Twiiter @DECCgovuk live with Greg Barker

[TedM]

I believe that if it is simply to be a change to the tariffs then the House of Lords would not be involved as there is no need to change any legislation - just an update to the Standard Conditions which are simply signed off by the Minister of State at DECC.

I think that even a public consultation period would be optional if DECC declared that the changes were needed in extremis to comply with EU regs.

 

[MorganPVI]

At the end of the day the DECC have run the figures and decided there is no more money in the pot and they're damned if they are going ask for or allocate new money. They've also run the payback figures and discovered the returns of PV are too high and as FiT is too generous, the only way to discourage people signing up, balance the books in the current state and open to keep the scheme new entrants is by limiting demand. Therefore expect the FiT to be slashed.

If you run the numbers then a cut to 30p would be about the best possbile outcome, personally I think it could go to 25p.

 

[UK PV Systems]

I was always under the impression that there was not actually a 'pot' of money. I thought the FITs were coming from the little charge to everyones energy bill. hence why energy providers pay the customers??

if there is a fund then the government needs to seriously consider its options and not take drastic cutting measures just because how successful uptake has been. A better method would be to cut the FIT down year on year starting from March as previously set out, but be more dynamic compared with uptake in that year and system cost. that way ROI etc and payback will stay fair.

or

First come first served kind of thing for example batch of 1MW at highest FIT then next batch 1MW installs will qualify for next band of FIT etc etc...

Green Deal will fall flat on its face before its even begun due to customer and industry perception, if they slash the FIT too much.

 

[TedM]

Whilst the cash for FiTs does come from a small levy on all electricity customers, the budget for the total amount is controlled by DECC under strict HM Treasury rules (explained here - http://hm-treasury.gov.uk/d/control_framework_decc250311.pdf )

The announced budget figures for FiTs were in the DECC fast track review consultation document - http://www.decc.gov.uk/assets/decc/...ts-fast-track-government-response---final.pdf - bottom of page 4.

The total spend allowed for 2011/12 is £80 million and £161 million for 2012/13.

 

[Graeme Harrold]

Reading this Im glad Im an electrician first and not relying on installs......not good reading

 

[nbown]

I'm i correct to understand that this is only for new installs?

 

[SolarCity]

That's right. Current installs will be locked in at the current rate.

Installs carried out between September and the end of December will be considered the golden bunch of PV installs. Houses with these systems on their roofs will be worth much more when they come to sell, I'd imagine.

 

[nbown]

That's right. Current installs will be locked in at the current rate.

Installs carried out between September and the end of December will be considered the golden bunch of PV installs. Houses with these systems on their roofs will be worth much more when they come to sell, I'd imagine.

just got mine done on Saturday 3.92kw so I'm in the golden bunch now:ciappa:

 

[Graeme Harrold]

Run the figures on a system with a 25p FIT, and the prices will be driven down a bit off of the back of any changes. I dont think solar wholesale can go down much further, but I dont think the cuts proposed are total gloom and doom as first thought.........

 

[SolarCity]

We've run all sorts of scenarios through our software. A 25p FIT will be an utter disaster. Just who is going to go for that rate when they can have it done now at such a higher rate? We think that a huge hike in electricity prices is the only thing that will save the industry. 2012? A write off.

 

[furrypants]

I've worked out that a £11k system @ 25p (4kw) would have a break even point at 9.5 yrs instead of 43p @ 6.5 yrs.

I think the goverment will look that people are getting systems installed for £8k so pay back at 25p would be 7yrs. It's the cheap nasty install systems that are going to ruin the FIT payments.

 

[TedM]

Some more food for thought.

In the original FiTs consultation documents there is included an analysis of the then (early 2009) PV installation costs and it is upon those figures that the current FiT rates are based. They also included a prediction of possible future costs.

The figures there are broken down, but I'll summarise them here.

2009 costs:
2.5 kWp retrofit - £13,250
4.0 kWp retrofit - £19,200
10.0 kWp retrofit - £43,000

Plus £1,000 every 15 years to allow for inverter replacement.

2015 predicted costs
2.5 kWp retrofit - £8,325
4.0 kWp retrofit - £10,796
10.0 kWp retrofit - £24,200

Those 2009 costs led to an initial tariff of 41.3p being set for <4kW retrofit systems in 2010 and a predicted rate in 2015 of 28.8p (for Year 6) and this was based on a likely production figure of 850 kWh per kWp per year.

So, looking at just a 4kW system and ignoring export and import offset to keep things simple:

2010 - 4kWp generates 3400 kWh at 41.3p - pays £1,404 against cost of £19,200 = breakeven 13.7 years
2015 - 4kWp generates 3400 kWh at 28.8p - pays £979 against cost of £10,796 = breakeven 11.0 years

So a possible rate for 2012 could be set at maybe 12 years breakeven against a 4kW system cost of currently around £13,000 which would give £1083 per year at a rate of 31.8p

Of course, apart from simple maths, political issues come in to play as well. Such as 'do we need to apply a brake to the current level of take-up?'

I think that's more or less a given and so the rate could be around 25 - 30p.

 

[Worcester]

@TedM

Spot on with my estimates in June when I was telling people it could go as low as 26p - 30p

 

[Graeme Harrold]

Due to local supply competition Im below £11K for a 4kW system, so makes the 43.3p even more exciting. With an install cost as mine, 25-30p rate puts payback up to the 9-10 year point...when you start throwing the electricity rates in with a FIT that low, they become more significant in the whole equation, next thing is we will be following ze Germans and have FIT payments based on self consumption

 

[Worcester]

Long chat today with one of the major installation companies. Doesn't have it's own direct sales force

They are doing hundreds of 4kWp installs for less than £8K, they can do that because they have the buying power to bring in MW of panels every month, hundreds of inverters a week and make their own mounting system. One very large well know mountain named double glazing company will be entering the market sub £8k for 4kWp very soon. - Already advertising in Scotland on TV, selling from the TV ads...