FITs - from July.

rogerblack

The government is consulting on reducing FITs further, for installations in July.

http://www.decc.gov.uk/en/content/cms/consultations/fits_rev_ph2a/fits_rev_ph2a.aspx
Their initial intention is to determine the level of the cuts based on the installed amounts in March and April - for installations that did not make the March 3 cut-off.

The tariff as of today is 21p/kWh.
The various options are:
Installed wattage Mar/Apr:
Over 200MW 13.6p
In between 15.7p
Under 150MW 16.5p

Looking at the most current figures for installed panels per week, it looks likely that the figure for March is about 40MW, with the trend rising somewhat.

If the trend continues at 10MW/week - then that would total around 90MW at the end of the period, leading to 16.5p tariffs come July.

But.
I note that 21p can still, in well situated areas, with panels fitted for 7K, return over 800 a year.

This means it's still somewhat questionable if the demand won't rise enough to trigger the 15.7, or indeed 13.6p tariff.

It will only have escaped the least observant that the latter tariff is about the same price as we are paying for electricity.

There is hence little reason for the expensive MCS/FIT infrastructure.
It'd be a whole heap simpler if net-metering was allowed, the new crop of smart meters taught about solar, and most of the regulations were scrapped. (MCS would remain as a certification body)

Martyn1981

rogerblack wrote: »

The government is consulting on reducing FITs further, for installations in July.

There is hence little reason for the expensive MCS/FIT infrastructure.
It'd be a whole heap simpler if net-metering was allowed, the new crop of smart meters taught about solar, and most of the regulations were scrapped. (MCS would remain as a certification body)

Roger, I'm a big fan of net metering, especially as the potential savings would be much greater given the opportunity to eat into tier 1 prices as well as lower tier 2.

I read that low, medium and high electricity consumption, was approx 2,100 , 3,600 and 5,100 units respectively (though they seem a little low to me). So a 'decent' system generating approx 3,500+ units could eliminate both low, and high priced units from the bill.

At £7k the returns would probably work, and if install prices drop towards £5k as electricity prices rise higher, then .......

One thing I've thought of though, is that whilst such a system would I'm sure appear fairer, and more acceptable to the public, it would still be subsidised to a degree. PV'ers would be benefitting from the service supplied by the grid, and energy companies, but not actually be paying towards it's admin, maintenance, upgrading & upkeep.

Mart.

jimjames

Although it appears from first glance at the numbers that the proposed FIT rates from July are almost the same as the current tariffs for electricity from suppliers in reality they are still not that close.

With the FIT you get paid for ALL electricity generated at say 21p. You also get the export payment and use of any electricity generated for free.

So assuming a generation of 3000kWh pa, electricity cost of 12p per kWh, the maximum net benefit to you could be 3000x0.21 + 1500*.032 + 3000*0.12 which is a net 34.6p for every kWh you generate assuming all electricity generated is used in the home (hence use of the word Maximum)

This is still substantially above the 12p cost of electricity from your supplier.

Numbnuts

The ROI of a 4 kWp sold for 7k @ 21p tariff is 14%-15%.

I think prices may fall after july but not much!

rogerblack

On the most recent statistics, the amount installed so far in March and April is about 60MW - with massive spikes in the couple of weeks before April 1.
It's now calmed _way_ down, with the installs at a level that is the lowest for the whole period of the FIT scheme - apart from the first week of Jan 2011/12.

As I understand it, there is no upcoming legislative change to FITs to drive another massive spike before the end of April.

Another notable fact is that in the last week, there was one installation over 4kW in the whole country.
The peak for larger installs was around 2000/week!
For it to hit a total installed extra capacity of even the lower threshold of 150MW in March and April seems now extremely unlikely.

I expect the last two weeks of Aprils installs to come in at under 10MW, bringing the total to about 75MW - half the amount required to trigger the 15.7p, not the 16.5p tariff.

rogerblack

The total turns out to have come in at 77 megawatts in total for March and April.
This is way under the trigger limit for any but the lowest band, so from July, the tariff will be 16.5p/kWh.

It's unfortunate that the government is reducing the tariff in large jumps, not smoothly week-by-week.
This means that it's hard for solar companies to maintain a constant workload.

The current scheme where you get 'cliffs' - where everyone interested rushes to get installed before the next deadline is unhelpful to everyone, and raises costs of PV installs.
To somewhat simplify things - a PV company might need under a quarter of the staff if it was a constant workload.
These staff would be better trained, able to complete installs faster, and reduce costs by having a smoother flow of equipment installs and labour.

zeupater

rogerblack wrote: »

.... It's unfortunate that the government is reducing the tariff in large jumps, not smoothly week-by-week.
This means that it's hard for solar companies to maintain a constant workload.

The current scheme where you get 'cliffs' - where everyone interested rushes to get installed before the next deadline is unhelpful to everyone, and raises costs of PV installs.
To somewhat simplify things - a PV company might need under a quarter of the staff if it was a constant workload.
These staff would be better trained, able to complete installs faster, and reduce costs by having a smoother flow of equipment installs and labour.

Hi

It might be causing problems for installers to maintain a steady workload, however to the customer there is a definate benefit in that the installers are effectively forced to compete for business in an agressive manner when the deadlines approach which has two associated benefits .... firstly, prices seem to remain pretty steady until the deadline 'encourages' installer margins downwards and then there's all of the industry publicity that the deadline and the price reductions generate.

In my experience a consistant workload and lack of effective competition simply encourages complacency and therefore stifles efficiency - a position which, although good for the installer's turnover, certainly doesn't reflect the best interests of the customer.

HTH
Z

rogerblack

zeupater wrote: »

In my experience a consistant workload and lack of effective competition simply encourages complacency and therefore stifles efficiency - a position which, although good for the installer's turnover, certainly doesn't reflect the best interests of the customer.

To a degree - yes.

But with a truly unstable workload - people are reluctant to invest in lowering their costs.

If your average install rate is 20/week - you can do it a lot cheaper if it's 20 a week, and not 5/week for 18 weeks, and 150/week for the other two.

If the workload is too unstable, then people can't keep on trained staff, and must rely on (comparatively) poorly trained staff, who are slower, you need more of, ...

rogerblack

Installations are bouncing along at the bottom of the graph at the moment.
The 150MW amount that was the lowest threshold for installations after the beginning of march hasn't even been hit yet, even with another month and a half - and it's looking unlikely it will by the end of this month.

It would be very interesting if there were figures for EPCs applied for, that lead to upgrading not being practical to hit band D.