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End Of Solar Subsidies


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#1 lifemoveon

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Posted 28 August 2015 - 07:49 AM

Hey guys,

As I am starting my new build, I'm actively looking to install a solar panel system in my new house.

Then I wake up to see that the government is going to cut solar subsidies.

http://www.dailymail...ls-90-cent.html

I would still want to install one so as to reduce my electricity cost, but perhaps going for a lowest cost option that just generates sufficient electricity for my household alone.

What do you guys think of this policy and your advice for me?

Cheers.

#2 joiner

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Posted 28 August 2015 - 08:03 AM

Remember that it is possible to think in terms of "storage for non-immediate use" because (unless the family is out of the house all day - but even so) hot water is nice to, literally, 'have on tap' = thermal store.

Edited by joiner, 28 August 2015 - 08:19 AM.


#3 SteamyTea

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Posted 28 August 2015 - 08:40 AM

View Postlifemoveon, on 28 August 2015 - 07:49 AM, said:

I would still want to install one so as to reduce my electricity cost, but perhaps going for a lowest cost option that just generates sufficient electricity for my household alone.

What do you guys think of this policy and your advice for me?

Cheers.
Your best and cheapest storage option is as hot water.

As for the policy, it was wrong from the start, so a difficult question to answer.
What it does mean is that the PV industry will take a hit, with most of it closing down (along with vanishing backup). Probably not a bad thing as it was a shark investing industry. It will not affect the world price of systems as the UK was a very small player, but we will not see a halving of prices again (that would make them cheaper than windows).

As you are considering putting in a system that "just generates sufficient electricity for my household alone.", you have to think about what you mean here. Do you want to match instantaneous usage (a huge system with batteries), or match your annual usage (which is sending most of your generation to the grid).

First thing to do is to make sure you use as little as possible. As an example, I have an all electric house and my last 90 days usage was 525 kWh, or a gnats under 6 kWh/day. There is still scope for me to reduce this more, but then I hit the investment barrier (not worth investing a grand to save a ton).
This works out at £0.128/kWh. Ask yourself if is that is really expensive and worth spending several £1000's reducing.

Edited by SteamyTea, 28 August 2015 - 08:43 AM.


#4 AliG

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Posted 28 August 2015 - 08:55 AM

I am in the same situation.

My plan has been solar PV and an ASHP. I have been saying for some time that solar panels are almost at the point where they pay for themselves and here we are. It could well be a reality that they have to pay for themselves.

I have not had time to read the proposals other than the headline figure. My only comment on the proposals would be that I think the payment for exported electricity should at least be the wholesale cost of electricity, which is currently around 4p/kwh. Perhaps the argument is that without export metering and the advent of the Immersun then people hardly export any electricity so should they be getting paid.

Looking at the figures, my current 4kw system generates around 3000kwh per year. This is roughly £360 worth of electricity and £1300 in FIT payments. The installation cost was £10500 so I get a wonderful return. The best I could do now on a new system is to use every kwh I generate on a system which might cost £6000 to install or around a 6% return. However, my system just had a fault which I didn't notice for a few months. This cost me hundreds of pounds in FIT payments and extra electricity. Inverters also are likely to need replaced over the lifespan of the system. They also don't look great on the roof and create the possibility of future maintenance issues. When I add this all up it is tempting to just use gas. Today Sainsburys are selling gas for 2.1p per kwh, this will no doubt rise when the oil price goes up but is only around 20% the price of electricity. Factoring in that I could heat water using gas instead, the returns of the PV system would be somewhat lower again than I have suggested.

I think getting rid of subsidies over time is the right thing to do but the current proposal is very aggressive.

Now I have to think should I just ignore environmental considerations and get rid of my planned PV system as I am not being paid for the hassle.

Edited by AliG, 28 August 2015 - 08:56 AM.


#5 temp

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Posted 28 August 2015 - 09:58 AM

Sad but I think this makes it very unlikely I will install PV now. It would have to be ground mounted in a paddock with a footpath through it and in a conservation area. Likely we would have a battle with both planners and upset much of the village. No longer really worth the hassle.

#6 tonyshouse

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Posted 28 August 2015 - 11:42 AM

I have just done a massive system in a school,

About to do another on my house quick before they bring it in.

Anyone know if this applies to community solar too?

#7 joiner

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Posted 28 August 2015 - 02:25 PM

The filmed session of the select committee that discussed this issue is no longer available, which is a pity because it made fascinating 'television' with a fair bit of comedy.

The committee's report is here...

http://www.publicati...d/1605/1605.pdf

The interesting bit that many seem now to be unaware of, was the pv industry's efforts to get government to rationalise the subsidies, going so far as to actually ask for a cut long before the select committee hearing and which they reminded members of that committee about, much to the embarrassment of some Honourable Members present.

