The End Of The Solar Industry (Surprise Move)

[dgul]

Expect a stampede into solar amongst boomers into solar now so as not to miss the boat.

Just heard from two who are taking the plunge. The justification is that the recent crash has damaged their investments, solar is cheap as it ever will be and it gives a 5% return.

I pointed out that the investment was sunk and you couldn't get any money back. That would be OK as by year six it would have paid for itself.

What about needing to replace the invertor. Not a problem 10 year guarantee on it and other parts.

So in that context if you need the income and don't want the money back it makes sense.

I agree that it probably is (was) a good investment provided you don't want to see the original money at any point. But again, this feeds the pensioner / boomer - a younger person can't invest in the equivalent of a perpetual irredeemable bond because they'll probably need the cash at some point.

[And I do agree that there will be a whole pile of moaning about 5 years from now when the cheaper installations (most of them) start failing.]

[The stupid thing is that prices have dropped massively in only a few years. The UK could (should?) have waited it out until about 3-4 years ago, and only then offered the subsidy. It would have given all of the advantages going forwards, but would have had relatively lower impact on energy bills]

[Digsby]

Battery technology is improving, and as others have said, that's the key. Supercapacitors are the way forward in my view, but too expensive at the moment. Combined pv and thermal too is key - cool pv panels are much more efficient, use the excess heat to heat your domestic water - there's no excuse there, it's not hard or expensive in fact I think the subsidies in pure pv have held efficiencies back in that respect.

In all honesty, I have no idea why any loss of subsidies should have any impact on the solar industry in this country except those of the installers who have been creaming it because solar must have been installed my accredited installers to qualify for grid tariffs.

Stuff them. It doesn't take much learning to install your own solar system. I did it. Ok, I'm not grid tied, I don't even have a grid, but even if I did, grid tied isn't the only option. I live half of each year on pure solar power. It's a boat not a house, I grant you. But when I do buy a house, I will be converting at least the lighting system to 24v and some of the sockets, putting my own panels on the roof with a 1kw battery bank charged from the grid in the winter.

What's all the fuss about? You even need to buy panels new, they have a 25 yr shelf life, you can buy 5 yr old panels for a fraction of new.

[spyguy]

Battery technology is improving, and as others have said, that's the key. Supercapacitors are the way forward in my view, but too expensive at the moment. Combined pv and thermal too is key - cool pv panels are much more efficient, use the excess heat to heat your domestic water - there's no excuse there, it's not hard or expensive in fact I think the subsidies in pure pv have held efficiencies back in that respect.

In all honesty, I have no idea why any loss of subsidies should have any impact on the solar industry in this country except those of the installers who have been creaming it because solar must have been installed my accredited installers to qualify for grid tariffs.

Stuff them. It doesn't take much learning to install your own solar system. I did it. Ok, I'm not grid tied, I don't even have a grid, but even if I did, grid tied isn't the only option. I live half of each year on pure solar power. It's a boat not a house, I grant you. But when I do buy a house, I will be converting at least the lighting system to 24v and some of the sockets, putting my own panels on the roof with a 1kw battery bank charged from the grid in the winter.

What's all the fuss about? You even need to buy panels new, they have a 25 yr shelf life, you can buy 5 yr old panels for a fraction of new.

Having low-voltage DC wires for lightening is probably a v. good idea.

LED lights are a game changer for household electricity.

[Digsby]

Having low-voltage DC wires for lightening is probably a v. good idea.

LED lights are a game changer for household electricity.

In a house, of course, the cost of wiring becomes an issue. 12v would be impractical, 24v entirely doable. If 48v LED bulbs were available (they might be) then that would be preferable. I feel people need to loose their fear of DC power - my panels are wired in series giving 170V DC - still far safer than 240V AC.

Edison was not an idiot.

[spyguy]

In a house, of course, the cost of wiring becomes an issue. 12v would be impractical, 24v entirely doable. If 48v LED bulbs were available (they might be) then that would be preferable. I feel people need to loose their fear of DC power - my panels are wired in series giving 170V DC - still far safer than 240V AC.

Edison was not an idiot.

Maybe.

Low V DC could be run over a pair of thin/flat copper wires, which could be stuck to the walls + ceiling.

[mattyboy1973]

Having low-voltage DC wires for lightening is probably a v. good idea.

LED lights are a game changer for household electricity.

