back to article Australia cuts solar subsidies, and not before time

Before anybody denounces me as being “anti-solar” I want to put this on the record: I own 16 solar panels, a largish inverter, and because the system was built in the days before grid-connect arrived in Australia, a decent-sized bank of batteries. Australia is now host to a lively – in fact, heated – debate over the way …

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Anonymous Coward

Logic

"Grid-connect inverters have seen some small price deflation – about 10 percent; standalone inverters haven’t fallen at all; and battery prices have risen. Note that standalone inverters and batteries are characteristics of off-grid solar, which doesn’t attract the same government support as grid-connected systems."

Doesn't this imply that subsidies have improved uptake and lowered prices for grid connected gear, whereas a lack of subsidies has not had that effect for non-grid-connected gear?

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(Written by Reg staff)

Re: Logic

Anonymous: Pretty much; that was my argument. This is, however, opposite to the impact of subsidy in many markets. In Australia, both non-state schools and childcare have absorbed subsidies with fee inflation. The surprise in the solar market is that "subsidy inflation" didn't happen. There might be some kind of price-floor effect - but downgrading or removing the subsidy would also remove that effect.

Richard Chirgwin

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Globalization ...

You can import solar panels, you can't import childcare.

Prices of (easily) globally purchasable resources cannot rise with subsidies - local providers become uncompetitive.

Cue rant about lawyers, accountants, the NHS, etc - all classic industries which have seen above average wage rises over the last 50 years compared to industries which have global markets.

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FAIL

Component Margins & restrictive practices.

I buy electronc components wholesale. One of my suppliers sells grid connect inverters. The wholesale price for a 2KVA is about $1.6K. Recommended retail is $3.2K. So 100% markup to the installer without counting the installation fee.

Now my issue is that although I'm a qualified electronic engineer and work with 'normal' battery feed inverters for emergency power to fire-stations I can't buy these 'solar' inverters. I have to be a recognised solar installer.

Worse, to become one requires me to do three extremely very expensive courses in site assessment, panel design, and actual installation and then get certified by some self-appointed trade body.

The system is rigged to produce very expensive parts and double rigged to exclude normally competent engineers - who FFS design these bloody systems in the first place!

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Go

This suggests...

There is a robust market, and potential greater price reductions, hiding in the weeds. Which is further evidence that solar has reached a point where it's time to let it stand alone - and maybe time to smash some barriers to professional entry as means of further driving market uptake.

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Welcome to the world of electric engineering

The same happened in the UK (with lesser numbers involved) after the annual re-certification+courses for electrical engineers became mandatory about 5 years ago. Prior to that all you need to do was to have an IEE membership which most geeks already had. The markups went through the roof and the quality of work tanked. And the engineers started behaving like complete and total primadonnas.

I am still fixing the "damage" done by one such muppet 3 years ago on my house extension. I had to redo cable runs, unscrew nearly every socket and sort out the cabling in it, move sockets and extensions where they should go, hide cables run in plain sight for everyone to see across walls and along the floor - you name it.

Unfortunately, I had no choice but to employ the aforementioned muppet to do the work because you cannot get a "competed to the building standard" certificate without a muppet signature.

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Boffin

Actually, Part P didn't require you to do that.

It is permissable to do the work yourself and pay a council jobsworth to inspect it.

I think it costs about £500 for the inspection, which consists of them taking the front off one or two sockets then ticking the box. If you're unlucky, they'll ask to see your design docs. Rare that'll happen as most don't understand them anyway.

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Confused?

I'd be more than surprised if people that do home wiring installation for a living have even heard of the IEE/IET, never mind belong to it. They are more likely to have technical qualifications (HND/HNC/C&G-type) than to have the degree-level qualifications and years of experience needed to become an IET member.

I think you're confusing need for compliance with the IET wiring regs, with the need to have "Part P" building regs certification.

I do agree, though, that the insistence on all installers being certified under Part P has merely increased the number of cowboys around. It puts up the cost of work done by those who are qualified and encourages the cowboys (who know that householders won't check) to undercut them. Maybe they throught it could work like the "CORGI" gas scheme, if so it was woefully-badly implemented.

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Silver badge

Welcome Back to the Mediæval Guilds

The scheme effectively creates a return to the mediæval guild system, openly encourages rent-seeking and anti-competitive behaviour, and so is almost certainly illegal under EU law.