"16. The Department’s original designs for the scheme made take-up rates particularly sensitive to the minimum rate of return needed to attract investors. The previous Government planned to ensure tariff rates reflected cost reductions in the price of solar panels by reducing tariffs rates (‘degression’) by 8.5% per year from 2012, and not before 2012, as a result of representations from the industry. However this planned rate of reduction was not sufficient to reflect the rate at which the cost of solar panels was falling.The cost of panels had fallen 30% since the start of the scheme and therefore the current tariff rates were providing a “significantly higher” financial return than the 5% return intended when the scheme was introduced. DECC set up the solar FiTs scheme without a mechanism to review and adjust degression rates in an orderly and timely way. It urgently needs to develop a system which allows for more regular and predictable review, as we describe in paragraph 76."

#8 Triassic

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Posted 29 August 2015 - 06:44 AM

View PostAliG, on 28 August 2015 - 08:55 AM, said:

The best I could do now on a new system is to use every kwh I generate on a system which might cost £6000 to install or around a 6% return........

Now I have to think should I just ignore environmental considerations and get rid of my planned PV system as I am not being paid for the hassle.

Plus one. In addition the wife hates the look of the panels on the roof, on balance maybe it's not worth the investment or the hassle.

Edited by Triassic, 29 August 2015 - 06:46 AM.


#9 joiner

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Posted 29 August 2015 - 08:43 AM

You're aware of Jeremy's installation as "part" of the roof?

And for visitors, see also...

http://www.ebuild.co...72-fit-free-pv/

#10 Trw144

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Posted 29 August 2015 - 09:35 AM

It's disappointing - I planned on putting pv and solar thermal on, probably still will as I'm in the renewables business so can put it in for a decent rate, although certainly an argument the money is better spent on improved u values in walls/windows etc for most people.

Edited by joiner, 29 August 2015 - 10:21 AM.


#11 lifemoveon

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Posted 29 August 2015 - 11:24 PM

Lots of interesting points here.

I'm just thinking, if the government reduces the subsidy, will this reduce market demand which will then cause an oversupply of PV systems in the market, leading to more competitive prices?

Only time will tell.

Meanwhile, I'm still reading up on previous forum posts. Got lots of good information about PV.

At the end of this, I will make the decision about installing one assuming no FIT.

Cheers.

#12 DH202020

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Posted 30 August 2015 - 04:59 PM

I'm in the same dilemma, even though I am awaiting planning permission and could possibly build the garage before January,(fitting PV to garage) I can still only fit a PV system to the size of 1.75 kWp.

According to one quotation:
Annual FIT income £234
Annual export income 18
Annual fuel savings 160
Total combined 412
20 year benefit 9897

I'm really not sure if, not installing a air source heat pump and other goodies will make it worth the FIT payments for PV? Especially when I will have a gas connection for DHW
The PV installation costs would be £4300!!

I wonder what costs and benefits would be DIY?

#13 ProDave

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Posted 30 August 2015 - 05:22 PM

This is a dilemma I am agonising over at the moment.

I seem to have three options:

Get a system installed before the end of the year. I don't / won't have an EPC so I will only get the lower FIT rate (about 4.6p per unit) but that's better than what's on offer after 1st Jan. I'm waiting for some prices to see if that's going to be viable (i.e what will the pay back time be)

Option 2 is wait until the house is finished and install a totally DIY non FIT system, put prices of panels would have to be a LOT less than present prices otherwise the pay back time would be too long on energy saving alone. Plus self use (immersion dump, battery storage etc) would have to be spot on.

Option 3 that I am now seriously considering is when we eventually get a buyer, decommission the existing FIT system on our present house and re install that as a non FIT system on the new house. That will be no different to option 2 other than no capital cost so pay back time is not an issue.

Option 3 all depends on whether a buyer recognises the value in the existing system on the existing FIT and makes an offer for it, or regards it as a carbuncle on the roof and is happy for it to be removed.

Until we actually find someone that wants to buy the house we can't even think about that option, but it has hardened my view that the present system on the original high FIT rate is a valuable asset that should be recognised in the valuation of the house.

#14 temp

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Posted 30 August 2015 - 05:44 PM

It should but I'm not convinced. We sold a house a not so long ago that had PV installed on the roof at the original peak FIT. Sad to say not a single potential buyer showed any interest. None asked what rate the FIT was or what the annual income was. It was rented out for awhile and even tenants didn't care. They failed to notice it had tripped it's breaker and been offline for many weeks.

#15 Nickfromwales

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Posted 31 August 2015 - 06:53 AM

View PostProDave, on 30 August 2015 - 05:22 PM, said:

Option 3 that I am now seriously considering is when we eventually get a buyer, decommission the existing FIT system on our present house and re install that as a non FIT system on the new house. That will be no different to option 2 other than no capital cost so pay back time is not an issue.
If you lose the system and the FIT payments when you move out / sell on and the new house owner both values and inheritors it, and they agree a premium for it which you'd include in the sale of the house, what figure would you have in mind to be willing to leave it in situ? Also how old is the existing system?
If its not absolutely brand spanking new then most potential buyers would probably see it as a ticking time bomb before they saw it as an asset, especially the unwise :(.
Have you included the amount of revenue that the PV generates in the sales patter for the house, with the actual £'s figure rather than kWh ? Can't help thinking a lot of house sellers don't market the PV properly, eg showing that if they had a mortgage for x amount per month, then show the deduction for the PV income ( after expected outgoings like a new inverter every 10 years ), therefore showing how much sooner they'd pay off their mortgage with the PV / how much less they'd need to find per month. That's got to have kerb appeal IMO.
Also what about installing a minimal cost FIT system to the new house and then adding panels to it later in life when the market price drops in line with FIT payments fading out. Would you have to sneak those on under the radar of the grid and PP? Could you?
A proper quandary this one.
Regards, nick.

