Solar PV - Green but not ethical?

Cardew

George Monboit, the environmental guru, made this statement:

Those who hate environmentalism have spent years looking for the definitive example of a great green rip-off. Finally it arrives, and nobody notices. The government is about to shift £8.6bn from the poor to the middle classes. It expects a loss on this scheme of £8.2bn, or 95%. Yet the media is silent. The opposition urges only that the scam should be expanded.

On 1 April the government introduces its feed-in tariffs. These oblige electricity companies to pay people for the power they produce at home. The money will come from their customers in the form of higher bills. It would make sense, if we didn't know that the technologies the scheme will reward are comically nefficient..............


In other words, the government acknowledges that micro wind and solar PV in the UK are between seven and nine times less cost-effective than the alternatives.

If you read carefully, and try to understand, you might be able to deduce that he made that statement prior to the introduction of FIT in April 2010.

Also, and this might be a difficult concept for you to grasp, he was pointing out that by paying 41p/kWh + export at 3p/kWh the cost is some 7 to 9 times the cost of the alternatives; i.e. conventional generation by coal/gas/oil/nuclear etc.*

Now do you understand that point? I mean really understand.

Also in the context of this thread the point being made was that the scheme will 'shift £8.6bn from the poor to the middle classes.'

* Currently the price being paid for those installations is in excess of 45p/kWh so the 7 to 9 times is possibly a little on the low side. Even more if you consider that houses have no obligation to export any of the electricity they generate; so the effective cost of solar electricity exported under the FIT scheme could well exceed £1 per kWh!!

whasup

The real winners are the installers. A general building contactor I have worked fairly closely with on building projects over the years got into installing about 18 months ago. When the government reduced the fit to 20p the cost of equipment was driven down dramatically and my contractor friend is now making between £4k and 5k per install for about 3 days work. He's doing about three a week. Nice.

As for the subsidy. You can't compare it to subsidies for other forms of National energy production. Those are essential and benefit everybody, whereas PV is exclusive and only available to limited groups - such as the wealthy middle classes.

celerity

Cardew wrote: »

he was pointing out that by paying 41p/kWh + export at 3p/kWh the cost is some 7 to 9 times the cost of the alternatives; i.e. conventional generation by coal/gas/oil/nuclear etc.*

I and others would argue they are not true alternatives as they are not clean / green.

It's also (and this is just my opinion) disingenuous to use the highest subsidised rate for solar PV, which is already being phased out.
To be fair, you'd have to find the historically highest subsidised price of coal, nuclear etc (very difficult for the latter)

Without getting bogged down in a nitpicking debate, I would simply point out that the price of solar PV is coming down, and that is thanks to the FiT.

Solar and wind would have no chance in this country against established traditional energy technologies, so it's plainly obvious they need a temporary subsidy to give them a chance to become established in their own right.

By the way, please call me Adam

/\dam

Cardew

Adam,

The FIT scheme awarded 40p+ per kWh the houseowners and Rent a Roof companies and guaranteed that payment would be inflation linked and tax free for 25 years.

Approx 1% of the population benefit from that subsidy and all electricity consumers contribute by paying higher bills. So it is not disingenuous to state that the FIT scheme has benefited this 1%.

Any subsidy paid for the production of Nuclear/coal etc generation is paid by the taxpayer and everyone benefits by having electricity cheaper than it would have been without the subsidy.

That the price of solar PV is reducing is not disputed, but it cannot be attributed to the FIT scheme - the UK are not immune to prices on the world wide market and we are tiny players.

If a subsidy had to be paid, then it should have been to huge solar farms where electricity could have been produced for a fraction of the price; and all of that electricity exported.

Instead the FIT scheme has ensured that only 1% benefit by huge subsidies in place for 25 years and none of the electricity they produce needs to be be exported if it can be used in the house.

Martyn1981

Cardew wrote: »

George Monboit, the environmental guru, made this statement:

If you read carefully, and try to understand, you might be able to deduce that he made that statement prior to the introduction of FIT in April 2010.

