Solar Subsidy to be cut by 90% in January

Cardew

Hi Z,
It is a clear admission that they got it wrong on Solar FIT as this extract shows:

We expect to breach the limits of the Levy Control Framework (LCF), the amount of money agreed within Government which can be added to consumer bills to pay for low-carbon electricity generation, and deploy more small-scale renewables than we envisioned when the scheme started.


We are therefore proposing measures to place policy costs on bills on a sustainable footing, improve bill payer value for money, and limit the effects on consumers who ultimately pay for renewable energy subsidies.

The stupidity of allowing early adopters to be now getting around 50p for every kWh generated, with that inflation linked for the next 20 years - and without a requirement to export a single kWh - has come home to roost.

Cardew

One further ramification if the proposals are adopted will be the demise of the [STRIKE]double glazing[/STRIKE] solar installation firms who will move on to new 'get rich quick' schemes.

In the heyday of solar thermal, installation firms regularly went 'bankrupt' and thus were not liable for repairs/warranty. They then started up as a new firm, often with the same premises and employees. Read up Trading Standards reports -particularly around the Bournemouth/Poole area

Let us see if that situation will occur with Solar PV.

Sterlingtimes

The reduced and still reducing price of imported fossil fuels may have some bearing on the consultation. The renewables premium surely becomes more difficult to justify as classic energy prices hit the bottom of the price/time curve.

zeupater

Cardew wrote: »

Hi Z,
It is a clear admission that they got it wrong on Solar FIT as this extract shows:

The stupidity of allowing early adopters to be now getting around 50p for every kWh generated, with that inflation linked for the next 20 years - and without a requirement to export a single kWh - has come home to roost.

Hi

I don't agree with the referenced conclusions.

The predicted total expenditure passing the LCF cap threshold isn't due to a significant increase in the payment of demand side FiTs between now and the end of the current parliament (FY2020/21), it's the huge increase in supply side CfD payments. By the end of the period in question FiTs will have been in operation for a decade, yet will have been well surpassed by a rapid increase in CfD payments between 2016 & 2020, a period in which, due to already rapidly falling FiT tariffs, the proportion of the LCF attributed to FiTs is predicted to fall substantially .... as such, anyone portraying a view that the extract is taken to support 'a clear admission' of the scheme initially being 'wrong' is at worst a little deluded, or at best grossly mischievous ....

Regarding the 'early adopters' and 'coming home to roost', well, to anyone already accepted into the scheme it makes no difference as the consultation covers support for future installations. It's also relevant to understand that the proportion of total installations which would be considered as being 'early adopters' has been rapidly diluted and will continue to be as the tariff reduces, a conclusion which I would expect anyone who has a basic understanding of the history of FiTs would be fully aware. As for the requirement to export, I really don't see why this is seen as a point of contention seeing that a number of individuals have explained many times how demand side reduction has a direct equivalence to a supply side increase and that although the vast majority of pv owners are paid a FiT scheme standardised deemed 50% of total generation to compensate for export, the level of actual export is more likely ~75% - even allowing for proportional diversion the level of export is likely to be much closer to 50% than zero.

HTH
Z

zeupater

Sterlingtimes wrote: »

The reduced and still reducing price of imported fossil fuels may have some bearing on the consultation. The renewables premium surely becomes more difficult to justify as classic energy prices hit the bottom of the price/time curve.

Hi

In theory that would be the case and I'm sure that that's what DECC would want to portray, but considering that there's evidence of total disengagement of consumer energy supply prices and commodity market pricing then there's a really strong case to question the relevance .... gas prices are pretty much aligned to oil which has recently been traded at around 1/3 of it's peak but that's not been reflected in consumer unit pricing (yet!).

It would be just as easy to make a valid argument that the threat of the emergence of renewables as a rapidly growing global energy source has caused the carbon fuel suppliers to revisit their strategies and 'apply the brakes' to the rate of production and price increases then build a case for the LCF cap to be increased in order to increase competition further without having a long-term effect on increasing consumer energy prices. DECC themselves made an assessment of the overall impact of energy and climate change policies on UK energy pricing in report ..
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/172923/130326_-_Price_and_Bill_Impacts_Report_Final.pdf
.. and concluded that the effect on consumer prices by 2020 would be a saving of 11%. If there has been a significant change in the position which would necessitate a serious policy revision then the above impact report would logically need to be revisited prior to any consultation related to components of the LCF due to the close relationship between the LCF budget and any consumer benefits - considering that this is not the case really brings the reason for the consultation as being on a cost/benefit basis into question ...

HTH
Z

Cardew

zeupater wrote: »

Hi


, anyone portraying a view that the extract is taken to support 'a clear admission' of the scheme initially being 'wrong' is at worst a little deluded, or at best grossly mischievous ....