The first time someone who obviously knows what they are doing (for instance having an engineering or physics degree) but hasn't paid for the right piece of special, expensive paper which -says- that they know what they are doing gets nicked for doing something better than someone with the right piece of paper would have done it, they will fight it in court -- and win.

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FAIL

Green Jobs

I forgot to point out.

Under this solar installer scheme thousands of 'Green' jobs have been created. Not actually useful jobs, just jobs that are not actually paid for by the Government, so doubly good for the Government.

The Minister crows about the job increases. The ever long suffering citizen pays a hidden 'green' tax for a service they don't need from mostly incompetent and greedy trades.

Forget the fricken subsidies and open the market to free competition!

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FAIL

Except

Truly free competition would require for the oil companies to manufacture as much new oil as they are drilling out of the ground, and the mining companies to manufacture as much fresh coal as they are digging out of the ground.

Stealing stuff (in this case, from future generations) is always going to work out cheaper than buying it -- until the rightful owner runs out.

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Flame

Subsidies cost taxpayers money...

....but so does building power stations. (Here, the privatised electricity util's sure won't build them)

Instead of more coal powered, smoking behemoths, I'd prefer micro-solar generation/assist for homes and business model.

Keep the subsidies until the solar industry hits critical mass.

Flame = it's the sun innit!

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I think...

The central argument is that the industry appears to have hit and *passed* critical mass already.

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FAIL

"Keep the subsidies until the solar industry hits critical mass."

It will either do so on its own or never.

Everything else is make-believe.

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Good analysis

Very good analysis.

As someone who just put up a 3kW system which cost us less out of pocket than the 1.5kW system you mentioned, thank you subsidy, I'm torn.

Would we have done it without the subsidy? Maybe - the driver would have been energy prices even more than the cost of the system. I suspect that's true for a lot of people, because the real savings is in the grid connection over the lifetime of the system.

I expect there will be an insane run for the doors with the end-of-life of the subsidy, followed by a slump, which pundits will point to with a "told you so", then followed by sales picking up as energy prices inevitably creep up.

Also, you forgot to mention the number one price-raising subsidy: the miserable first home buyers grant!

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Joke

@Michael Hoffmann

"the miserable first home buyers grant!"

Australians get a government *grant * to buy their first homes?

"You lucky b***ards" (as the prisoner in The Life of Brian would put it).

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It's crazy

I first arrived in Australia about 11 years ago, having just sold a very nice house in leafy Surrey (a victim of IR35), and started looking for somewhere to live in Australia. It turned out that, since I was buying my first house in Australia, I qualified for a " first home buyer's grant". Around $7000 in those days, although it later went up to $14000. If I'd been smarter, I could have got a second grant for my father, who emigrated with us.

Last year, to combat the recession, the government gave all taxpayers a $900 handout to spend as we chose. Most people got an imported plasma TV with it, which probably helped the economies of Taiwan and Korea a lot.

All this probably explains our 48% income tax rate.

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Not as lucky as you might think.

Since 2000 the Australian federal government has offered a $7000 payment to first home buyers, and a various times there has been an additional $7000-14000 if you build your first home rather than buying an existing home.

This is not the only reason but certainly is a significant factor why housing prices in Australia have more than doubled in the decade since and our housing affordability has been on a continuous delcine to the point where we are now one of the most unaffordable housing markets in the developed economies.

To make matters worse Australia's economy escaped the global financial crisis relatively unscathed and so while housing prices in other major markets notably the US and UK corrected themselves and declined considerably ours barely dipped at all and then contined to rise sharply in the two years since.

In the late 1980's Australia experianced a recession famously referred to by our prime-minister of the time as "the recession we had to have". During that recession home loan interest rates in Australia reached 20% but an average mortgage required less than 30% of houshold income to service. Now home loan rates are at 7.5% but the average mortgage requires 35% of household income to service.

Theres a reckoning coming in the Australian housing market and until it arrives I will be happily renting a property I could never hope to buy, first home buyers grant or not.

See http://www.demographia.com/dhi.pdf for more detail on relative housing affordaibility.

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Megaphone

Housing Affordability

I'd argue with Australia's housing affordability. Having moved to Queensland from the UK about 5 years ago I found that I could afford a lot more house and land for the money. The downside was a reduction in wage and higher mortgage rates. After one house move we're living in a nice little house close to work and schools. Whilst we look at moving back to the UK from time to time, we would have to sacrifice things like off-street parking and living space.

