back to article UK.gov marches on with solar 'leccy cash slash by spring

If the Government loses its appeal against a High Court ruling on its plan to reduce solar incentives from December 2011, then it will apply the reduction from 3 March 2012, it has said. The Department of Energy and Climate Change (DECC) has confirmed the contingency plan it is putting in place if it loses its appeal against a …

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WTF?

"multi-million pound tax revenues generated by solar firms"

Remind me again why there is a subsidy?

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Anonymous Coward

Subsidy...

The government has chosen this as a market they want to encourage, so the subsidy is to kick-start the market. If you subsidise the early installations, the price reductions due to volume installation/manufacturing will kick in much more quickly.

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Happy

The solar firms are raking it in because of the subsidy. Punters pay for the kit out of their own pockets to the solar firms, the government pays the punter for the electricity his kit generates. Pretty much two independant pots of money. With the reduced subsidy not so many punters buying the kit....

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They should just get market rates for feed-in

Anybody who invested in this scam at the expense of ordinary bill-payers deserves to get their fingers well and truly burned.

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Interesting to note

The use of the words "smaller schemes" in relation to the reduced rate - a cynical mind might wonder if the cuts are to be mainly focused on the little installations? Any chance of more detail on this angle from El Reg or Out-Law?

(for my 2p worth they should scrap all the solar subsidies anyway so I'm not sure why I'm bothered, it just seems a bit shady to be playing favourites with the handouts.)

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Happy

@ auburnman

Larger schemes get a smaller subsidy than the under 4 kW ones already. I think they're cutting both, but it's less of a political issue, because those aren't the type of installations that individuals stick on their houses.

The subsidy was clearly set way too high, as can be proved by the fact that solar companies were giving the panels away for free, including installation, in exchange for the whole lifetime Feed-in-Tariff. The customer then gets to keep whatever energy savings they make.

To be fair, this may have been a technical issue, rather than the actual subsidy rate being wrong. There was no method in place for metering the leccy that a solar installation put back into the grid, so a fixed rate is assumed, and that's what's paid as the FiT. It may be that larger schemes are properly metered, in which case the subsidy might make more sense, though I doubt it.

In my opinion, photo-voltaic isn't worth subsidising in this country. Nor is wind. If we're going to subsidise then it should be, heat pumps, solar-thermal, rainwater harvesting - and then maybe rubbish incineration, Combined Heat & Power (mini gas turbines), and various methane schemes. I've not seen figures for the maybes, so I'm only guessing. I don't know much about geothermal. Then it's a case of making coal and gas pay the cost of their pollution (carbon trading and/or carbon capture), and seeing if that makes nuclear look cheap.

Anyway, what have we got to worry about? Nuclear fusion is only twenty years away...*

*[insert smiley face of choice]

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Interesting to note also

The use of the words "the charity" in relation to political activism.. Isn't it time to declare these "charities" as political organizations?

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Perhaps we need to change the rules

This kind of consultation is silly. We all know that the ministry in question has made it's decision. And as far as I'm concerned they've got the democratic legitimacy to do so. We can vote them out if we don't like it. So I don't see why anyone should have the right to take them to court on a technicality, which is that they haven't 'consulted properly'.

We get too many pointless judicial reviews in these circumstances, where all that happens is the same decision gets made again, 6 months or a year down the line. Meanwhile everyone's wasted a lot of time, effort and legal expense, pissing around.

However, the ministry have also been colossal arses for announcing their decision, and putting in place the timing, before they'd even finished taking submissions on the review. That's just arrogance, laziness and incompetence.

Is there anyone I haven't been rude about yet? No? Then rant over.

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Voting them out

This democratic right to vote out politicians in government/parliament is only granted to the populice once every four years (or five). Plenty of damage can be done in the meantime.

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Headmaster

populice?

What a great way to refer to the Great Unwashed!

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This post has been deleted by its author

Wolf!