Regarding the 'early adopters' and 'coming home to roost', well, to anyone already accepted into the scheme it makes no difference as the consultation covers support for future installations.

HTH
Z

Firstly far from being deluded or mischievous, these were the reservations - or indeed condemnation of the FIT system - expressed before the scheme was introduced. There is no need to quote George Monboit again, but he has been proved correct - in spades!


Of course the early adopters are protected, and so they should be; they took advantage of a stupid system of subsidies. However the available money for subsidies has been used up and it is time to cry stop to this nonsensical scheme.


What I cannot understand is why sensible posters on other threads, like yourself, feel you have to defend an indefensible FIT scheme simply because you have installed solar.


You and others clutch desperately at 'Demand side reduction' whilst totally ignoring the fact that solar generation is completely intermittent/unreliable - correction! it can be relied upon 100% not to generate at night.


It doesn't reduce the UK's need to have conventional generating capacity to meet peak demand by a single kWh.


Other justifications are that Nuclear receives subsidies(true but is generates 24/7.) and coal/USA/India/China/Australia.


If people want solar panels on their roof, fine. They can be smug that they have reduced their demand on the grid, but don't expect the rest of us to pay for future installations.


Without question the FIT system was a mistake, and let us praise the Government if they realise their error and put an end to the nonsense.

zeupater

Cardew wrote: »

Firstly far from being deluded or mischievous, these were the reservations - or indeed condemnation of the FIT system - expressed before the scheme was introduced. There is no need to quote George Monboit again, but he has been proved correct - in spades!

Of course the early adopters are protected, and so they should be; they took advantage of a stupid system of subsidies. However the available money for subsidies has been used up and it is time to cry stop to this nonsensical scheme.

What I cannot understand is why sensible posters on other threads, like yourself, feel you have to defend an indefensible FIT scheme simply because you have installed solar.

You and others clutch desperately at 'Demand side reduction' whilst totally ignoring the fact that solar generation is completely intermittent/unreliable - correction! it can be relied upon 100% not to generate at night.

It doesn't reduce the UK's need to have conventional generating capacity to meet peak demand by a single kWh.

Other justifications are that Nuclear receives subsidies(true but is generates 24/7.) and coal/USA/India/China/Australia.

If people want solar panels on their roof, fine. They can be smug that they have reduced their demand on the grid, but don't expect the rest of us to pay for future installations.

Without question the FIT system was a mistake, and let us praise the Government if they realise their error and put an end to the nonsense.

Hi

In Order ..

In no way has George Monbiot been proved correct by the release of this consultation ... FiTs were always planned to be reduced as the industry matured. If anything, the subject at hand would suggest that he was wrong and that the scheme operated exactly as envisaged, just achieving it's targets a lot sooner than expected ... suggesting otherwise would be a little disingenuous.

Available money for subsidies has been used up ?? ... well, have a look at the consultation document to see where the subsidy LCF cap is being compromised - it's certainly not from FiTs, so what's the offending component ? ... possibly the introduction of CfDs ?. Moving available budget from a demand side technology with rapidly decreasing capital costs to others on the supply side where capital price movements are relatively stagnated, which suits the interests of the corporate operators, makes little sense - a better option would be to chase prices down until pv becomes fully self supporting, which would likely be within a few years. As it is, a premature withdrawal of support along the proposed lines could irrevocably damage the consumer pv industry to an extent where ongoing support and replacement becomes a future issue.

I would support the FiT scheme even if I had no pv, just as I support other policies which have enormous benefits elsewhere ... indefensible?, well that's really odd - a scheme which has achieved the majority of it's goals would be classified by most to be a success and therefore sensibly justifies a degree of defence from mainly outdated and discredited ideological attempts to discredit the scheme ...

Solar is intermittent and unreliable if you want to consider individual system spot generation against installed capacity (and please don't selectively quote some of that out of context - yet again), however, it does a great job at what it's designed to deliver in our case, that is covering property base-load for the majority of the daylight hours and providing peak generation to cover a considerable proportion of high-load requirements. Take a step back from individual systems and aggregate systems over a wide area and much of the intermittence argument starts to erode. Unreliable?, well it doesn't generate at night, but we no longer use high load devices at night, the load has been shifted - in our case peak demand for un-stored energy is almost always in daylight hours, that's all forms, gas, electricity and biomass so it's reliable enough for us and plenty of others who have done the same - all it takes is an open mind & a little planning ....

Not wishing to get hung up on other subsidies, the argument for subsidy based on 24/7 operation misses the point, particularly regarding nuclear, which contrary to many arguments, really compliments pv well, with both being base-load providers reducing the need for continuous fossil-fuel generation thus reducing emissions ... However, CfD subsidies, including nuclear, will need to be paid through billing, exactly the same way as FiTs therefore creating a debating position, morality and ideology quandary for some .....