Friends' kids are of the age that they're looking to buy their first house. In many cases they want to buy a (detached) house in a good suburb with 3+ bedroom, media room, loungeroom and family room and some land and then cite 'housing unaffordability' as either the reason that it's beyond their reach or the reason they have to sell when the mortgage rates go up or one of them loses their job.

I look at my wife's first house (she's from the town we live in) and it was a little cottage in need of repair in a lower-class but respectable suburb. Suggest to the aforementioned house-buyers that they should look at that end of the market and they turn their noses up. Tell them how much my little sister has just spent on her first house (saving for about 10 years and the bank insist on a maximum 70% mortgage) and they stand agog... before returning to whinging.

Sure, places in Sydney and Melbourne are expensive, but barely more than London, Paris or New York.

In short, I find that most of the people who complain about the affordability of housing in Queensland are not prepared to compromise.

</rant>

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"markets notably the US and UK corrected themselves"

I'd argue that the market here in the UK has barely corrected itself, I still think we are heading for a major crash.

House prices have grown so much over the past 15 years (this was seen as a good thing for some reason) that it has priced most first timebuyers out of the market, this lead to lenders leding money to people who couldn't afford it i the hope that the inflation would continue. It couldn't so we get the crash, excpet what we have had is more of a blip. Prices are still too high, I have a very modest 3 bed semi, it cost £250k, and "apperently" is now worth £280k 2 years later. That is plainly stupid, but the market shows no sign of stopping.

I fully expect a major "correction" at some point in the future with all the associated negatibe equity for many.

All this because the un-sustainably rise of house prices was seen by many as a good thing.

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Silver badge

Similarly, I wouldn't say the US has finished its correction.

One of the problems is that the banks are trying to avoid collapsing their own portfolios, so instead of foreclosing on non-performing mortgages (assuming they have their paperwork in order which is a whole other ball of wax), they are holding them. So there is a huge buffer of houses in the foreclosure queue. If anything causes it to spurt more houses on the market unexpectedly, we could be headed for another huge price drop.

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Economic Tipping Points

Henry Ford, turned the world upside down with nary a subsidy.

At the time he came along, motor vehicles were a rich man's extravagence.

As a result, there were very few decent roads, no filling stations, few mechanics and so on.

Henry, who was an electrician by trade, saw that if he could produce a car which the middle classes would want, and afford, then perhaps he could earn a living selling a few.

Now.

Please tell me how anyone on this planet with a BIG IDEA, needs a govsub to get it off the ground?

Surely the question is quite simple.

"Is it economically viable, or not?"

The rush to solar, wind, etc was fueled by worries about man-made global warming, now proven false.

Then the "Peakists" took over, with their cry, "The oil is running out!"

But Shale Oil has put paid to that.

Watt, with his steam engine, became a tipping point in mankind's economic history.

Future generations will regard the advent of Shale Oil as the second economic tipping point.

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Re: Economic Tipping Points

"Is it economically viable, or not?"

Fair enough, but remember simply-applied economics isn't necessarily going to give the best answer, especially when the "benefits" (e.g. greater chance of breathable air / stable climate) are remote from the "costs" (i.e. the real and immediate price of the panel).

Take the familiar example of public transport. The more railways they build, the more I benefit as a motorist through reduced traffic congestion. But as a motorist, I don't expect (or want) to pay for rail infrastructure. That's the job of the rail passengers, or possibly "the gub'ment". Economic models struggle to deal with the sharing of costs and benefits between persons unknown.

Inevitably, the pursuit of "big society benefits" (which may make perfect economic sense at the macro level) results in a complex and perverse web of tax & subsidy at the micro level to try and make it all work.

None of this makes the economic argument wrong. Just complicated.

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Re: Economic Tipping Points

...and to finally answer your question, Henry Ford didn't need (or deserve) a government subsidy because the costs (buying a car) and the benefits (being able to get from A to B) apply to the same entity (the car buyer).

Basic market economics works beautifully here. There were no external costs on society to worry about, because there wasn't any pollution problem (yet) and there wasn't any congestion (yet). Cars were (and can still be) a great business proposition.

Compare that with the building of roads. The up-front costs are absolutely massive for the road builder compared with the immediate value of a decent road to to motorist. Not rational car owner would *never* pay for a decent road. Ever.

