Solar PV - Green but not ethical?

grahamc2003

Martyn1981 wrote: »

But you're making the same mistake here that Cardew does. The export rate is 3.2p, not 45p, or 78p or any other number.

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Martyn, Thank you, I always thought the export rate was 93.3p/kWh. Could you confirm that it is paid on 72.5% of generation as I currently understand it.

Ps, I suggest you re read my reply to you earlier about completely missing any (simple) points being made, whether or not you might agree or disagree with them should you understand them.

pps, FIT stands for Feed In Tariff, and not Strictly Come Dancing.

EricMears

Perhaps we could consider an alternative calculation of what happens to exported solar electricity ?

The 45.4p is a clear subsidy and nothing to do with the REC that are acting as the government's agent in paying it. It should therefore be ignored in this calculation.

It's a widely held view that the typical PV owner exports around 75% of generation. However, RECs choose not to measure it but assume that they're getting 50% for which they pay 3.2ppu. If this typical PV owner generates 20 units in a particular day, he'll probably export 15 units but be paid 32p (for a nominal 10 of them).

The REC has therefore paid a little over 2p per unit (2.13333333 to be precise but it's only a rough estimate) for the surplus generation. That electricity doesn't travel back to the power station and redistributed so doesn't suffer transformer losses or cable losses when sold to their other consumers in the same street for around 12ppu. nor does the National Grid Company get a chance to meter it and apply network charges.

I make that something like a 500% profit margin !

Martyn1981

grahamc2003 wrote: »

OMG.

Martyn, Thank you, I always thought the export rate was 93.3p/kWh. Could you confirm that it is paid on 72.5% of generation as I currently understand it.

Ps, I suggest you re read my reply to you earlier about completely missing any (simple) points being made, whether or not you might agree or disagree with them should you understand them.

pps, FIT stands for Feed In Tariff, and not Strictly Come Dancing.

Again Graham, there’s no need to be abusive. You stated that electricity companies / customers were paying 78p for exported PV electricity, when the actual figure is 3.2p. I tried to help you by explaining the breakdown of the FITs into its two components, the generation payment, and the export payment. I was trying to avoid any accidental mis-representation of the scheme. A simple thanks would have sufficed.

Now, let’s have another look at your viability maths. You claim that the less that is exported, the more the energy costs, and therefore the further from viability such an install would be. Your maths stated that at 100% export the price of each unit is approx. 47p, at 60% export that becomes 78p (47 / 0.6 = 78). 78p is way above wholesale electricity prices, so the scheme is unviable. Your figure 1,800% of wholesale 4p price.

So let’s run your maths and mine. Same situation, of an ideal install (being the first obviously to approach viability). 4kWp install, South West England, South facing roof, generating 4,000kWh’s pa. The house has very high and constant consumption during the day, and therefore consumes 90% of generation. Current rates 21p and 3.2p, or combined 22.6p (at deemed 50% export).

G Maths: So replacing 47p / 60% with 22.6p / 10% = 226p per unit exported, or when compared to wholesale prices of 4p is 5,650%. So entirely unviable, worse even than your earlier example, and apparently moving further from viability all the time.

M Maths: 3,600 units saved @ approx. 11p/kWh = £396. Plus 400 units (accurately sold) @ 3.2p/kWh = £12.80. Total £408.80.
Installed prices now appear to below £8k, and some references to sub £7k, but let’s go for the higher figure.
£408.8 / £8,000 = 5.11%

Now 5.1% is not great, though reasonable when compared to leaving money untouched in a savings account, especially for higher rate tax payers. Also that is only the situation today. @ £7k, the savings are 5.84%. You must also consider that energy prices are rising far faster than inflation and investment returns. A future £5k install with 12p electricity gives 8.9%.

So do we use G maths, or M maths to better ascertain how much closer to viability we are. Next few years possibly given the right household circumstances?

Mart.

Ben84

EricMears wrote: »

The super-rich use a lot of electricity and hence pay a large sum as a levy; admittedly, the unit cost of electricity tends to be cheaper for large consumers but it's really not a huge discount they're enjoying.

The very poor use much less electricity so are asked to pay very little as a levy.

