Plans to change what households make from solar Feed-in Tariffs 'feels a breach of pro

inspectorperez

Doc_N said:

This may prove to be very relevant:

https://www.pinsentmasons.com/out-law/news/government-loses-appeal-on-solar-feed-in-tariffs

Hopefully Mr Milliband and his advisors will take note of this ruling in their deliberations.

Ectophile

Doc_N said:

This may prove to be very relevant:

https://www.pinsentmasons.com/out-law/news/government-loses-appeal-on-solar-feed-in-tariffs

Maybe.  But governments can change the law.  They are never bound by the decisions of previous governments.

All ministers have to do is change the law before they make a ministerial decision to change something.

Scot_39

Apart from those who invested in solar - no one should be willing to rationally support those demanding the sort of rates now being paid - far in excess of market rates - be allowed to continue in any form.

Especially from a generation source that is increasingly not in the wider public interest - and actually potentially not increases just generation costs - but network costs for us all in excess of the high per unit prices now being paid from posts above.  As available solar and wind renewables output simply often not matched by demand.

Put to the general public - side by side with current market rates the FIT escalated rates - wouldn't just be being reduced in increment - FIT payments would I hope be being stopped.

Even SEG rates of upto 15p/kWh some still quote seem excessive compared to grid level generation costs - of nearly double that for gas for last year.  That have fallen this winter keeping the duel fuel cap protected against excessive increases - over 5% in electricity rates for the Jan cap.

And dont pretend FIT isnt a problem for our electricity costs - from the Ofgem annex 2 document - FIT costs us all around 0.71p/kWh (+5% VAT?) - approaching a 3% addition on our retail side unit rates.

Just one of the high - and growing net zero costs - those facing the highest per kWh rates for their winter heating - do not need adding to their bills.

Millions forced to pay the relative few high guarantees of their overly generous indexed pricing.

Looking forward if generous indexing continues - if indexing is really inflation + 5% - say in another 10 years - if inflation returns to 2%(doubtful) that means those FIT indexed rates at 7% pa - will again double. So I guess would that 3% / 0.7p/kWh adder.

Some above argue the legal case - my point is that sometimes the moral case - as here should not be ignored.

Doc_N

UScot_39 said:

Apart from those who invested in solar - no one should be willing to rationally support those demanding the sort of rates now being paid - far in excess of market rates - be allowed to continue in any form.

Especially from a generation source that is increasingly not in the wider public interest - and actually potentially not increases just generation costs - but network costs for us all in excess of the high per unit prices now being paid from posts above.  As available solar and wind renewables output simply often not matched by demand.

Put to the general public - side by side with current market rates the FIT escalated rates - wouldn't just be being reduced in increment - FIT payments would I hope be being stopped.

Even SEG rates of upto 15p/kWh some still quote seem excessive compared to grid level generation costs - of nearly double that for gas for last year.  That have fallen this winter keeping the duel fuel cap protected against excessive increases - over 5% in electricity rates for the Jan cap.

And dont pretend FIT isnt a problem for our electricity costs - from the Ofgem annex 2 document - FIT costs us all around 0.71p/kWh (+5% VAT?) - approaching a 3% addition on our retail side unit rates.

Just one of the high - and growing net zero costs - those facing the highest per kWh rates for their winter heating - do not need adding to their bills.

Millions forced to pay the relative few high guarantees of their overly generous indexed pricing.

Looking forward if generous indexing continues - if indexing is really inflation + 5% - say in another 10 years - if inflation returns to 2%(doubtful) that means those FIT indexed rates at 7% pa - will again double. So I guess would that 3% / 0.7p/kWh adder.

Some above argue the legal case - my point is that sometimes the moral case - as here should not be ignored.

Moral case? Breach of contract by a government is now moral?

Baldytyke88

Ex_Executor_49 said:

I agree with ppppenguin - a contract is a contract.  I think the government consultation is a sham. It asks: 'Option1: Do you want to switch your annual increases from RPI to the lower CPI rate now, or Option 2: Do you want to have no increases until CPI catches up with the current RPI (in about 10 years).  I want to stick with annual increase in line with RPI.  