This of course is the other side of the coin - the increased efficiency of electrical goods. LED lights are probably the most extreme example but it's true of everything bar heating/cooking stuff I guess. I guess you could just about light your whole house on the electricity that one or two incandescents would have used?

In a house, of course, the cost of wiring becomes an issue. 12v would be impractical, 24v entirely doable. If 48v LED bulbs were available (they might be) then that would be preferable. I feel people need to loose their fear of DC power - my panels are wired in series giving 170V DC - still far safer than 240V AC.

Edison was not an idiot.

I've wondered about this as well but I don't know enough about electrics to know why 12V wouldn't be practical? It seems that most of our electronic gear is running off 12V DC these days, perhaps a few 5V USB ports thrown in the mix as well. It would seem to make sense (especially running off a battery) to simply run DC round the house for these items and cut out the transformer? I guess you'd keep AC and a higher voltage for kettles and stuff?

[Digsby]

I can't remember the maths, but I guess you're never more than 10m away from the power source in a house, so 6mm wire should suffice at a guess, not put any thought into it...

[Digsby]

Between my solar charger and the batteries, which is only about 3m, I use 12mm wire, which is hard to get hold of in lengths longer than 30cm. I ended up using welding cable at a cost of £80 per metre. But that is only because of the distance between where the charger is and the bank. But wire costs increase exponentially with width is the point.

Nevertheless, it's about independance for me. Power may be cheaper from the grid, but once I've invested the money, I have it. I won't be dining in candlelight should 1970s style power cuts return. And if the solar isn't enough, I'll have a genny.

You only need a modicum of technical mindedness and a willingness to learn for yourself to deal with your power needs, is my main point, well within the capability of other posters on this forum.

[Kurt Barlow]

All that article states is that solar is not (yet) a very high percentage of the total, but that is changing.

Solar is completely viable and soon it will make sense with no subsidies at all, especially in sunnier climes and with the addition of off-grid storage. E.g. in Australia now, a 4kw rig (perhaps £6k installed) yields somewhere in the mid-teens kwh per day over the year, with a household average use of about 10 kwh per day. Solar panels are also pretty much zero maintenance and very reliable and costs are dropping incredibly fast. Personally I'd rather do it properly and go off-grid completely if I ever get a position to install it.

$5000 (2500 sterling) will get you a 5KW system in Perth which will generate about 8000 kwh per year

Even if you only use 25% this will save $540 off the bill. The remaining 75% would get 7c a unit as export ($420).

The trick is to get as much usage in daylight hours as possible ( ASHP water heaters, pool pump, washing machine, Dishwasher, car charging)

[Kurt Barlow]

Expect a stampede into solar amongst boomers into solar now so as not to miss the boat.

Just heard from two who are taking the plunge. The justification is that the recent crash has damaged their investments, solar is cheap as it ever will be and it gives a 5% return.

I pointed out that the investment was sunk and you couldn't get any money back. That would be OK as by year six it would have paid for itself.

What about needing to replace the invertor. Not a problem 10 year guarantee on it and other parts.

So in that context if you need the income and don't want the money back it makes sense.

State Pensions in Oz are subject to means testing so dumping $5000 into solar, reduces savings and increases pension by about $370 PA which is a 7.4% tax free annual return before electricity savings are accounted for.

[200p]

Entu share price down 27% this morning.

[Simon Taylor]

This is an interesting discussion. One of my companies installs commercial solar, so we fit systems onto the roofs of factories, warehouses, grain stores , chill plants etc. All our customers have high, daytime electricity demand and most recognise the dysfunctional UK energy policy as a medium to long term threat to their businesses.

In this scenario, solar works. The electricity generated is used at the point of production and very little, if any, is exported to the grid.

Our customers tend to be family owned and managed businesses. They own the freehold to their buildings and take the sort of long term view that is so depressingly absent from corporate Britain. As for whether PV is viable without subsidy, I recall a quote from the FD of a food company for whom we had installed a 200kWp system. His view was that what they had done was forward buy around 4.75 million kWhs of electricity , delivered over 25 years (the period of panel output covered by the output insurance) at a unit price of 5 pence. Those 195,000kWhs the system delivered in the first year cost 5p each compared to the 11 pence EDF required for each unit purchased from the grid. The system will deliver the same next year , each unit still costing 5p , and in five, ten, fifteen , twenty years (the assumptions are that the output declines by a few pc each in later years) Now, imagine what grid energy will cost in five, ten, fifteen years? The FDs view is that he has obtained a competitive advantage over other companies engaged in what is an energy intensive business. These calculations did not include the FiT. When these were added on, such an investment went from being commercially and strategically sensible to becoming a 'no-brainer'.

