DECC launch FIT review

[Gavin A]

did I really just hear Leonie Green on the news saying that pv would now have a 13 year payback?

That's really not the message we need to be getting out there, what needs to be being said is that for high daytime energy users it's still very viable with 8-10 year paybacks possible due to the reduced pricing.

Are STA still using the flawed financial model that doesn't include any allowance for RPI / energy price rises?

 

[whinmoor]

Sorry to break up your monologue, Gavin!

BBC report about likely local impact: Yorkshire and Humber solar jobs threat over subsidy cuts - BBC News

I'm sure the same is true in other regions.

 

[Gavin A]

That report kinda highlights the problem

Homeowner Dan Andrews had the solar panels fitted at Christmas and said he would not have paid almost £8,000 for them under the new tariff."We wouldn't have done it with the changes being brought in," he said.
"It's a big investment over a long period of time and it's not worth the risk when the payback could be in 15 or 20 years time."

Shouldn't really have been paying £8k in the first place, but the figures will stack up a lot better if it's more like £5k.

We all know that most customers won't look at payback times above 10 years, so we presumably all know that we have to cut our pricing and adjust what we're offering customers to the point where the payback time is back in the 8-10 year range, same as we did in 2012.

For sure there will be some customers that it just won't work for, but there will still be many that can get those sorts of payback times and returns, and I'm unsure what this last flurry of publicity was aimed at achieving.

 

[Worcester]

The Dom RHI is based on 7 years as that is the average home ownership period.
in practice our customer base is made up of people moving into a new house either to build their family nest or to retire to, and so see themselves there for 15 years.

 

[Gavin A]

The Dom RHI is based on 7 years as that is the average home ownership period.
in practice our customer base is made up of people moving into a new house either to build their family nest or to retire to, and so see themselves there for 15 years.

even if they do, they'd generally want to see that they'd be into profit on their investment well before they thought they might be moving IME.

 

[The Solar King]

did I really just hear Leonie Green on the news saying that pv would now have a 13 year payback?

That's really not the message we need to be getting out there, what needs to be being said is that for high daytime energy users it's still very viable with 8-10 year paybacks possible due to the reduced pricing.

Are STA still using the flawed financial model that doesn't include any allowance for RPI / energy price rises?

The figures are based on those used by DECC. This is one of several more positive stories put out to pre-empt negative stories in the press. Journalists have been requesting contact to report on job losses etc, which no one wants to participate with, it won't make things better. See here for what STA have been trying to acheive:

Solar still a good option despite subsidy cut and VAT hike, says industry | Environment | The Guardian

We have has the EST quoting a 20 year payback under the new rates, so Leo's comments are in high contrast to this.

What a pay back period is depends on how you calculate it, and there is no given standard. I use a full DCF which gives a longer but more realistic period. I will maybe have to stop doing this.

We need a load more bad news of Government failure, NHS crisis, international crisis to bury the changes and allow us all to move forward.

 

[Gavin A]

Not much point still using DECC's figures, the deed is done now, the task now is to support the solar industry and get the message over to the public that solar is still viable. DECCs £6k figures were out of date when published, and I doubt we're going to be doing anything over £5k for 4kWp now, which instantly drops that 14 years to 11, but surely better to give the example of high energy users where payback can be as low as 8-9 years still at the lower pricing for good situations rather than giving a 14 year payback example.

I think I'm going to have to work up some case studies / examples to show how viable it still can be in different situations.

The Solar Trade Association said solar was still attractive even though the payback period for an average system – costing about £6,000 – would now be about 14 years, up from eight years with the current incentive rates.

ETA I know STA have done as much as they can to reduce impact of cuts, and meant well with this press, I liked most of what was said, but was just a bit shocked when I heard Leonnie using these figures.