RPI was the official measure of inflation in the UK from 1956 until it was replaced by the Consumer Price Index (CPI) in 2003

But now the ONS now say that CPIH is the best measure of inflation. It would seem strange to use CPI, which is around 1% lower than RPI.

Scot_39

Yes - and those contracts could even be illegal - if argued the result  75p/kWh as quoted above - over 10x Ofgems own latest summer 2025 day ahead supply rates (around 6-7p/kWh Aug /Sep) technically were to be found to be treatable as profiteering.

Govt authored contracts doesnt mean they are correct - just that they were be definition legal at the time and cricumstances they were authored.  Doesnt make them suitable 10 years later - let alone 25 years later if that's the fit guarantee.

5% extra if true on 10% inflation one thing - for instance - 5% extra on 1-2% inflation another.

Is anyone really honestly made or making a loss on their FIT installs at those sort of returns - especially the older ones at the highest rates ?  If so that would be one thing.

However if they are now profiting - and in my view - judging by price differentials potentially excessively so - then thats just offensive to the poor of the nation - and needs addressing.

How much would someone with 10k of panels be earning per year under the old rates so 75p now ?

And since the argument here is about minor - far too minor for what I would like to see - future indexing - lets look a decade ahead

If CPI inflation was really 2% - in 10 years time -  prices would go up 21.8%

If RPI inflation was to be say 3% - in 10 years time - prices would go up 34%

But - and I havent seen the contracts - but if the QRizB post above is correct and the indexing is based on inflation+5% (or did that also change in 2012?)

As above if switch to CPI 2% +5% - at 7% indexing they go up 96%+ - nearly 5x CPI inflation.

At RPI inlfation if 3% + 5% - at 8% indexing they go up by 116% - nearer 6x CPI inflation target.

A simple question - 

Would you be happy if everything you needed - not wanted note but needed (as we are talking about energy more and more folk are being pushed towards for hw and heating) - went up nearly 6x more in the next decade ?

So lets see if anyone defending the 75p - and potentially £1.50+ in a decades time - how much of the original capital outlay - folk with early high rate (as expensive then) FIT panels - have yet to recover or projected not to at even todays rates ?

Selling something for 75p - as been quoted above - when Ofgem own summer day supply rates for Sept 25 - say average 6p - so over 10x above market rates - thats pretty much not only likely to strike most as excessive profit but potentially far worse.

Expecting them to double again over the next decade - IF the inflation+5% true - even more offensive and yes given the impact on the poor now and going forward - immoral.

Seriously hold a poll of the general public and ask them if its fair 

for FIT panel owners to be paid 75p type rates for electric when Ofgem say market at 6p.

Or more to the point since this is about the indexing, it increasing to 

£1.60 vs 7.3p in 10 years time.

I strongly suspect fit panel owners will not get the backing they might think the old contracts entitle them to.

And politicians forced to take much more drastic action to address the backlash from it.

Doc_N

Scot_39 said:

Yes - and those contracts could even be illegal - if argued the result  75p/kWh as quoted above - over 10x Ofgems own latest summer 2025 day ahead supply rates (around 6-7p/kWh Aug /Sep) technically were counted as profiteering.

Is anyone really honestly made or making a loss on their FIT installs at those sort of returns - especially the older ones at the highest rates ?  If so that would be one thing.

However if they are now profiting - and in my view - excessively so - then thats just offensive to the poor of the nation - and needs addressing.

And since the argument here is about minor - far too minor for what I would like to see - future indexing - lets look a decade ahead

If CPI inflation was really 2% - in 10 years time -  prices would still go up 21.8%

If RPI inflation was to be say 3% - in 10 years time - prices would go up 34%

But - and I havent seen the contracts - but if the QRizB post above is correct and the indexing is based on inflation+5% (or did that also change in 2012?)

As above if switch to CPI 2% +5% - at 7% indexing they go up 96%+ - nearly 5x CPI inflation.

