Solar Subsidy to be cut by 90% in January

Martyn1981

ed110220 wrote: »

You make it sound as though there some countries where the sun shines 24/7 It should also be pointed out that the amount of generation per kW of solar PV doesn't vary between the UK and sunnier climates by nearly as much as many assume. For example
Brighton gives 1160 kWh/kWp/year compared with Malaga's 1630 kWh. The extreme sunniest parts of Africa in the Sahara and Namib deserts produce about 2000 kWh.

This gives some counter-intuitive results. For example according to Deutsche Bank solar PV has reached grid parity in Germany but not yet in South Africa which has some of the best solar resources in the world, because grid electricity price differences are bigger than sunshine differences.

We can turn things around and say that given the world average PV module price fell from 72 US cents/W in 2013 to 62c/W in 2014, that Brighton is about two years behind Malaga in terms of amount of electricity that a dollar's worth of module will produce.

So much for simplistic and "common sense" assumptions!

Ed

This is a crucial point, and one that has been ignored or dismissed repeatedly on these threads.

Often people will point to the different levels of sunshine around the world, rather than (as you have) to actual generation potential, which is affected by panel temperatures.

Back in 2011, the PV critics were making comments along the line that PV is fine for Spain but not the UK. Spain has upto twice the generation (per panel) than the UK, but since 2011 the price of PV installs in the UK has halved, thus negating the economic argument - though of course that still means PV in Spain is even more attractive, and for those reasons has been almost completely blocked now by the electricity generators via a Royal decree.

The argument about relative solar levels is simply pointless, what matters is the overall economics. If PV generated twice as much, but cost 10 times more, then it wouldn't be viable anywhere, and if it cost twice as much, but generated 10 times more, it would be viable everywhere.

The point you made about relative electricity prices is also relevant to the rollout of grid storage. Germany now has a large number of domestic storage systems and is helping to drive down the cost.

I was recently chatting to a man from Queensland Australia about the potential for on-grid battery storage, as they have both good generation and relatively high leccy prices, but he pointed out that the leccy suppliers were already on top of this, and making it harder. He gave me these figures for leccy prices, which make for interesting reading:

Year - Fixed $/day - $/kWh
2013-14 - $0.502 - $0.2673
2014-15 - $0.834 - $0.2538
2015-16 - $1.067 - $0.2224

Over the last 3 years the price of leccy has been reduced by 17%, whilst the daily charge for grid connection has increased by 113%.

This move reduces the potential savings both from home generation, and home storage.

However, with an annual connection fee now of Aus$390 (~Aus$4k over a 10 year battery life, before leccy savings), it does improve the potential of off-grid living, slightly.

Mart.

EricMears

The UK Government was obliged (by EU rules & various international GW agreements) to demonstrate that it was trying to promote the provision of alternative methods of power generation.

Rather than increasing taxation and investing the proceeds in buying & installing the equipment on behalf of taxpayers, various political shades of government decided to encourage someone else to make the investment by offering various subsidies.

To the purists, all those subsidies were 'wrong' ! If the projects were worth investing in, then the 'best' plan would have been for the government to make the investment and reap the rewards. Persuading others to make such investments and topping up their profits from the schemes with subsidies from the public purse meant that the total project cost would have been greater than the 'more obvious route'.

But the decisions were made and we're stuck with them. There's little point in looking back and saying that this subsidy was worse than that subsidy.

There is some merit in the FIT scheme in that the subsidies go to 'ordinary' UK citizens rather than large corporations - maybe even foreign ones. And of course the generous provision to early adopters has been replaced by less generous terms as the price of the kit has reduced - helped no end by our & similar schemes in other counties.

Afraid I don't see any similar merits in (say) nuclear generation subsidies where half a century of development work has resulted in no reduction in capital costs of new schemes nor any likelihood of those subsidies being tapered off over the next few years.