That's not the full picture. It's all very well to think "I'm not rich!" and look at the people with heated pony stables and four cars, but really the genuinely low income households in the UK are simply looking at middle class suburbia as the wealthy. The people who can afford to put the heating on whenever they feel like it, or spend thousands on solar panels.

It's between these two groups that the big divide exists too. Lower income houses tend to be the least insulated, have the oldest boilers, windows and least energy efficient appliances. To live at the same lifestyle standard as a higher income household with a more efficient house, low income households would typically have to consume a lot more energy. So, with the relative energy input vs useful energy output being typically very imbalanced already against low income households, the FIT costs them more in relative terms, possibly in some cases in total costs too.

The suggestion it doesn't affect them so greatly because they already buy less energy isn't well reasoned either. Honestly, if gas costs went up 20% tomorrow many people would continue using it about the same as ever. We would all complain, but there are the households who would make a vague effort at saving or find the money for more insulation and the households that would not have the money for more insulation and just be even colder than before. I know a lot of people, and I was once one of them, would just have to take the extra cost out of their actual gas usage to keep their fuel costs the same and somehow live with the reduction in gas available to use. Getting more money out the wealthier is a cold comfort when the poor feel it so much more.

Also, suggesting extra costs on things low income households can't afford much of anyway doesn't matter because they can't afford them misses a huge point - they would like to afford them and you've just moved them even further out of reach, making the poverty trap that bit deeper. I got out some years ago, but I look around at the cost of everything and availability of good jobs now and I feel that it's harder to do than it was then, and even then it wasn't an easy thing to do. I know it all just looks like numbers on paper, a few pound a year per household, but every little thing adds up when everything seems to be a few pounds more. it seems miserly to argue over a few pounds, but I know it's a lot of money to some people. The same money going in to this could be spent on insulation and energy saving measures for low income households, saving them money and saving carbon - which is allegedly the benefit everyone wants anyway. But it's just pushing the imbalance even more against low income households and charging them relatively more to do it!

Martyn1981

Ben, I agree with what you have said, and I hope I don’t appear to be saying ‘stuff the poor’, but at some point we have to accept that recently energy prices have naturally risen horrifically fast. Any additional costs due to renewables are of course painful, and rub salt into the wounds, but we have to do something to increase the range of energy production we have in order to help level out future prices, because things are not going to get better.

As Seagull says, those at the bottom of the ladder may benefit from additional support, whilst the next tier up – employed, but low income – potentially are the ones hit hardest. Other elements of the Green Tariff are there to help, through subsidised insulation etc. I remember saving up to buy energy bulbs in the 90’s, and spending £90 on loft insulation, which would now cost £20 (subsidised). It may even be free. Those ‘investments’ made sense to me.

Yes, the poorer are hit proportionately harder by energy prices, much harder in fact, and it’s a shame that so much of this expense is unavoidable. But the argument of ‘polluter pays’ has been touted for 30+ years and at some point we all have to accept responsibility for what we use.

I’m not sure what the current position is, but the EPA (USA) were considering classing CO2 as a pollutant, on the basis that it causes environmental damage and additional costs external to the producer and consumer.

Just an idea for shifting some costs, and raising consumption awareness. I was wondering if the level of VAT (currently 5%) could be varied to reflect consumption. Low or zero for low consumption, and rising steadily as consumption rises. This would encourage awareness, adoption of efficiency measures and appliances etc. I would hope that the biggest effect would be on commerce and industry, encouraging energy savings.

This would fly in the face of current energy pricing where the average cost actually goes down, the more you use. But maybe we should start to look upon energy as a valued resource and apply escalating price rationing. The VAT receipts would then be ring-fenced for energy investment, such as insulation and renewables. In essence, I’m trying to imagine the equivalent of the VED (that rises in relation to potential consumption), this would rise with actual consumption.

I appreciate that in ‘the real world’ this would probably be unworkable, especially in trying to protect lower income households, with an unavoidable reliance on electricity, perhaps due to heating, with no mains gas availability. But something needs to be done.

In short, the billing cost of our energy is high, but the real (and future) cost is even higher, and at some point we had to bite the bullet and start spending the money to address this.

Mart.