Its claw back time - they are reneging on the deal!

Crowmann

If The Times is to be believed OFGEM are set to levy a specific fee against Solar generators - yep 4kw households to assist in maintaining the network.

Gonna be heap of squealing and protest and probably end small time generators if it comes about.

https://www.thetimes.co.uk/edition/business/solar-households-face-bigger-bills-under-ofgem-plans-xh3kjm0wj

Merlin139

Why not just reduce the FIT for people who are getting the top rate by 10%

Or just reduce it for everyone by X %

Crowmann

Ofgem have issued a consultation paper on fairness around paying for the grid.

Quickly scanning the document the direction of travel is clear - those who have fitted solar are using less power and this is burdening those who do not have economic/physical access to solar with a greater proportionate cost.

Given how Ofgem issue these largely rhetorical papers and then go off and do exactly what the expressly imply - no matter what the feedback I strongly suspect they will levy a specific solar tax. Or at least will try to. The political backlash might be considerable?

Alan_Brown

Here is the consultation paper:

https://www.ofgem.gov.uk/publications-and-updates/targeted-charging-review-consultation

Alan_Brown

Good news for the promotion of energy storage, removing a 'double bubble' cost:

"We think it is appropriate for storage to pay the ‘forward-looking’ charges that reflect the future costs that incremental demand and incremental generation impose on networks. However, we do not think it is appropriate for storage to pay both demand and generation residual network charges. This places storage at a relative disadvantage to generators providing similar services to suppliers, consumers and network operators.

We think that storage should be treated as generation for the purpose of setting all
residual charges, and so should not pay demand residual charges for either
transmission or distribution."

Alan_Brown

The main argument seems to be that if 'behind the meter generation' (i.e. domestic solar generation) reduces the electricity demand for solar users, it increases the costs for other grid users. The proposal is to charge solar users extra if theyare attached to the grid.

What they actually should do is have a fixed charge on everyone's bills that maintains the national grid, akin to the line rental charge for landline phones. Everyone pays the same levy for being attached to the grid. That's fair, rather than having the charge hidden in the energy usage payments.

Martyn1981

Crowmann wrote: »

Ofgem have issued a consultation paper on fairness around paying for the grid.

Quickly scanning the document the direction of travel is clear - those who have fitted solar are using less power and this is burdening those who do not have economic/physical access to solar with a greater proportionate cost.

Given how Ofgem issue these largely rhetorical papers and then go off and do exactly what the expressly imply - no matter what the feedback I strongly suspect they will levy a specific solar tax. Or at least will try to. The political backlash might be considerable?

Don't us PV'ers pay more (not less) already?

My standing charges don't take account of the fact that import has dropped from 3,000kWh to 1,500kWh, so I'm now paying twice as much for grid access as a low-medium user.

I recall that in the States, when there was concern about PV'ers on the NEM (net energy metering) where they get credited for export at import rates, it was found that the benefit to the local grid was actually worth as much, or slightly more than the import rate.

Perhaps the big bonus will be PV + storage, as that will reduce loads on the DNO's (and NG) during peak times.

Martyn1981

Some more info here

Solar households could be hit by radical changes to network costs

The regulator has therefore put four separate approaches forward for how these charges should be recovered from final demand. These are;

• Volumetric basis - Effectively based on the units of electricity used in kWh, Ofgem’s current method of recovery of residual network charges of the distribution system;
• Capacity basis - separated into ex ante capacity and ex post capacity demand charges, based on either a user’s agreed or connected capacity or peak system use
• Fixed charges - Customers are separated into user profile classes, with each class allocated a fixed charge determined by Ofgem to share residual network costs, or;
• A hybrid approach.

Crowmann

I see the outcome as a near certain - fixed charges on what they deem as 'classes'.

I fully expect those charges to be fairly steep - I cannot help but view this as a retrospective recovery by the OFGEM for the absurdly generous early FIT rates - I doubt the fixed charges will separate out those solar enabled homes on a FIT of 55p a unit (crazy) and those on sub 10p.

It will finish domestic solar - the storage story for small roofed properties (sub 7kw) is currently an economic dead end so in the main this is irrelevant unless battery costs fall dramatically - 50% plus.

michaels

Retrospective legislation - don't cha just love it?

Spend 5k on solar and recoup £400 pa for 20 years so perhaps a 3% real terms return on your investment - hardly unreasonably high.

Then after 5 years - now you must pay us £200 a year for the privilege of using less electricity because you have solar panels so rather than the investment paying for itself instead it will make a loss - got ya suckers.

What are you going to do - turn of the panels and lose the £400 a year?

Oh and of course your house price has now fallen by potentially several thousand because buyers will know that the leccy bills will be higher on houses with panels which will put them off.

What's that - you have also decided to run an electric car to improve the local air quality? Good - another £200 on the standard charge - so £400 total made up of:
£200 for using less electricity than 'normal' because you have solar panels
£200 for using more electricity than normal because you have an electric car

There is not even a suitable smiley to express just how cretinous this proposal is.

I can imagine people tearing working PV systems of their roofs and throwing them in skips them before putting their houses on the market.

michaels

Lets do some maths

MY PV install generates about 3400kwh pa.

It is deemed that I use 50% of this - 1600kwh which I would otherwise import.

Suppose the distribution cost is 20% of the unit cost of 12p = 2.2p/unit.

Multiply by the 1500 units and the loss of distribution revenue is 2.2p x 1600 units = £33 - is this ballpark correct?