This is the sort of scenario where solar PV makes sense and we are confident that we'll still have a business in 2016. What will disappear, and in our view , should disappear, are all the investment schemes which make their return on the FiT subsidy and which saw huge swathes of council and HA estates all over the country covered in PV which made minimal difference in terms of electricity savings. We may also see less appetite for placing large field scale systems miles away from any localised electricity demand. Farmers may have to find other ways to earn a return from that land. Grow food, perhaps?

We are all for subsidies being removed completely, but not just for solar. Look closely at the long term price guarantees the government is throwing at the EDF/Chinese consortium involved with Hinckley Point. Despite this largesse, we are still no nearer generating 1kWh of electricity from this project and when we do, the cost will be staggering. Let's get rid of all subsidies and let the market decide what generation infrastructure gets built, rather than politicians.

And for all those debating whether or not hydrocarbons are subsidised, do you really believe that the first Gulf war was really fought to bring democracy, human rights and female emancipation to Kuwait? If we continue to rely on gas to generate the majority of our electricity, we are going to have to rely on increasing imports from places which might not be wholly stable or reliable. More political, diplomatic and possibly military resources are going to be expended to protect those resources.

[nnails]

I think we should have gym membership generation scheme.

they should wire a exersise bike up to generator and generate some power like that.

if is sucessful we could introduce in to the prison system. you are sentance to do 2000miles generation for shop lifiting etc

[mattyboy1973]

This is an interesting discussion. One of my companies installs commercial solar, so we fit systems onto the roofs of factories, warehouses, grain stores , chill plants etc. All our customers have high, daytime electricity demand and most recognise the dysfunctional UK energy policy as a medium to long term threat to their businesses.

In this scenario, solar works. The electricity generated is used at the point of production and very little, if any, is exported to the grid.

Our customers tend to be family owned and managed businesses. They own the freehold to their buildings and take the sort of long term view that is so depressingly absent from corporate Britain. As for whether PV is viable without subsidy, I recall a quote from the FD of a food company for whom we had installed a 200kWp system. His view was that what they had done was forward buy around 4.75 million kWhs of electricity , delivered over 25 years (the period of panel output covered by the output insurance) at a unit price of 5 pence. Those 195,000kWhs the system delivered in the first year cost 5p each compared to the 11 pence EDF required for each unit purchased from the grid. The system will deliver the same next year , each unit still costing 5p , and in five, ten, fifteen , twenty years (the assumptions are that the output declines by a few pc each in later years) Now, imagine what grid energy will cost in five, ten, fifteen years? The FDs view is that he has obtained a competitive advantage over other companies engaged in what is an energy intensive business. These calculations did not include the FiT. When these were added on, such an investment went from being commercially and strategically sensible to becoming a 'no-brainer'.

This is the sort of scenario where solar PV makes sense and we are confident that we'll still have a business in 2016. What will disappear, and in our view , should disappear, are all the investment schemes which make their return on the FiT subsidy and which saw huge swathes of council and HA estates all over the country covered in PV which made minimal difference in terms of electricity savings. We may also see less appetite for placing large field scale systems miles away from any localised electricity demand. Farmers may have to find other ways to earn a return from that land. Grow food, perhaps?

We are all for subsidies being removed completely, but not just for solar. Look closely at the long term price guarantees the government is throwing at the EDF/Chinese consortium involved with Hinckley Point. Despite this largesse, we are still no nearer generating 1kWh of electricity from this project and when we do, the cost will be staggering. Let's get rid of all subsidies and let the market decide what generation infrastructure gets built, rather than politicians.

And for all those debating whether or not hydrocarbons are subsidised, do you really believe that the first Gulf war was really fought to bring democracy, human rights and female emancipation to Kuwait? If we continue to rely on gas to generate the majority of our electricity, we are going to have to rely on increasing imports from places which might not be wholly stable or reliable. More political, diplomatic and possibly military resources are going to be expended to protect those resources.

Interesting stuff, and I think the big game changer for domestic solar will be cheap storage, which is reducing in price even more dramatically than solar panels. A couple of years at most before break-even for domestic, and off-grid becomes completely viable - although I don't know what the electric companies will do if this starts happening en masse. Increase the standing charges for those who remain, so increasing the stampede off the grid?