Wiser heads realised that the benefits of decent roads to society would be huge over a long period of time. So they put up funding for a decent road network (through subsidy or loan) and then recovered the money over a period of time (through tax or repayments).

Result: nobody makes a fortune from building roads. Everybody wins.

So, not all subsidies are bad. Just some of them.

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FAIL

Re: Economic Tipping Points

"The rush to solar, wind, etc was fueled by worries about man-made global warming, now proven false."

Really?

"Then the "Peakists" took over, with their cry, "The oil is running out!""

Peakists? Try swapping out Fox News with Sesame Street so that you can learn some proper words.

"But Shale Oil has put paid to that."

Ah, yes, it's shill oil again.

"Future generations will regard the advent of Shale Oil as the second economic tipping point."

Bingo! "Tipping point" was the final buzzword. Meanwhile, your lips seem to be synchronised with the voice of the talking head on the television screen, filling the airwaves with a solid contribution of zero to all of the debates covered here.

And on the subject of Peak Oil, it can't have escaped your attention that oil is getting pretty awkward to get at these days, what with deepwater drilling and tar sands extraction, both seeming pretty unviable back when people started to mention the notion. I'm sure there'll be a Titan drilling expedition advocated at some point if only to claim that "We're not running out, really! It's still flowing!"

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tas

Economics terms

The name for the greater framework that fuels whether to tax or subsidise market activities is "economic externalities" or more specifically negative Pigovian taxes/Pigovian subsidies, in case anyone wants to research the topic further.

To quote Wikipedia, "an [economic] externality (or transaction spillover) is a cost or benefit, not transmitted through prices, incurred by a party who did not agree to the action causing the cost or benefit".

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Unhappy

Price still the blocker (in UK)

Here in the UK, Solar is still not achieveable.

Quite simply - until full installs cost £2,000 not £20,000 (the uk climate makes this a risky proposition, compared to sunny climates), we're really not interested.

We - as a nation - would still rather fork that amount on extensions, patios and conservatories.

A shame - I've got £2k here for anyone that can fit me a grid-linked 1kw PV system, on a east coast, south-facing Central Belt Scotland home. Some sensible prices for vertically-drilled geo-therm would be nice too...

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Gold badge

£2k will get you a lot, but not fit it.

Renewable technology is a minefield, and the pay-offs are still marginal at the household level.

Your other problem is fitting it. Put solar on a new build house, and it can be inlaid into the roof, as you build it. Which is quite easy and cheap. Retrofit it to an existing one, and you've got to get 2 people safely onto the roof, with heavy equipment. Yes you can do it with 2 blokes and a ladder, but if we did it that way for every house in the country, quite a few workmen would end up falling off and dying. Doing it to comply with health and safety, adds to the cost. Then add in the problem of siting equipment inside the house, plus drilling holes through floors and walls to connect everything up - and the equipment costs have probably dropped to under half the final price.

This is made worse in the UK, because with little tradition of using this stuff, few of our tradesmen know how to fit it. Making a chicken and egg situation. Once installed numbers go up, costs will drop.

£2k should get you solar-thermal - on an average sized house. But not install it. That should cut your water heating bills by around 40-60% (prob. closer to the low side). If you use underfloor heating, then it'll save even more, as that only needs water heated to 40 deg C - whereas radiators need 60. This works even in cloud.

Solar electric is a lot more of a chancy proposition. And does most of it's work when you're probably not at home. So without batteries, it does you less good. I haven't seen costings for this yet, but there were companies offering free solar panels, if they could keep the feed-in tariffs! So the government is cutting that subsidy - as it was obviously set way too high.

If you've not got the space, or the geology for ground source heat pumps, then air-source heat pumps are probably a good solution. I'm told you can achieve about 3 watts of heat, for every watt you put in. I think kit isn't too expensive. Though quite large.

A much better area to look at, would be rainwater harvesting. We've got lots of rain. We each use around 20,000 litres of water per year, just flushing toilets. That's a bit of a back of the envelope calculation, but will do. That's a lot of treatment and pumping of lovely clean drinking water we're wasting. Rainwater, with a bit of filtering, and maybe UV treatment would be great for this.

However I'm not sure any of it really stacks up at the domestic level. Savings are pretty marginal. For offices, public buildings, or blocks of flats (or groups of houses) though, they could all be economic. Except solar-electric, which I'm not sure we have enough sun for. I expect to see some data on this before next year, when I'm supposed to be selling it...