Cardew

EricMears wrote: »

The UK Government was obliged (by EU rules & various international GW agreements) to demonstrate that it was trying to promote the provision of alternative methods of power generation.


agreed - but it wasn't mandatory to offer such stupidly high subsidies for solar. Or even any subsidy for solar - which has the huge drawback of being unreliable and doesn't generate at night.

Rather than increasing taxation and investing the proceeds in buying & installing the equipment on behalf of taxpayers, various political shades of government decided to encourage someone else to make the investment by offering various subsidies.


Agreed again! However by not having the subsidy provided from general taxation it means that the poor - for example living in an all-electric council flat - are paying a levy for the benefit of people considerable better off.

To the purists, all those subsidies were 'wrong' ! If the projects were worth investing in, then the 'best' plan would have been for the government to make the investment and reap the rewards. Persuading others to make such investments and topping up their profits from the schemes with subsidies from the public purse meant that the total project cost would have been greater than the 'more obvious route'.

But the decisions were made and we're stuck with them. There's little point in looking back and saying that this subsidy was worse than that subsidy.

There is some merit in the FIT scheme in that the subsidies go to 'ordinary' UK citizens rather than large corporations - maybe even foreign ones. And of course the generous provision to early adopters has been replaced by less generous terms as the price of the kit has reduced - helped no end by our & similar schemes in other counties.


Simply incorrect - huge amounts of FIT have been paid to Rent a Roof companies. Last time I looked just one single company(A Shade Greener) were boasting on their website that they had installed 58,000 systems. and will be collecting index linked FIT for the next 20 years for the really lucrative early installations.


The 'generous provision' to cover the investment and profit still doesn't make it a sensible scheme. It is ludicrous that people/RAR companies are being paid around 50p for every kWh they generate and will be for the next 20 years(inflation linked)

Afraid I don't see any similar merits in (say) nuclear generation subsidies where half a century of development work has resulted in no reduction in capital costs of new schemes nor any likelihood of those subsidies being tapered off over the next few years.

Comparison with Nuclear seems to be the standard defence of solar FIT proponents. Even conceding your reservations have merit, it doesn't do anything for the solar case - two wrongs etc! At least Nuclear generates 24/7 in all weather.


P.S.
Martyn don't bother to reply - at least if you expect me to read your posts. I have given up on the nonsense you post on policy matters. Just stick to advising individuals on the regulations and equipment - that is your strength.

Martyn1981

Cardew wrote: »

P.S.
Martyn don't bother to reply - at least if you expect me to read your posts. I have given up on the nonsense you post on policy matters. Just stick to advising individuals on the regulations and equipment - that is your strength.

Don't worry, I've long since given up any hope of you justifying your pro nuclear subsidy position, whilst also taking an anti FiT stance.

As I said many years ago, you don't seem to mind subsidies that go to the large generators (paid by all whether fuel levy or general taxation), just so long as they don't go to your neighbours.

I sincerely hope that you are aware that the incoming nuclear subsidy will also be paid by those all-electric council flat households via an energy levy. Especially since nuclear is a restricted industry under the state aid rules, so can no longer be directly subsidised via government funding ..... unlike green energy.

Mart.

gefnew

hi all
The quote that nuclear power stations run 24/7 seems to be without the knowledge that outages take place at regular intervals and can last a very long time resulting in a massive loss to the grid from one power station.


Where as the loss of a few micro generators will have a minor affect on the grid system.


This is where small generators are better at spreading the risk of generation, because as successive government`s have ignored that energy security is needed.


The need for a good mix of power generation sources is required.
But at a reasonable price.

EricMears

Cardew wrote: »

agreed - but it wasn't mandatory to offer such stupidly high subsidies for solar.

I'm sure the initial FIT rates were pitched at a rate which the government &/or their advisors decided would attract investors - and it worked. We'll never know how many of them would still have signed up if the rates were (say) 10% lower.

But it was made very clear that initial rates wouldn't last very long and that they would (indeed did) drop back to a lower level. Could you remind me when and by how much subsidies for e.g. nuclear generation dropped or are likely to do so ?