The only real obstacle I can see for domestic is the idea that you would have to remain in the same place for 20+ years to make it worthwhile - perhaps a factor that will subside as more people take it up, and you can simply move to another off-grid house.

No doubt hydrocarbons receive explicit and untold implicit subsidies, not to mention other costs, including many of orders of magnitude more people that have been killed by their effects compared to nuclear, for example.

[Simon Taylor]

Mattyboy, your comment regarding storage is spot on; Tesla get a lot of coverage for their systems but that may be because of a very effective PR machine. There are huge amounts of R&D being committed to this area by firms such as Daimler-Benz, Samsung, LG etc as well as some enterprising upstarts , some in the UK.

We already know how the established grid operators will react to the threat this poses to their business model. In Spain, they have bought the best politicians money can buy and the result is a new tax on energy storage

http://www.forbes.com/sites/williampentland/2015/06/18/energy-storage-is-the-real-target-of-spains-new-tax-on-the-sun/

Mass uptake of solar coupled with effective storage scares the hell out these established grid businesses and probably governments as well. For example, when I charge my car from the electricity produced on the roof of my offices, not only does BP lose out on a £100 or so's worth of fuel sales but the government loses a huge amount of VAT and fuel duty. Once the car is charged , there is no transaction, no receipt, nothing to tax.

Solar (and wind) coupled with good battery storage offers the consumer real freedom from foreign owned grid based generators. On a macro scale, it could offer the UK the chance to care much less about what happens in the ME and whether our LNG shipments from Qatar are going to make it through the Straits of Hormouz. As more business own, generate and use their own electricity and the more cars which run on that electricity, the less the UK spends overseas on energy imports. These technologies present a real opportunity to democratise our energy supply and there will be powerful forces at work to try and stop it happening.

[Kurt Barlow]

This is an interesting discussion. One of my companies installs commercial solar, so we fit systems onto the roofs of factories, warehouses, grain stores , chill plants etc. All our customers have high, daytime electricity demand and most recognise the dysfunctional UK energy policy as a medium to long term threat to their businesses.

In this scenario, solar works. The electricity generated is used at the point of production and very little, if any, is exported to the grid.

Our customers tend to be family owned and managed businesses. They own the freehold to their buildings and take the sort of long term view that is so depressingly absent from corporate Britain. As for whether PV is viable without subsidy, I recall a quote from the FD of a food company for whom we had installed a 200kWp system. His view was that what they had done was forward buy around 4.75 million kWhs of electricity , delivered over 25 years (the period of panel output covered by the output insurance) at a unit price of 5 pence. Those 195,000kWhs the system delivered in the first year cost 5p each compared to the 11 pence EDF required for each unit purchased from the grid. The system will deliver the same next year , each unit still costing 5p , and in five, ten, fifteen , twenty years (the assumptions are that the output declines by a few pc each in later years) Now, imagine what grid energy will cost in five, ten, fifteen years? The FDs view is that he has obtained a competitive advantage over other companies engaged in what is an energy intensive business. These calculations did not include the FiT. When these were added on, such an investment went from being commercially and strategically sensible to becoming a 'no-brainer'.

This is the sort of scenario where solar PV makes sense and we are confident that we'll still have a business in 2016. What will disappear, and in our view , should disappear, are all the investment schemes which make their return on the FiT subsidy and which saw huge swathes of council and HA estates all over the country covered in PV which made minimal difference in terms of electricity savings. We may also see less appetite for placing large field scale systems miles away from any localised electricity demand. Farmers may have to find other ways to earn a return from that land. Grow food, perhaps?

We are all for subsidies being removed completely, but not just for solar. Look closely at the long term price guarantees the government is throwing at the EDF/Chinese consortium involved with Hinckley Point. Despite this largesse, we are still no nearer generating 1kWh of electricity from this project and when we do, the cost will be staggering. Let's get rid of all subsidies and let the market decide what generation infrastructure gets built, rather than politicians.

And for all those debating whether or not hydrocarbons are subsidised, do you really believe that the first Gulf war was really fought to bring democracy, human rights and female emancipation to Kuwait? If we continue to rely on gas to generate the majority of our electricity, we are going to have to rely on increasing imports from places which might not be wholly stable or reliable. More political, diplomatic and possibly military resources are going to be expended to protect those resources.

Excellent and informative post. Thank you.

[200p]

^ If you rent, you can't hedge against energy increases like that - only by buying shares in energy companies which will pay you back dividends to offset increases in energy prices.