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Unhappy

Rainwater harvesting

You will find that the existing utilities will still charge you your standing charge on the basis that you are returning more waste water into the system than you consumed. Storm water drains are also charged a lot more for the same reason.

Several companies with modern buildings are already running two separate water systems on-site. The one deals with rain water captured for re-use in air conditioning, the landscaping and possibly flushing the toilets, the other deals with potable water for use in the kitchens/bathrooms. Most modern skyscrapers are designed with this in mind.

Although I (well, most of the public anyway) see the point in grey water harvesting (which rain water is considered as), the water utilities (Thames Water and their ilk) don't. They believe that you are making their work more difficult by making their sewage plants work harder and subsequently charge you a lot.

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What?

You don't seem to have researched this recently, or properly.

Here in the UK, I had the maximum practical grid-linked PV installation (just under 4kW- more than that and you get a reduced tariff) put up recently for under £15,000, by Tesco of all people (double clubcard points too). I know nothing about an installation subsidy- don't think there is one, but you get paid an absolutely amazing rate for the electricity you generate. At 44.8 pence per kWh, it is four times what I PAY for electricity, and I get that on every kWh I generate, including the ones I use myself (43.3 pence overall, + 3 pence for the "half" that I supply to the grid). They simply "deem" 50% of it to have been fed to the grid, without actually metering that aspect.

This is not a tax-funded subsidy. The government is using other people's money in a round-about way, by forcing the electricity companies to get 15% of their generation from renewables. It is the electricity provider who pays me over the odds for my generation, to meet their renewable quota (and avoid being fined). They don't really care if I use it myself or pump it upstream as long as they get the credit. The company then charges everyone else over the odds to cover their expenses for the renewables bought in.

£2k pounds won't get you an installation, to be sure. And don't try to do it yourself or get a cowboy in, only approved installers can get you the paperwork you need for the "feed in tariff" contract. That's a 25 year contract, with the payments index linked (went up in April).

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Flame

@Apocalypse later

"This is not a tax-funded subsidy"

You do understand indirect taxes don't you? No I didn't think so.

By your logic VAT isn't a tax either, the obligation on the retailer is to pay it, (formal incidence) not charge it. So guess what? They pass it on... (effective incidence)

As indeed you don't seem to realise here:

"The government is using other people's money in a round-about way, by forcing the electricity companies to get 15% of their generation from renewables."

"It is the electricity provider who pays me over the odds for my generation, to meet their renewable quota (and avoid being fined)."

No it isn't - it's other customers. Then of course if it tips them into "fuel poverty" that triggers more effective incidence.

And as the scheme is currently and bizzarrely not linked to any requirement to conserve energy, not only is it bollocks, it's total bollocks.

If it were not bollocks, people would not be offering free panels in return for an index linked (I bet that is still RPI and not CPI) 25 year income stream.

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Oh, Gerry...

Of course I understand what is going on, in fact I thought I explained it. Yes indeed, electricity buyers are the ones who are ultimately paying my feed in tariff. The money is not coming from their taxes, or from the government, but via their electricity bills (and mine for that matter). The point about it not being a tax funded subsidy may be a bit subtle for you. Governments are sensitive to public criticism of their tax and spend policies, which are scrutinised by the press and taxpayers. This is a way for them to hide what is going on, as an environmental regulation of the industry, and those who are paying for it are only recently starting to wake up.

Labour used to do a similar thing by giving tenants more and more rights in the property they were renting. It was a way of giving other people's money to those who were likely to be Labour voters. Eventually it became so one-sided that owners wouldn't rent out property anymore. Maggie undid the damage with the current fixed term tenancy rules, but I remember how hard it was to find a place to rent in the 70s.

Of course the renewables policy is bollocks, as is the rest of the global warming industry. I am just taking advantage of the foolishness, one of the rare opportunities to do so. You are quite right to refuse to take the money. It's a highly principled stand and I commend you. You will still have to continue to pay for my bung, though.

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Flame

Maggie undid the damage ?

No she fucking didn't. She did the damage. She threw the baby(s) out with the bathwater. As well as bringing in new licences, which already existed anyway, she removed all rent controls, decimated social housing, threw out the "sitting tenant" class of tenancy etc etc.