Also, and this might be a difficult concept for you to grasp, he was pointing out that by paying 41p/kWh + export at 3p/kWh the cost is some 7 to 9 times the cost of the alternatives; i.e. conventional generation by coal/gas/oil/nuclear etc.*

Now do you understand that point? I mean really understand.

Also in the context of this thread the point being made was that the scheme will 'shift £8.6bn from the poor to the middle classes.'

* Currently the price being paid for those installations is in excess of 45p/kWh so the 7 to 9 times is possibly a little on the low side. Even more if you consider that houses have no obligation to export any of the electricity they generate; so the effective cost of solar electricity exported under the FIT scheme could well exceed £1 per kWh!!

Thanks, I think that's helped a little, and yes I was aware that the statement was made several years ago, that's why I've been 'pleading' with you to say something a little more up to date with some evidence or reference.

You describe him as an 'Environmental Guru', so does he class "coal/gas/oil/nuclear etc." as alternatives to PV? Nuclear is low carbon, so that's not so bad, but I don't think any are classed as green, environmental or renewable?

I also note that you are using 2 year old costs to equate PV, in a post 3/3/12 contribution. Perhaps now you will understand why I think 1 of your 3 regular posts needs updating ('Guru', '99%', 'PV farms').

The subsidy is designed to speed up the point at which PV viability can be reached, and as such costs are fluid.

Commenting on the FIT element and altering it in relation to % export is nothing more than a silly maths trick. The amount paid is per unit generated, so halving it and doubling the rate, makes no actual difference to the final values. Also, as you are aware, the FIT element does not relate to export it is the method by which the subsidy for installing PV is paid. The export element receives 3.2p per unit. You are also aware that this is micro-generation, and such schemes are designed and encouraged for end user use. In fact if 100% of generation was consumed on site, then the scheme could be judged more successful.

Lastly, yes, I appreciate that the UK FIT scheme is only a small part of world FITs, but individually they are all small schemes. You can't expect the UK to ignore it's contribution, we need to investigate and evaluate all possible technologies.

Lastly (part 2), any chance of something new, referenced of course?

Mart.

zeupater

Cardew wrote: »

..... That the price of solar PV is reducing is not disputed, but it cannot be attributed to the FIT scheme - the UK are not immune to prices on the world wide market and we are tiny players ....

Hi

We really do need to end this form of spin and achieve a basic level of understanding ....

As discussed many times on this forum FiT schemes have operated and are operating globally, therefore when considering the effect of FiT on global pv pricing then global FiTs must be considered.

It's pretty simple really ... pv technology has been around for decades without being able to substantially penetrate markets due to high unit costs ... pv incentives were introduced globally in the form of grants which resulted in the small installer base simply increasing prices and pocketing the grant funding themselves, therefore this form of subsidy failed and was withdrawn ... FiTs were introduced by numerous countries and the level of take-up increased and accelerated exponentially acting as a catalyst to increase production capacity resulting in economies of scale and competitive cost/price pressure, so the prices of equipment and installation costs fell, so the level of FiT subsidy was reduced to reflect the lower prices ......

Without any form of FiTs being introduced we probably wouldn't be having this discussion as pv would still be unaffordable, so how can anyone reasonably expect to be taken seriously if claiming that FiTs have had nothing to do with the recent reductions in prices .... if it's not the manufacturing catalyst resulting from FiTs what's the reasonable alternative ? ... I suggest that there simply isn't one, but I'd be open to see an attempt to suggest a more logical alternative if I've missed it ??

Regarding Monbiot's position ... I suggest that this is really seen as a view at a point in time .... a point before the cost of pv dropped by 2/3, a time before double digit percentage electricity price rises for three consecutive years, a time before the level of subsidy for new nuclear and conventional generation was factored in and of course before the level of subsidy was slashed in half .... I therefore suggest that the position quoted is so outdated that it no longer deserves consideration.

The effect on transferring wealth from the poor ? .... just consider that there is now the possibility of a growing level of competition for power supply, one which essentially has a fixed or falling cost of generation as we move forward .... can the large scale generators simply ignore this and continue to run an effective supply cartel with unit pricing based on carbon intensive fuels, regardless of generation technology ? ...

