Phase Two Consultation

[The Solar King]

Tend to agree with you moggy

In my first post, suggested introduction of Export meters for existing customers at reasonable cost (not an obstructive one). Last post is still based on deeming at 50%.

I think Barker is a bit of an enigma as to where he really stands on SSEG and solar. Within the big picture, the lack of a cohesive Energy Policy within the UK does not help. There are a lot of competing pressures and the invidious influence of the big 6 with their embedded presence in DECC is detrimental to anything that is not in their interests. We do face a problem of what appears to be a lack of political will to deal with the big 6. They threaten energy shortages at every turn if they do not get their own way. I believe the time will come when people will view the scandal of what is happening in DECC in the same light as phone hacking/News of The World/Rupert Murdoch and undue political influence. However, by the time everyone is saying I told you so, it will be too late for us.

We need to continue to make as much noise as we can and create as much political discomfort as possible. This is what has got us the meagre scraps we have left in FITs. If you believe in the industry and want it to have a future, we have to fight on, what ever the odds.

 

[Gavin A]

Gavin

Having spoken to Seb, you are right in your analysis. The problem is DECC are using the low cost scenario as the basis of their deliberations.

Thanks, but having worked through the entire consultation document and supporting documents I don't think that's really an accurate statement.

All the reductions in FIT rates are based on the mid range scenario of prices, which to me seem relatively realistic.

These have been modelled on central assumptions about cost reductions over
the next three years

The point Seb was making about the lower cost scenario figures related purely to Barker's pronouncements about the number of installations, and industry jobs that were still expected after the cuts. Seb was correctly pointing out that these figures were taken from the analysis of likely uptake under the low cost scenario only, and that the minister ought to be using the medium cost scenario figures when making such statements as the low cost scenario is unlikely to be realistic.

So Barker was wrong to be spouting the predicted figures in the way that he was, but these aren't the figures they'd used to base their actual cuts on, so it'd be counter productive to focus too much on these figures in any response to the consultation IMO.


For reference purposes, the medium cost scenario predicted figures for a 2kWp installation are as follows

£6,333 Jan 2012
£5,001 End 2012 (21% reduction)
£4,369 End 2013 (12.6% reduction)
£3,989 End 2014 (8.7% reduction)
£3,751 End 2015 (6.0% reduction)

I don't have a crystal ball for prices several years ahead, but we're already offering the end 2012 prices for 2kWp systems on our cheaper range, and I don't see these figures as being completely unrealistic, at least nowhere near as much as the low cost scenario figures.

The low cost scenario figures however are a complete fantasy.

 

[The Solar King]

Problem is if £5100.00 is the price used (and I'll assume it excludes VAT), the tariff rate is critical. At 16.5p +1.5p export, payback based on 35% self use of electricity, 3% inflation and 5% electricity price inflation, is in the order of 23 years using NPV with a return of 5%. If you zero inflation rates, it may only just break even in the life of the equipment. Neither of these is a proposition attractive enough for a customer to purchase. This is based on SAP 2005 irradiance and an unshaded south facing roof. The only way people will buy is through ignorance or mis-selling.

At 21.0p + 1.5p export it breaks even in around 18 years.

There are a lot of variables come in to play with regard to viability. eg overall consumption in the property and load profile - this affects the percentage of own use of power, and more importantly geographic location. A FIT system designed for unshaded south facing roofs in the home counties is f-all use.

It comes back to the political will to have a viable system with proper recognition of the contribution PV can make to energy provision and recognition of the economic contribution the industry makes. Whilst not being very optimistic of this there is opportunity if we take it. If we take our feet off their necks for one second we are dead.

 

[moggy1968]

'I think Barker is a bit of an enigma as to where he really stands on SSEG and solar.'
Thats because he lacks the information, knowledge and intelligence to process the data he is fed.