I rented from 1980 onwards & I've never owned a house, so I'm in a fairly good position to judge the state of the rental market. I had no problem at all renting during the 80's. Thatchlers rent fiasco passed in 1988. Rents immediately rose quickly. There was never a problem with tenants having "too many rights" - the Tories perceived there was a problem with their landlord mates not being able to charge what they liked & kick people out of their homes(yes it is the tenants *home* you know) when they liked, so they "de-regulated" the rental sector. According to your logic, a lot more people are landlords now, so rents should be driven down as there should be a glut - Wrong.

There was nothing wrong with the "Fair rent" idea - it was administered correctly & was fair to both sides. Also any landlord could rent a property using a licence agreement which lasted 6 months, which was very common. All the scare stories were bollocks. I'm lucky enough now to share a flat which was originally rented before '88 so is *still* subject to the Rent Act, so there's a limit on the % rise the landlord can add on every year. The landlord owns a few million quid houses outright though, so he's laughing anyway(like so many landlords who've inherited their little goldmine).

You seem to be talking sense about things you've actually experienced - then you went & spoiled it by coming over all political. I love the way you take pride in your hypocrisy about "the GW industry" & "I'm just taking advantage".

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WTF?

Opportunity for arbitrage there...

So is there anything stopping people from running a cable to their neighbour, selling back their neighbours cheaper grid-supplied electricity as their own 'solar-generated' power during daylight hours, and then splitting the profit? :O

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Anonymous Coward

Lintel loading

There's also the little fact that adding roof panels are going to add more load (quite a bit more wind load) to the roof.

While the guys installing it might assess your roof strength, they're unlikely to give a lot of thought to lintel loads below. The big builders (ie mass new-build) tend to cut the margins quite close so any modifications you make to a roof really needs a structural engineer in.

Better off using a heat pump really in Scotland.

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@Apocalypse - when being patronising, get it right so you don't look stupid

www.parliament.uk/deposits/depositedpapers/2010/DEP2010-2374.doc

Why are levy funded subsidies taxes?

Levy funded subsidies count as both tax and spend in the National Accounts drawn up by Office of National Statistics. This is because they involve Government-mandated transfers of value between individuals or entities. A payment (such as a levy) is a tax if it is:

Compulsory – relevant individuals/entities have no choice but to pay; and

Unrequited – those paying receive no direct commensurate benefit in return.

In addition, even where a scheme is obligation based, these entail a payment to other parties that is mandated by Government and so represents a tax. So levies count as tax even if no funds are actually received, or paid out by, the Exchequer and even if there is no option to pay a charge rather than meeting an obligation (a buy-out option).

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@ Apocalypse Later

I believe the government are going to stop this current feed-in tariff nonsense for domestic solar. Although we're on our 3rd or 4th domestic subsidy scheme since I started working in solar 5 years ago, so quite frankly, fuck-knows.

I don't know what effect any change will have on your contract. I guess they'll carry on funding the existing small number of installations, and stop new funding. But who knows?

I mainly sell commercial solar, so I'm usually involved in actual proper energy savings - rather than arseing around with crappy subsidies that almost certainly cause environmental damage, and bizarre transfers of money from the poor to the upper middle classes.

I did sell a set-up to a university (who shall remain nameless to protect the guilty), who installed a £6k system to feed 1 hot tap in a large building where a £15k system would have paid itself back in about 5 years. This allowed them to get some kind of green subsidy bung, and claim false green credentials - while remaining complete arseholes. I must say it made me rather sad, and I advised them not to buy it - and it still annoys me now, a year later. Apparently the customer is always right...

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Renting

I do know what I am talking about on this subject. I had a very difficult time finding anywhere to rent in the 70s (not 80s). Yes, once the Labour bias towards tenants was reduced or removed, rents went up, and as a consequence rental properties became available again. "Fair rents" are not fair to the person who owns the property. If they can't make a return on their investment (or ever get tenants to leave), they won't let.

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Arbitrage

Well, you aren't allowed to do it. The installation can only be put in place by an approved installer and you aren't to mess with it. As for getting caught, there is an expectation of how much power will be generated by any given installation, and if your meter readings are wildly out of line, they will be around to check. I read my own meter and email it in, but they have the right to check for themselves.

Apparently, people on similar schemes in Spain were running diesel generators to boost their feed in tariff payments, but they didn't get away with it for long.