Regarding cartels - if there was real competition between generating sources then why does the cost of nuclear supply shadow the cost of gas, oil or coal powered supply so closely ?? .... could this possibly be due to the ownership of generating plant and the vertical structuring of the groups which often both operate the plant and supply the fuels ?

In summary, FiTs have successfully reduced prices for pv globally to an extent where the level of installation is likely to be influencing the level of monopoly which large scale generators historically operated in .... surely this must be seen as a positive development which should not be considered as being a transfer of wealth from the poor to the wealthy, but, through the moderation of energy price rises, ultimately a transfer of wealth from the large generators and their (wealthy) investors to everyone, including the poor.

HTH
Z

EricMears

If we're going to recycle old forecasts and claim them as gospel, perhaps someone could remind me what happened to the 'electricity too cheap to meter' prediction ?

It was of course nonsense at the time and I haven't actually spent the intervening years waiting for someone to come and take out my meter.

Similarly, the claim that the FIT scheme takes money from the poor and gives to the rich is completely untrue. The really poor - of which there are few in the UK but many millions worldwide - have no electricity at all so pay nothing for it. The UK's 'poorly off' will use very little electricity as they simply wouldn't be able to afford the luxury items which use large amounts of electricity. Only the well off will have electricity bills high enough to include large contributions towards the FIT scheme and I doubt many will be shedding a tear on their behalf.

Martyn1981

Simplifying this whole issue down to ‘moving money from the poor to the rich’ is ludicrous, and simply designed to be argumentative and disruptive. Anyone that can fully differentiate all the relevant components must be a genius. Just a few thoughts off the top of my head:

Not everyone paying electricity bills are poor, so we should only count the money that comes from ‘the poor’, how ‘the poor’ is determined, I’m not sure, below a particular percentage of average annual wage, fuel poverty, keeps changing, it really needs clarifying.

Only 35% of electricity is consumed by domestic properties, the other 65%, well how is that calculated. Are those costs swallowed, or passed on to end users of the goods and services? Who buys the goods and services, the rich or ‘the poor’, and in what percentage?

What if commercial sites start to install PV, and pass on electricity cost savings, who gets those?

Do you have to be rich to afford £8k to £16k? Won’t the majority of installs have been carried out by ‘the middle classes’, if we can work out who they are?

RaR schemes, I have no love for them, but if you want to account for the money correctly, then assume that some FITs will be returned through tax on profits, and income tax etc on employed staff. Plus the electricity savings element goes to another party altogether, possibly ‘the poor’?

LA and LHA projects, as above, but the retained ‘profits’ will be re-invested in housing to aid those that need help, possibly, again ‘the poor’?

Final payments of FITs will be far greater than the initial install costs, however, during a recession somewhere in excess of £2bn was moved from savings and investments into the economy, though most panels will have been imported.

FITs income will be distributed widely and hopefully spent, returning at least some of it into the food chain.

25 years is a long time, some people will move up and down the poor / middle / rich classification during that time period. How do we account for them?

These are just some quick thoughts, I’m sure there are many more. In trying to work out exactly how much of the money can be directly classed as moving from the poor and going to the rich – well, over to you guys and gals, because I haven’t got a clue, I only know that it’s a hell of a lot less than £8bn.

Lastly, it is 'the poor' that will suffer the most from the financial impact of climate change. Or to put it another way, 'the poor' who will benefit the most from the introduction of renewables and low carbon generation.

http://www.guardian.co.uk/environment/damian-carrington-blog/2012/jan/26/flooding-climate-change-heatwave-impact-risk?intcmp=122

Mart.

celerity

Can someone please provide the source that 1% of the population of the UK receive maximum FiT?

/\dam

Martyn1981

celerity wrote: »

Can someone please provide the source that 1% of the population of the UK receive maximum FiT?

/\dam

Adam, the number of installs is currently about 1% of all UK households (I'm working on a total of 24m households, but that might be wrong). So, if 70m people divided by 24m houses, then installs 'may' account for approx 2.9% of the population. I think? Edit: Nah, that can't be right, 1% of households, must by definition be 1% of population. People benefiting are approx 3 times households - that's better!

Edit: Oops, not all FITs goes to those installs, and not all at max rate, sorry.

Mart.