHARGES? Pressure has been put on the government by the big 6 to keep the pot low as its eats into their profits. They were told by the Government to pay this surcharge. They have turned it around by saying they have had to pass it on to us through our bills. Wake up!!!

MalB_2

The feed in tariff pot is paid for by the big 6. A surcharge was placed on them by the Government. It comes straight from their profit pot. They have spun it so people like you think that it's them thats paying for it. All because they pay and don't like it.

Cardew

MalB wrote: »

The feed in tariff pot is paid for by the big 6. A surcharge was placed on them by the Government. It comes straight from their profit pot. They have spun it so people like you think that it's them thats paying for it. All because they pay and don't like it.

Obviously you are in the solar industry, which explains why you can’t get your facts correct.

Talk of ‘Big 6’ – ‘out of their profits’ – ‘don’t like it’ all emotive words worthy of a Sun leader writer and designed to mis-inform.

Every electricity consumer and every electricity company(not just the Big 6)pays toward FITs as companies pay a levy according to their market share, not how much they pay out.

Small companies don’t pay out FITs, but still contribute to the ‘kitty’. The levelisation process determine that each company pays the same share regardless of what FIT they pay.

If you really want to understand the process instead of spreading disinformation read this UK Government website

http://www.decc.gov.uk/en/content/cms/meeting_energy/renewable_ener/feedin_tariff/implementation/implementation.aspx

In particular this quote:

Who pays for FITs?
The FITs Order provides for the total cost of the FITs scheme to be shared among electricity suppliers according to their market share (the “levelisation” process). We expect that the costs are ultimately passed on the electricity consumers. As well as the payments actually made, these costs include “qualifying FITs costs” (these are the reasonable costs incurred by a supplier as a result of the FIT scheme, excluding FIT payments).

The determinations required for administration of Feed-in Tariffs (FITs) in accordance with articles 14 and 28 of the FITs Order for FITs Year 2 (1 April 2011 – 31 March 2012) were made and signed by the Secretary of State on 28 February 2011. They can be found below:

Determinations by the Secretary of State for Energy and Climate Change for FITs Year 2 [filetype:pdf filesize: 326.58Kb]

John_Pierpoint

As posted elsewhere, the debate and the facts move on:

Martyn1981 wrote: »

So, new(er) proposals

http://www.decc.gov.uk/en/content/cms/news/pn12_010/pn12_010.aspx

Thankfully changed EPC requirement to D (from C)

Interesting article, giving possible results:

http://www.businessgreen.com/bg/news/2145090/government-angers-industry-slash-solar-incentives

Like the sound of the 10% reduction each 6 months, not a million miles away from my guess that rates may be dropped 2p every 6 months - though somehow I doubt anyone is listening to me!!!

22GW installed by 2020, that sounds hard, but if commerce/industry get on board, who knows, should be interesting to say the least.

Mart.

Cardew

MalB wrote: »

The Solar industry took the DECC to court over the way it handled the consultation period ( the deadline date before the end of the consultation period) not on the grounds that it wanted the FITS rate left at 43.3p. So please get facts right before postiing.

The High take up at the end of last year was not down to costs of panels prices rapidly reducing( As Mr Davey would have you believe) it was because of the deadline date for the 43.3p tariff being brought forward from 1st April 2012 to the 12 Dec 2012. People were simply jumping on board to get the higher rate. Since then I have layed 10 men off due to the uncertainty deue to the Government fighting 2 High Court appeals (losing both) and now taking it to the Supreme court when all 4 judges have told them not to.

Two solar companies(one a rent a roof company) and the ever stupid Friends of the Earth, did indeed take the Government to court on the grounds that they had brought forward the date of the FIT reduction so it took effect in a consultation period.

The whole purpose of the plaintiffs was, and is, to get that decision reversed so the solar industry could feed on the rich pickings of the high rate FIT for a few more months.

As posted in another thread, the solar PV industry, largely didn't exist 2 years ago but 'exploded' to take advantage of the easy money available from the subsidies that were available. How long were the 10 men you layed(sic) off working for you 2 years ago? Did your firm exist 2 years ago?

I am not a fan of this Government but at least they acted to stop the stupidity of the FIT system that entails huge subsidies paid by all electricity consumers to 1% of the population.

grahamc2003

Cardew wrote: »

As posted in another thread, the solar PV industry, largely didn't exist 2 years ago but 'exploded' to take advantage of the easy money available from the subsidies that were available. How long were the 10 men you layed(sic) off working for you 2 years ago? Did your firm exist 2 years ago?

.

Just shows the effectiveness of the 'kickstarting' of a UK solar industry. Jobs are created while generous subsidies are being paid and (obviously) as soon as they are stopped, or even reduced, then the vast majority of jobs simply disappear with them. In the case of solar power, the jobs are lost, yet the subsidy just rolls on for those with it, for another 24 or 25 years.

I'm all for subsidising to 'kickstart' viable businesses which can eventually be competitive in the world market and hence repay the taxpayer in the form of future taxes or indeed give the UK a global lead in a technology (ha! think we've seen the last of that in the UK) and genuine reduced unemployement, but solar doesn't fit that category in almolst every respect imv.

Anyhow, I ordered a system 2 days ago, scaffolding should go up today, and installation and completion on Monday. I don't think there's massive demand at the moment as some predicted - people like certainty and generally aren't prepared to gamble.

[Deleted User]

grahamc2003 wrote: »

Just shows the effectiveness of the 'kickstarting' of a UK solar industry. Jobs are created while generous subsidies are being paid and (obviously) as soon as they are stopped, or even reduced, then the vast majority of jobs simply disappear with them. In the case of solar power, the jobs are lost, yet the subsidy just rolls on for those with it, for another 24 or 25 years.

I'm all for subsidising to 'kickstart' viable businesses which can eventually be competitive in the world market and hence repay the taxpayer in the form of future taxes or indeed give the UK a global lead in a technology (ha! think we've seen the last of that in the UK) and genuine reduced unemployement, but solar doesn't fit that category in almolst every respect imv.

Anyhow, I ordered a system 2 days ago, scaffolding should go up today, and installation and completion on Monday. I don't think there's massive demand at the moment as some predicted - people like certainty and generally aren't prepared to gamble.

Good stuff, keep us posted

giannous

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