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DR

I have to disagree

"£2k pounds won't get you an installation, to be sure. And don't try to do it yourself or get a cowboy in, only approved installers can get you the paperwork you need for the "feed in tariff" contract. That's a 25 year contract, with the payments index linked (went up in April)."

and that is what I see as the problem, and it's a problem that the author responded to in reply to the first post.

firstly, £2000 will actually get you a beast of a system, if you're willing to construct it yourself, or use unapproved fitters.

it'll pay for it's self environmentally (energy to make it compared to energy generated) in the same time as a "professional" system.

economically paying for it's self takes a little longer. because you can't have a feed in tariff because you're not using approved equipment... and that's the exact point that the author made about child care.

£2k will get you an unapproved system and even get it fitted provided that you're willing to put a lot of time and planning research and knowledge yourself into the project, Savings at the power station mean that environmentally the system will pay for itself and your savings on your bills will mean that the system will pay for itself in the money cost terms.

Alternatively you can opt for an approved system by an approved fitter, basically a guy who has sat on a pointless course for a day and gained a certificate for it...

then you can spend 8k on the same system, (which pays for it's self in the same time environmentally), and because of the feed in tariffs will likely pay for it's self in the same time...

the difference in the two approaches is this:

if you go with the approved system you have to have at least £8k upfront, most people don't

if you go with the approved system you'll get a FIT tariff, which is set-up to justify an arbitrary target and robs everyone (rich and poor, but especially the poor since you can assume that the rich can have the system installed themselves and gather money from the poor) to pay over the odds per unit so that you get your system paid for...

and how does this relate to the authors reply...

well, the fitters are UK guys, they are the ones charging over the top for a system that you have installed because they can still see it's worth it because of your highly subsidised unit price. the FITs and ROCs are benefiting the UK installers only.

The panels for your unapproved system can be bought cheaply,

if you want panels approved for FIT/ROC you have to buy from UK distributors, for panels that have been through an approval process, and there is a commission added on top for that.

i.e the FIT/ROC system is benefiting the panel distributors who also realise that the system is worth money to you, so they'll charge you as much as they can as well...

the reality of the situation is that the solar industry even in the UK is good enough now.

the feed in tariffs and green stamping of equipment and installers to qualify for the tariffs are pushing up costs.

the idea that someone is a cowboy because they've not sat on a day long £200 course to tell them what panels they are allowed to use is laughable.

(hint, if you really want a system for £2k, go on the course yourself, approve your system yourself, neither the ROC certified courses nor the PART P certs for electricity working is impossible for your average GCSE school leaver to get -and you'll save yourself about £6k -probably not quite that much as you'll still have to buy rubber stamped more expensive panels).

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Unhappy

Re:- price still the blocker

Here in the UK, Solar is still not achieveable.

Quite simply - until full installs cost £20,000 not £2,000 (the uk climate makes this a risky proposition, compared to sunny climates), we're really not interested.

We - as a nation - would still rather fork that amount on extensions, patios and conservatories.

A shame - I've got £2k here for anyone that can fit me a grid-linked 1kw PV system, on a east coast, south-facing Central Belt Scotland home. Some sensible prices for vertically-drilled geo-therm would be nice too...

Fixed it for you.Good point though we are being ripped of as usual £20,000 is taking the piss.

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ql
Bronze badge
Pint

I envy you your consistent sunshine

We're off-grid here in north west Scotland, where we know someone who has recently installed a 2.1kW solar system, which makes him little in winter, but shedloads in summer, because of our long, and remarkably sunny days. Myself, I wish the prices of solar PV would reduce so that I can add to mine. We built our own system with no subsidy and we do not take up the feed-in tariffs which we might have done had we had the system installed, at nearly three times the cost, by an accredited installer. I'd agree with you that prices generally are coming down, but here in the UK< the NMCS accreditation of /equipment/ has meant an incredibly expensive (£75k - £100k) process per device to get accreditation, without which FITs cannot be paid. The result has been a dramatic increase in prices. Battery pricing seems to have been largely constant.

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Unhappy

Locally (Mid-Atlantic USA)...

Home-unit installation costs still over-balance benefit. A typical 1.5KW system here has a payoff in the 20+ year range. Between relatively high latitude, and entirely too many clouds interfereing with the sun, we're still marginal for solar.

Industrial-sized plants are begining to pop up, but home uptake will continue to lag so long as the payoff remains elusive.

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Gold badge
Happy

Sounds like solar thermal *much* more useful in the UK.

Not profitable

Useful. As in supplying warmer feed water to central heating or hot water systems.