The big problem with this is not the reduction in FIT, which I think everyone agrees is probably a bit high. The problem is the way it has been done. There is a system in place for annual reductions in FIT rate. The government could easily have said that this years reduction will be larger than previously announced because solar PV FIT is so successful that the price of installs has gone down. Nobody would have complained and it would be a success story. People would decide if it was still worthwhile and not bought solar PV if it wasn't. Instead it appears that the government might reduce the value of these very long term investments on a whim with no notice.

Let's say you are thinking of installing a ground source heat pump say (I was) and relying on the RHI to make it a good/reliable investment rather than a bit of a punt that might lose you your pension (I was). If you think the government is likely to cancel the RHI/FIT in the period between paying for the installation and getting it certified (it takes at least 12 weeks if you need planning) then you just aren't going to bother with the hassle of doing it.

Better to invest in Italian government bonds instead. Much better return at over 7%. After all, if Italy reneges on it's debts it's zombie apocalypse time regardless of my pension plans.

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Mushroom

From another angle.

I think you are correct, but looked at from another angle.........

The FITs were set in place to kick start the manufacturing/install base so that the costs came down sufficiently for it it be a viable investment. Yes, they are using Taxpayer's money to subsidise, but the whole business whas never going to take off without it.

I think that most people would agree that if the costs come down low enough that everyone can afford to fit these panels, make/save money and also reduce emisions it can hardly be a bad thing.

However, I think that the problem is that the manufacturing/install costs have come down, but still not enough to make it financially viable without large FITs. The cuts in FITs the Government are proposing are too big to keep this kick-start going so the whole new infrastructure is going to fall over.

If that happens, all the government has done is to use taxpayer's money to subsidise those with 10-15k and a house roof to spare (and even then I did not think the finances stack up for it to be anything other than a long term (over 15 years) investment, with inherent risks that the maintenance/repair costs would kill any profits.).

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Holmes

The trouble is wuth this...

"The FITs were set in place to kick start the manufacturing/install base so that the costs came down sufficiently for it it be a viable investment"

.is that they never ever will or can be a viable investment.

Cynical moi thinks that in fact the whole plan was to have so many people employed in 'green technology' that the thought of cutting the drip of public money would be as inconceivable as - er - destroying the British coal, iron, steel or car industries...

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@Peter - Sort of but not entirely.

Go back 15 months or so, and the FiT was 41.3p/kWh. A 4kWp system was about £16000-£18000. That gave a payback in 15-18 years which was nice, because anything after that was your bonus for being an early adopter and helping to kick-start the govertment's chosen renewables industries.

Now you can put 4kWp on your roof for £8000-£9000. So the FiT has dropped to 21p - that's actually a good number for it to be at. It keeps the payback at a similar rate to what it was before, and you still get a (smaller) bonus at the end for being a not-so-early adopter.

I've spoken to installers who've said that the 21p is not a terrible rate (though generally 25p is regarded as more sensible), but it's the suddenness with which this bomb was dropped that's the problem. If the rate had dropped in April 2011 by 5p (instead of going up by 2p), then again by 5p in October 2011, and then again in April 2012 by 5p it would have been down to 26.3p/kWh, would have saved a big pile of billpayers' cash, would still have given an excellent ROI, and would have not been a kick in the balls for the honest businessmen who're trying to make this their career. (No, I don't include double-glazing salesmen; I had a price from SafeSeal for an installation, and I felt they were taking the piss charging double what I could find from a specialist installer.)

The legal argument is that the rate was changed before the consultation period was over. That's where the government has caused itself problems. If they'd had the rate change scheduled for a week later they'd have kicked the installers just as hard, but because the consultation was over there's nothing that could have been done. (Or very little, at least.)

Nope, I'm not in the PV industry, I've just chatted to a few people who are. And most of them are honest people just trying to provide the best service they can.

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Wind

While they are at it they should also cut out the subsidies for all the useless wind mills. This would force the owners of said abominations to look at the commercial viability - or not, as may be.

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Anonymous Coward

Pedant alert...