Cardew wrote: »

Agreed again! However by not having the subsidy provided from general taxation it means that the poor - for example living in an all-electric council flat - are paying a levy for the benefit of people considerable better off.

Quite true - but none of the other generation subsidies will be funded from general taxation in the future either. And whilst feeling the pain of these 'poor' people, let us not forget that they are in the main very small consumers of electricity. Spare a thought for the multi-millionaires living in huge mansions who pay far more of these 'green taxes'

Cardew wrote: »

Simply incorrect - huge amounts of FIT have been paid to Rent a Roof companies. Last time I looked just one single company(A Shade Greener) were boasting on their website that they had installed 58,000 systems. and will be collecting index linked FIT for the next 20 years for the really lucrative early installations.

Apart from the "Simply incorrect" (perhaps you could substitute "broadly true but not the whole picture" ?) we've found some common ground :T

RaR companies really shouldn't be allowed to make lots of small claims - they perhaps ought to be paid at the rate applicable to their total generation capacity. But even so, there are many FIT recipients apart from the RaR companies - possibly even many times more ?

But wearing my 'concerned for the poor' hat, I recognise that these 'grasping capitalists' might also be regarded as providing reduced electricity bills for those who find Solar Panels beyond their means.

theboylard

Fairly sure that if you receive FiT for more than 25 "domestic" installs, ie in the up to 4kWp bracket, you get paid at the commercial rate?

Martyn1981

theboylard wrote: »

Fairly sure that if you receive FiT for more than 25 "domestic" installs, ie in the up to 4kWp bracket, you get paid at the commercial rate?

Yes. The current 0-4kWp rate for individuals is 12.92p, or 5.94p with an EPC of less than D.

For the multiple installers, the rate is 11.63p, just slightly less than the current 4-10kWp and 10-50kWp rates which are now both 11.71p. The multiple install and non EPC D rates came in around Mch 2012.

Note, all rates drop by 3.5% on the 1/10/15.

Mart.

nigelpm

Wow!

I've been calling for a cut in the tariffs but this is dramatic. There must be some genuine concern that midday Sun is going to put us in a position of over generation.

This does however seem drastic.

zeupater

Hi

Pretty much looks and open & shut case here .... Seems that someone within government or DECC came up with the idea of CfDs without considering that it would be subject to the existing Levy Control Framework cap. Consequentially, the projected support between FY2015/16 and the end of the current parliament (FY2020/21) will push well beyond the cap, conveniently by almost exactly the same value as the projected FiT expenditure at the end of the period (2020/21) ....

DECC's under pressure to operate with the set budget, so panic sets in and the easy option solution is to hit the sector which is least likely to have an existing strong lobby ... that'll obviously not be the large RO and CfD components of the LCF then as it's dominated by large corporates !! ....

All this is doing is killing the future of demand side FiTs, mainly paid to individuals, in order to afford the CfDs which have been promised to supply side generators, however, this is a short-term holding policy which in no way brings the LCF overspend into control and will ultimately need to be revisited again, either by increasing the LCF cap to allow for increasing CfD expenditure, or by removing CfD expenditure from the LCF as evidenced by Figure 1(P13) in the consultation document ..
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/456630/FIT_Review_Con_Doc.pdf

Effectively, according to the consultation document itself, DECC would need to remove all existing FiT expenditure by FY2020/21 in order to conform with the LCF cap in that year, just to have expenditure break the cap again in the following year (conveniently excluded from the document), which isn't the proposal ... the problem of projected over-expenditure's not with FiTs , it's with a department of civil servants who are obviously 'unFiT' for purpose as they didn't see this one coming and have proposed such an ineffectual solution .... a figure showing a black line crossing an axis below a coloured area combined with some 'smoke & mirrors' and limiting the data window may just save someone's job for long enough to be promoted to a different department (as is the usual case in the public sector) but the over-expenditure will still be there because it is, and will continue to be, entirely due to the introduction of CfDs ...

HTH
Z