Solar Subsidy to be cut by 90% in January

hollie.weimeraner

I know it's the Daily Mail but it appears that there are going to be major changes to Solar subsidy in January including a major reduction in the FIT. If it's true I got in just in time.

Not sure what the impact will be as regards to the installation companies. May see some going out of business.

EricMears

hollie.weimeraner wrote: »

I know it's the Daily Mail but it appears that there are going to be major changes to Solar subsidy in January including a major reduction in the FIT. If it's true I got in just in time.

Not sure what the impact will be as regards to the installation companies. May see some going out of business.

Not necessarily. Assuming it's true (if Daily Mail journalists understand that concept ?), then it may well be that the FIT is drastically cut but at the same time the export payments are increased. With a couple more cuts to the price of Solar Panels (and Chinese economy trends are promising for that) that could make SPs a worthwhile investment without FIT - in which case it could be boom time for installers.

Or of course almost anything else might happen. Let's wait for an official announcement rather than rumours.

Martyn1981

Hiya Eric, as I've posted on the solar in the news thread, these aren't rumours, they are government proposals as set out in their consultation exercise.

They propose dropping the FiT for 0-10kWp installs to 1.63p, and then scaling it down to zero over 3 years. 6 years later they'll start paying nuclear about 4.5p/kWh for 35 years!

Regarding export payments, all I've found so far is this:

Consultation on a review of the Feed-in Tariffs scheme

50. We do not propose any change to export tariffs at this stage. However, we are consulting on options to ensure the long-term sustainability of the export tariff. The options are to rebase the export tariff to a lower level or introducing a more dynamic link to wholesale electricity prices for new FITs applicants.

I guess Amber Rudd was confused when she said:

Commenting on her focus in the new role, Rudd said: “I want to unleash a new solar revolution – we have a million people living under roofs with solar panels and that number needs to increase.”

Amber Rudd promises to ‘unleash a new solar revolution’

Mart.

System

Add to the above the possibility of 20% VAT on all new installations, and PV Solar for the home market is probably dead in the water unless the Govt has a change of mind. It will be interesting to see what happens to 'Rent a Roof' schemes and new initiatives such as the Edisun scheme which is being pushed heavily in the Midlands.

A more authoritative piece of journalism:

http://www.telegraph.co.uk/news/earth/energy/solarpower/11829471/Ministers-signal-the-end-of-Britains-solar-revolution.html

hollie.weimeraner

Well I'm sure MFW_ASAP will be pleased at least

https://forums.moneysavingexpert.com/discussion/5311870

Martyn1981

Hengus wrote: »

A It will be interesting to see what happens to 'Rent a Roof' schemes and new initiatives such as the Edisun scheme which is being pushed heavily in the Midlands.

I'd expect the RaR market to close instantly. Also the social housing programs, since the 1.63p rate probably won't cut it for them, especially as the leccy savings are seen by the residents.

I was wondering if the social housing schemes could just about cope with the 3.69p/kWh rate for 10-50kWp systems, as they tend to install on mass, but I expect the subsidy rate will be linked to the kWp installed against each individual MPAN, so will only be 1.63p as no individual domestic install is likely to exceed 10kWp.

Fingers crossed some of the community schemes (churches, schools, community halls etc) will still manage, but the price will have to fall a long way for 3.69p to work.

PV panel prices (which account for around 30-50% of install costs) are expected to fall another 50% over the next 10 years, and we are already paying 25% more in the EU due to the minimum price rules to protect us from China! Add in the hoped for massive reductions in battery storage prices, and you never know, we might see a come back in the 2020's, especially when the off-shore wind and nuclear subsidies start to push leccy prices up.

It's been a funny few months. On-shore wind and large scale PV were doing well, so they got cut, house building standards (after 8 years of investment) were 1 year away from the most stringent requirements, and those got cut, planning rules for fracking look like they are to be simplified, whilst those for on-shore wind are made harder, and the government is trying to block EU restrictions on the burning of the most polluting coal (which we produce). At least this time the government didn't campaign as the greenest ever.

Mart.

ed110220

Does anyone know what is being proposed for the export tariff? Where does 3.6p come from?

That's well below the wholesale price of electricity and less than half the 9.3p/kWh that Hinkley C will get. In this context isn't government talk of 'subsidy free' misleading.. Seems to imply the electricity companies will give you little and eventually nothing for the electricity you generate and then sell it at full price to your neighbours! Seems like a nice subsidy for the energy companies!

Cardew

Not before time if the proposals are adopted - albeit really six years too late.


Given that a desire to be Green, rather that make money, seems to be the main motive of many participants on this forum, I cannot see it having an effect on future private house installations; assuming the same lofty ideals are shared.

Martyn1981

ed110220 wrote: »

Does anyone know what is being proposed for the export tariff? Where does 3.6p come from?

That's well below the wholesale price of electricity and less than half the 9.3p/kWh that Hinkley C will get. In this context isn't government talk of 'subsidy free' misleading.. Seems to imply the electricity companies will give you little and eventually nothing for the electricity you generate and then sell it at full price to your neighbours! Seems like a nice subsidy for the energy companies!

Hiya Ed, where you referring to me with the 3.6p as I mentioned 3.69p?

The proposed new tariffs are 1.63p/kWh for 0-10kWp systems, and 3.69p/kWh for 10-50kWp systems. It then drops down to 2.64p/kWh for 50-250kWp systems.

The Hinkley C figure of 9.3p is part subsidy, part payment. Under the contract for difference (CfD) scheme, a guaranteed price is agreed. The generator then sells their leccy and receives a top up. If Hinkley sells at £50/MWh (roughly the average price of generated leccy) then it would receive a top up (subsidy) of £43. If at night demand was very low, and it got paid £10, then the top up would be £83. If at peak it got paid £100, then it would return £7. On average it'll probably get about £43/MWh.

However, as nuclear has a long build out, the CfD has also guaranteed inflationary rises up to the start (as well as through the 35yr subsidy period), so expect it to start generating around 2025 with a CfD of about £120.

The only other sector that seems reasonably safe at the moment is off-shore wind. The most recent CfD's issued were for £120, so about £70 subsidy, compared to the on-shore wind and PV CfD's of £80 (around £30 subsidy). Off-shore wind is generally owned and installed by the large energy companies. On-shore wind is often financed by smaller companies, and so has now been excluded from future CfD bids.

In short, all of the smaller generators, demand side generators and household generators will stop getting subsidies very soon, but the largest companies and foreign consortiums (nuclear) will continue to get the subsidies, which are typically, the highest subsidies, especially as PV FiTs were just about to go below them. [Edit: Are about to go below them ..... too soon to be funny? M.]

Mart.

Cardew

Many of the proponents of solar - at least on this thread - still haven't grasped the fact that as solar doesn't generate at night(and is unreliable during the day) it contributes nothing toward the UK's reliance on conventional/nuclear power generating stations to meet peak demand - which occurs on a winter evening.


With oil prices dramatically reduced - it now costs approx. 3p/kWh even for domestic users - and in the future plentiful supplies of gas from fracking a certainty, the whole picture on energy supplies is rapidly changing.


I would agree with Martyn that if there is some dramatic breakthrough in costs of battery storage, there could be scope for some resurgence in renewable energy.

ed110220

So does this mean only the feed in tariff is proposed to be cut, and the export tariff is seen as the unsubsidised cost of electricity? Or are they expecting anyone who still installs panels to give their spare electricity away for nothing to the grid so electricity companies can immediately sell it on at full price to neighbours?