#16 ProDave

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Posted 31 August 2015 - 07:17 AM

I have created a solar PV fact sheet to give to potential buyers that details how much is paid for electricity generated, with real figures from it's first 3 years, and a projection of the likely income over the remaining 22 years of the FIT contract.

I point out the income is more than you would get from a new system installed now and for a longer period (a new system would only get a 20 year contract, this still has 22 years to run)

I also point out on a much more fundamental level, the income for the solar PV pays for your electricity usage, so in much simpler terms, you have no electricity bills for the next 22 years. Surely most people can understand that?

On the basis there's at least another £16K of income to come from this system if left to run I would like to see at least £3K for it.

If it really does come down to the buyer not putting any value on it, then sod them it comes with me and they get nothing. Because of other housing related events that I had a rant about before, we are not actually in a particular hurry to sell now, so i have time on my side to hold out for a decent offer for the house, I am not going to give it away at bargain basement prices.

The reason I'm feeling very fed up with this situation and starting to get hard nosed about it, is I now fully predict our new, low energy house is going to cost MORE to run than our present old ordinary house, simply because it looks like I am going to be denied things like solar PV on a FIT at the new house. It's almost feeling as though building a new modern low energy house is becoming a waste of time and I would just be better staying here. It's turning into a very unsatisfactory situation.

Edited by ProDave, 31 August 2015 - 07:56 AM.


#17 lifemoveon

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Posted 31 August 2015 - 07:59 AM

Hey Dave, I do think that perhaps you could hold out. Unless the buyers are already offering you a premium for your house and that's why they are not offering to pay for the solar system.

To the rest,

I'm reading up on this and am thinking how does this work. This is my understanding and it would be great if guys here could validate them.

1. The solar PV generates electricity during the day.
2. The electricity does not get stored (unless you buy one of those electricity storage system). They are either used (on the spot) or they are exported onto the grid
3. Here's where I'm trying to figure out - so what happens at night when the PV don't generate electricity? How does that work? Does the utility company net off the energy i use at night vs those I exported in the day? Is that by unit (kw) or by amount (£) considering the difference between day rate and night rate?

As i'm working through my house design with my architect, I'm thinking of specifying a solar PV system. However I still can't quite get my head around this. My idea right now is to build a house to passivhaus standard (air-tightness), put in a solar PV system to power the water boiler, MVHR and daily use, save money installing a heating system.

Cheers.

#18 ProDave

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Posted 31 August 2015 - 08:11 AM

At the moment, you get paid the FIT for whatever you generate (even if you use it yourself)

you also get separately metered for what you import.

So in the most simplistic form if you don't have any solar PV storage options, you export power in the day and get paid for it, you import power at night and you pay for it. the two roughly balance so the result is free electricity.

Fast forward a year or two and no FIT (or not FIT worth having):

you generate power in the day and export it, you get squat for it. (the electricity companied are rubbing their hands at the free power you are giving them) you import power at night and pay for it.

So NON FIT solar PV can ONLY work if you actively make sure you use all your self generated power and export virtually nothing. That mean solar PV hot water storage, using all big appliances like dishwasher, washing machine in the daytime, and quite probably some battery storage as well.

I came across this rather ironic piece of verbal diarrhoea http://www.solarpowe...revolution_3425 I wonder if the author of that lode of tripe now has the decency to resign her job?

Edited by ProDave, 31 August 2015 - 08:12 AM.


#19 lifemoveon

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Posted 31 August 2015 - 09:05 AM

Wow!!! Fantastic article Dave. Thanks so much.

So i guess if I want to install a solar PV system, I need to also install a storage system.

Am now thinking, is this worth it? £5K for installation I've read somewhere. So if my electricity bill is £40 a month currently, I would need a payback of 11 years.

Cheers.

#20 recoveringacademic

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Posted 31 August 2015 - 09:25 AM

View PostProDave, on 31 August 2015 - 08:11 AM, said:


Fast forward a year or two and no FIT (or not FIT worth having):

you generate power in the day and export it, you get squat for it. (the electricity companied are rubbing their hands at the free power you are giving them) you import power at night and pay for it.

So NON FIT solar PV can ONLY work if you actively make sure you use all your self generated power and export virtually nothing. That mean solar PV hot water storage, using all big appliances like dishwasher, washing machine in the daytime, and quite probably some battery storage as well.


Thanks for putting it so simply.