There is no FIT for windmills, they don't generate electricity, they mill grain.

If you were talking about wind turbines, that'd be a different matter...

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What a waste

Renewable electricity in the most part is the process of farming subsidies ulitmately paid by the customer or tax payer. The solar scam is even worse where the entire cross section of customer s pay for those rich enough to afford solar panels (or at least own their own home) to get a guaranteed return on investment not available to less well off customers. The installers have being making mint and now everyone is crying because the gravy train has come to a halt.

Still at least solar is small scale, biomass burning power stations are just coming online to show how real industry can milk subsidies on a monumental scale.

We should be concentrating on cheap energy during these economically challenged times to help the recovery not pushing up energy prices in some form of national hari kari.

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Terminology problem

Maybe a little pedantic, but important nevertheless. The article mentions that "rates will apply to energy generated by solar photovoltaic (PV) installations which generate up to 4 kilowatt hours (kWh)"

If this were the case we would be stuffed part way through the first day of generation :-). It applies to systems that generate up to 4 kilowatts peak kWp, a measure of the maximum theoretical generating capacity of the installed system.

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Not pedantic at all

It's a pretty basic mistake - do try to learn the difference between power and energy!

Also, this bit is wrong:

"solar FiTs, which provide a financial incentive for surplus electricity generated from renewable sources that is transferred back to the national grid"

They don't provide a financial incentive for surplus energy, they provide a financial initiative for all energy. The overwhelming amount is paid for what you generate, and even the extra bit which is supposed to be for what you export is not metered in small-scale systems: it's just estimated that you export half of what you generate.

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Anonymous Coward

Depressing lack of understanding of the facts

Is it just me that finds it depressing that neither the original author, or any of the commenters so far, seems to understand what the Feed-In Tariff actually is!

The Feed-In Tariff is *not* the money paid to someone for selling their surplus electricity back to the grid, as is claimed in both the original article and various comments.

The Feed-In Tariff (which I concede is badly named) is a payment made to the owner of an electricity generating system (solar, wind, etc) for every single kWh of power their system generates, irrespective of whether it is used onsite or exported back to the grid. This is currently around 43p per kWh for a small domestic installation, and it is always metered.

There's then an additional payment for exported power, which is currently around 3p per kWh. This is an open unsubsidised market rate and exporters can choose who to sell their exported power to. Often on small installations this exported power is estimated (it's assumed to be half the total amount generated) because the size of the export payment is so small - a few tens of pounds per year for a typical domestic installation - that it doesn't justify the installation cost of an export-capable smart meter.

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Every solar panel I've seen has been fitted to larger properties and the more wealthy in society. So this has been benefiting the well off not the average house hold.

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Anonymous Coward

Your point?

I don't understand your point: You seem to be suggesting that poorer people should be able to pay multiple for a solar PV installation out of disposable income they don't have because they're poor? These systems aren't free, you know.

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Pirate

His point

It was all just another government scam to give tax money to middle class people in a crass attempt to buy their votes - just the same as scrappage and the leccy car subsidy.

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To be fair to the rich buggers

Most of the people I've sold solar-thermal to, on private houses, seem to be doing it out of ideology. At least as much as they're doing it for financial reasons. Admittedly you still have to have the cash to buy the kit in the first place. The financial argument has tended to come in, when you start arguing over solar-thermal, PV or heat pumps.

I suspect that's not so much the case with the schemes where you have a set of panels fitted for free, in exchange for agreeing to hand over all the FiT payments. I've seen the adverts and even been cold-called (at work) about them. Not sure I'd trust many of the companies involved though.

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Anonymous Coward

@Colin Millar

Yes, I've noticed the government falling over themselves to give money to me, oh hang on, no it's me as the higher rate tax pair who is funding the service that those poorer than me use. Now, I happen to think that this is the correct state of affairs, but this doesn't mean that any tax breaks that the government are an attempt to buy my vote. I actually know more poorer people who benefited from car scrappage than richer. The richer people had already bought that new car, the poorer ones didn't have the money, until the scrappage scheme came along.