Peak Demand ?, well what's happening there then ? .... as explained, our peak has moved and it's likely that it has for many others too .... then there's energy efficiency measures & technology ... we keep reducing the total UK generating capacity to a level where there's a claimed 'insufficient' generation capacity safety margin yet the decrease in demand seems to open the gap pretty quickly .... 6 lights, 2 TVs, a laptop, phone charging and all base-load demand currently being satisfied by drawing ~140W (taking PF into account probably less), which is around half of what the previous main TV would have been using on it's own ....

Paying for future installations ? ... whatever expectations are, future installations attracting subsidy will need to be paid for by us all, it's just that the payments will gravitate back to the large corporates who have little interest in creating low-cost competition of any sort within their current cozy clique ... CfDs are a component part of LCF and will form a significantly larger proportion than FiTs within the next few years, that's well before major generating capacity attracting CfDs comes on-line ....

FiTs a mistake ? ... well, introduction to date is just about 5 years, in which time both prices and FiT support have fallen by 3/4, that means that both have happened in parallel, one driving the other with the main catalyst simply being demand driven volume ... without the demand there wouldn't be volume, without the support there wouldn't have been the demand ... contrary to being a mistake they've been a huge success .... ~600k installations in just a few years with comparatively little support (vs Capital tax allowances/CfDs etc) and meanwhile we're still talking about planning the build stages and costs of other forms of generation .... error ? ... utter nonsense which can only reasonably be considered as simply spinning against success ...

HTH
Z

Martyn1981

zeupater wrote: »

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 ..

I'm glad you've mentioned the overall budgetary issues and the CfD's. I remained hesitant as comparing technologies can be misconstrued as a criticism. Do you remember a few years ago when you and I were explaining why new hydro couldn't replace PV, as there were too many limitations on new capacity, especially high head. I was always concerned that my comments might appear anti-hydro, which they weren't.

Now we have a similar situation, where the very early contracts for off-shore wind have swallowed up vast amounts of current and future funding, leaving very little for anything else. It is that fact, not any other, that has caused panic within government over the budgets.

Whilst I support off-shore wind, since it has a higher capacity factor and appears to significantly widen the generating pattern for wind (when compared to on-shore wind) it does have to be recognised as a significantly more expensive form of generation .... at the moment.

Domestic PV has been roughly matching it in terms of CfD v's FiT+Export, though this is not an easy comparison.

What is important is the sheer scale of payments, especially when you take that 'good' capacity factor and flip it on it's head. 1GW of off-shore wind at 40-45% capacity factor will generate around the same amount of leccy pa as about 4GWp of PV.

It seems to me that just that 1GW reduction, would fund the remaining 5 (or so years of FiT subsidies) as we head to a 'low or no' subsidy. In fact, if the FiT was reduced today to 6 or 7p, with a 6 monthly 0.5p reduction, then the potential 4GWp of new domestic PV would actually cost less, and the funding would be returned to the demand side, rather than the large energy generators.

Mart.

Martyn1981

zeupater wrote: »

I would support the FiT scheme even if I had no pv, just as I support other policies which have enormous benefits elsewhere ... indefensible?, well that's really odd - a scheme which has achieved the majority of it's goals would be classified by most to be a success and therefore sensibly justifies a degree of defence from mainly outdated and discredited ideological attempts to discredit the scheme ...

This is another point that I've also avoided up to now, but I (and I'm sure many other PV'ers) also share this view.

I was fully supportive of the scheme right from the start, but 'knew' that I couldn't have PV, after all, all the information said you had to have an unshaded south facing roof, or at the very least SE to SW. My east roof, with chimney was therefore not suitable.

However, after taking an interest in all renewable generation, and the new energy revolution, I found out that my ESE (not actually east) roof with chimney was suitable as PV is more capable than many realise.

I've always thought the argument - "you only support FiTs / PV because you have it" is extremely rude, and used solely to try to remove those (many who are extremely passionate about renewables) with actual experience of the technology, from the debates.

Mart.

Martyn1981

Cardew wrote: »

If people want solar panels on their roof, fine. They can be smug that they have reduced their demand on the grid, but don't expect the rest of us to pay for future installations.

Of course the very same argument can be made about those that want nuclear generation, can it not?

Though of course I appreciate that nuclear generation doesn't have the flexibility of PV allowing for domestic scale installs ...... or small commercial installs ......... or large commercial installs ....... or even relatively small industrial scale installs!

Plus of course, unlike green technologies like PV and wind, nuclear can't be funded directly via general taxation, so it won't be possible to shift any of the funding away from energy bill levies.

In fact the 'tax and subsidy' system of bill levies and CfD's for new nuclear is being challenged now in the European courts, as the UK's decision to support nuclear for a second half century, may not actually be legal under the EU state aid rules.

Mart.