At RPI inlfation if 3% + 5% - at 8% indexing they go up by 116% - nearer 6x CPI inflation target.

A simple question - 

Would you be happy if everything you needed - not wanted note but needed (as we are talking about energy more and more folk are being pushed towards for hw and heating) - went up nearly 6x more in the next decade ?

So lets see if anyone defending the 75p - and potentially £1.50+ in a decades time - how much of the original capital outlay - folk with early high rate (as expensive then) FIT panels - have yet to recover or projected not to at even todays rates ?

Selling something for 75p - as been quoted above - when Ofgem own summer day supply rates for Sept 25 - say average 6p - so over 10x above market rates - thats pretty much not only likely to strike most as excessive profit.

Expecting them to double again over the next decade - IF the inflation+5% true - even more offensive and yes given the impact on the poor now and going forward - immoral.

Seriously hold a poll of the general public and ask them if its fair 

for FIT panel owners to be paid 75p type rates for electric when Ofgem say market at 6p.

Or more to the point since this is about the indexing, it increasing to 

£1.60 vs 7.3p in 10 years time.

I strongly suspect fit panel owners will not get the backing they might think the old contracts entitle them to.

And politicians forced to take much more drastic action to address it.

And a simple question for you too - what is the point of the law of contract if contracts can just be set aside because one party chooses to? If you entered into a fixed price contract to supply electricity at 20p per KwH, how would you feel if the supplier turned round part way through the contract and refused to supply any more because wholesale prices had risen?

WiserMiser

Scot_39 said:

Govt authored contracts doesn't mean they are correct - just that they were by definition legal at the time and cricumstances they were authored.  Doesn't make them suitable 10 years later - let alone 25 years later if that's the fit guarantee.

So you'd be totally happy if you'd signed up to a 25-year mortgage fixed at 2% for the entire duration, only to find they tore it up and unilaterally hiked the rate to 15%?

Or if you took out a lifetime annunity but they scrapped it after 10 years because they thought you'd already lived too long?

A contract is a contract is a contract.  Once you've signed it you must honour it, no ifs, no buts.

Scot_39

No contract is fixed in stone - short or long term.  Commercial contracts are I promise you from experience regularly reviewed and changed - sometimes with changes backdated - not just going forward. 

And from posts above - the govt has in fact reserved the right to do just that - change when conditions change.

Fixes last for 1-2 years - not upto 25 if the above comments correct.

But lets run with it in the context of current market developments and this weeks budget plans.

Are you now saying fixes should stand - all contracts should stand - and so the expected £150 savings not passed on.

So someone entering a fix 2 weeks before the budget might have to pay say £50 exit feesx2 - to benefit - or wait 8 months at the higher costs say.

As turning your rise on a fix around - just look at those who are now frantically running around - like ML - that the promised policy savings come April should be passed onto those on fixes.

So prices drop you win, prices rise you win - really that is the reality of today's attitudes.

And our populist politicans often just buy into it at - populism all too often beets what others argue the correct path.

Contracts can be good or bad.

Conditions change - a decade of low rates and inflation post crash - have made a mockery of the FIT escalation tables if really were inflation+5%.

If greens like Miliband were right - and renewables are meant to lower - not increase energy prices - as promised before the GE - a govt tolerating these sort of rates - and especially the future escalation - is on pretty sticky wicket.

These long term FIT contracts have clearly been bad for consumers - very bad if the 75p vs 6p comparisons are true.

And if too much a fuss is made over the changes - then the general public might well become very very aware of the problem.  And FIT investors are likely to feel the impact in their pockets as prices more likely to be slashed than defended by current MPs.

WiserMiser

Martin Lewis is not infallible; sadly, once again he's got it wrong.

A fixed price contract should be exactly that, for better or worse.  If you sign up to buy electricity for 20p/kWh + VAT then that's what you should pay.

If the free market rate then rockets to £1/kWh + VAT you celebrate, if it plunges to 5p/kWh + VAT you wince, but you're committed to it either way.