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Look..

If people want to make ideological statements, let them do it with their own money, not mine.

Small scale generation is a huge waste of time anyway - its pure knee jerk politics of the worst sort making people think they are doing something when they are not.

Politicians have cherry picked technologies, not because they demonstrably worked, but simply because they are available and fitted a 'green narrative' ... on closer inspection they do little or nothing of any benefit whatsoever and at a huge cost to society as a whole (though considerable profit for those engaged in them).

It is to the credit of this government that despite the wacky speedfreak in charge (notionally anyway) at DECC they have inspected these things more closely. And decided they are a waste of investment.

Let's hope that smart meters and wind farms go the same way.

There is a perfectly respectable technology that works, is cheap and generates no CO2 whatsoever and can replace all the coal fired stations if it is allowed to.

Spend money on that instead.

I can buy 10-15 'green tariff' electricity plans. Why cannot I buy a domestic 'all nuclear' one?

Is it because the actual prices involved would mean everyone signed up for it?

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Ideological, you say?

UK 'subsidising nuclear power unlawfully' - http://www.bbc.co.uk/news/science-environment-16646405

The government is apparently capping the nuclear industry's liability for accidents - so the tax-payer foots most of the bill. If this cap wasn't there, it would apparently double the cost of nuclear-generated electricity

I don't have strong opinions either way on nuclear power, but to complain about subsidies for solar if the above article is true seems rather ironic. Like you said:

"If people want to make ideological statements, let them do it with their own money, not mine."

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Angel

I am not sure that the amount of energy involved in the production of the facility, transport and disposal of the fuel and decommissioning of the plant make nuclear quite as zero co2 as they would first appear.

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FAIL

@bobbles31: Okay....

I would like to see the CO2 per MWh output figures over the life of a windturbine - including the effective cost of removing the 20 tonne concrete block at it's base and removing the lime that has leached into the soil/watertable.

Then compare it to the CO2 cost of nuclear per MWh that generates over it's life.

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@handle

I would take the figures from that pressure-group with more than a pinch of salt to be honest. Doubling the cost ? When was the last time we had a large nuclear accident to claim insurance for in the UK that the government had to underwrite ?

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Rhetorical question

The answer to your question is "never", of course, because the question is fatuous.

By your reckoning there is no risk, so the cap on liability is pointless and therefore removing it will make no difference. If you are confident in your assertions you should agree that the anomalous cap should go, because it won't result in a rise in the price of nuclear electricity. Trust in the market to decide.

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Only as fatuous as the reply. I never stated there was no risk, it was merely an illustration that the risk is not a high one and it is pretty difficult to work out where the figure of doubling the price per unit of leccy has been plucked from. Of course, if you are an expert in insuring nuclear power stations then I'll concede.

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My God. It's full of dumb!

I actually started reading some of the Energy Fair bumf.

They are complaining that because the Carbon Floor Price will push up the wholesale price of electricity (it's a tax on fossil fuels used in generation) then Nuclear will benefit. The price it can sell for will go up. That's a subsidy apparently.

They are outraged that the fuel for nuclear power, Uranium, won't be increased along with coal and gas. I think the point of the name Carbon Floor Price seems to have been wasted on them.

So that counts as a subsidy for nuclear power. The more sharp-eyed amongst you may have noticed that it will also 'subsidize' renewables. That's OK apparently.

So, in all, they're a completely unbiased outfit.

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I thought it was quite simple

If you reckon the risk is not a high one, and so the "subsidy" resulting from the cap on liability is grossly exaggerated by these people, then it won't matter to the nuclear industry if the subsidy is removed, will it? By slagging off their figures and yet not agreeing that the cap should be lifted you are contradicting yourself. That's not fatuous - that's logical.

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Not at all

I haven't found anything in their figures relating to the insurance risk so can't comment on it either way. Why not comment on the carbon floor 'subsidy' ?

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