Just an impression.

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Not profitable

>>>>>>>>>>>>>>>>>>>>>>>>>>

Sounds like solar thermal *much* more useful in the UK

Not profitable

Useful. As in supplying warmer feed water to central heating or hot water systems.

>>>>>>>>>>>>>>>>>>>>>>>>>>>

I'd agree. When I've worked out payback periods, it's mostly been north of 15 years. With reasonable assumptions. By which point, you're probably going to be looking at replacing equipment.

However, that assumes energy prices not rising massively, which they will. So that brings the calcs back the right way.

Personally I'd only consider installing solar-thermal on a new build (as if I had the cash to build a house!). I'd love to see some figures for air source heat-pumps though. But I don't believe solar PV will work in Blighty for years - I'm no expert on improvements in panel efficiency, so could be wrong, or this could change.

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Solar thermal

Solar thermal is not that expensive to retrofit, and it delivers benefits that are almost immediately felt. Using solar-heated water in under-floor heating reduces your heating bill immensely (especially if you leave it running 24/7 at a reasonable temperature to warm the environment through from bottom up), or using it in a secondary heat cycle to heat your water (granted, it requires you to have a hot water tank) means you don't immediately need a combi-boiler, but can get away with running your old boiler system.

For a large family or a large property, the savings can be sizable, it's just that not many people realise that with energy bills going into 4 figures a year, a good-sized investment pays for itself in 7-10 years, and with reasonable maintenance will be able to continue delivering benefits for 30+ years (my father installed a really basic solar thermal system in the early 80's and for a family of 6, the benefits were very obvious after installation).

On a side note, Castle Howard installed a ground-source heat pump system that used the heat gradient between ambient and their large pond that reduced their heating bill from around £40,000/annum to a sixth of that figure (Google this story, it's brilliant). Although the cost of the system was high (£160K), the savings over the 5 years following pay for the system, and also have ancillary benefits (like not having to restore works of art as often as before).

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Solar PV

Solar PV will only become really useful if your building is in an ideal position with the right pitch. Someone in North London has managed to remain mostly off-grid with his solar power investment, but I can't find his blog anymore.

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Bronze badge
Unhappy

Solar thermal not that brilliant

The trouble is, a large installation provides loads of hot water in the summer when you don't need it unless you have a swimming pool, and a small installation gives you hardly anything in the winter - it doesn't really help much with heating. Yes, it's more effective in underfloor systems but those are so slow to act that there is a big efficiency penalty if your house isn't super-insulated or constantly occupied. Unlike electricity, you can't export the excess, and it's harder to change your consumption patterns to take advantage of it. Yes, you can store it more practically than electricity, but even that requires huge heavy tanks which aren't often practical in existing buildings. In theory you can harvest energy from sunlight much more efficiently than with PV panels, but in practice there are lots of negatives. It's also heavier and harder to install than PV and vulnerable to freezing if not maintained properly. That's why I haven't installed a system.

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Bronze badge

Solar panel positioning is not that critical

It's a sinusoidal drop-off from the ideal position - the gradient is shallow either side, so exact positioning is far from critical. They say "south east to south west" is fine, as well as a surprisingly large range of pitch.

If you have a flat roof, the panels will be mounted on a frame which will automatically have an ideal pitch and orientation, so while there is the cost of the frame/fixings and possible wind loading and planning implications, flat roofs can be good sites.

Even if you mount the panels vertically, on a south-facing wall you only lose 30% of output from ideal, and large-scale wall installations are considered viable.

There is one fly in the ointment with PV panels though: shading. A small amount of shade has a disproportionate effect because the cells interact. So while general roof muck on your panels will only reduce the output by 6%, clean off those bird droppings.

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Happy

That's why you run underfloor heating 24/7 with solar thermal

Because it takes a reasonable time, and in winter you definitely would want it to run 24/7 to ensure the room warms through from bottom up. We feel temperature drops at our extremities first, so if you keep your feet warm, your brain believes it's warmer.

And yes, it does require you to have an accumulator tank. Imagine that... hot water in summer without ANY use of gas to run your boiler, and on those miserable days in summer where it suddenly feels like autumn, you *still* have enough to keep your property warmed up.

Freezing is only a problem if you use WATER to circulate between the panels outside and your tank inside. Glycol does not have that problem. And it does not have to be massive... thin panels work just as well. :-)

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