Edited September 1, 2015 by 200p

[Simon Taylor]

Mmm.. good luck with those dividends from energy companies over the coming decades.. Have a look at the share prices of E.On and RWE over the past five years if you want to see how quickly a 'sure fire, widows and orphans' stock can be decimated by disruptive technologies; in these two cases, the German rush to renewables.

I don't see why a tenant can't benefit from solar. In commercial property this happens all the time. The landlord pays for the system and generates his return by selling the electricity to the tenant at a rate which may initially be the lower or at worst the same as the grid price. As grid energy prices increase the saving to the tenant increases year on year. Having solar on the roof of a commercial building makes it more attractive to a potential tenant and the more dynamic property owners are waking up to this.

There is no reason why this couldn't work in the residential sector if the tenant used all the electricity produced. A well designed 4kWp system on a suitable roof would yield around 7% on capital based on the value of the energy alone. Sadly, I gather that many residential landlords aren't in the business of long term thinking and seem to be preoccupied with some inconvenient taxation issues at present. Institutional investors in the rental sector might be more responsive.

[scrappycocco]

Mate of mine has a single hot water solar panel thing on his roof. He hasn't had his boiler on for 8 months, content with warm water on cold days and hot on hot days.

Have the solar prices gone down such that the government subsidy is no longer needed?

[OurDayWillCome]

Mate of mine has a single hot water solar panel thing on his roof. He hasn't had his boiler on for 8 months, content with warm water on cold days and hot on hot days.

Never any subsidy for that type of panel - they are very good but don't tick the right 'green' energy boxes for some reason.

[dgul]

Never any subsidy for that type of panel - they are very good but don't tick the right 'green' energy boxes for some reason.

This demonstrates the nonsense of the whole thing. Thermal solar was a good enough return without subsidy, so they didn't offer one. Solar PV didn't make sense without a subsidy so they offered one. They should have been pushing solar thermal all along.

Note that if you buy a solar thermal panel even now, and shove it up yourself you have to pay VAT. So they're happy to tax you for your efforts. Madness.

[Simon Taylor]

Solar thermal does attract subsidy - domestic RHI - which unlike the FiTs paid for solar PV , are paid out of general taxation and administered by Ofgem. The rates remain unchanged at 19.5p per unit of heat and are paid for 7 years.

https://www.ofgem.gov.uk/environmental-programmes/domestic-renewable-heat-incentive-domestic-rhi/about-domestic-rhi/eligible-heating-systems-domestic-renewable-heat-incentive

For domestic users, solar thermal (hot water) makes more sense that PV (electric) as the daytime sun energy is stored as hot water which tends to be used at night (childrens' bath time) or early morning.

Given the government's open hostility to all self-generation subsidies, anyone thinking of getting solar thermal should get on with it. There are a few hoops to jump through to get the RHI payments but they pretty much pay for the installation.

[anonguest]

Can someone clarify for me.....

The article doesn't seem, to me, to be 100% clear as to whether the threatened reduction in the feed-in rates paid to solar panel users will apply to only new installations after the said date OR will be retrospective and apply to ALL solar panel users regardless of when the installation was done.

I did like the claimed Cameron quote about "getting rid of the green crap". IF true it further supports the long standing criticisms people make of Cameron as someone who doesnt really believe in anything and merely gets swept up in whatever is hip and trendy at the time. I'll bet his old Eton chum Zak must be fuming at seeing that his mate Dave didn't, all long, really buy into all that environmental and green stuff.

Edited September 2, 2015 by anonguest

[19 year mortgage 8itch]

Can someone clarify for me.....

The article doesn't seem, to me, to be 100% clear as to whether the threatened reduction in the feed-in rates paid to solar panel users will apply to only new installations after the said date OR will be retrospective and apply to ALL solar panel users regardless of when the installation was done.

I did like the claimed Cameron quote about "getting rid of the green crap". IF true it further supports the long standing criticisms people make of Cameron as someone who doesnt really believe in anything and merely gets swept up in whatever is hip and trendy at the time. I'll bet his old Eton chum Zak must be fuming at seeing that his mate Dave didn't, all long, really buy into all that environmental and green stuff.

No threat to your free lunch yet, grandad.

[Simon Taylor]

DECC have made it clear that the reduced FiTs will apply only to new installations. This was also the case for previous reductions in the FiT rate and subsequent digressions. I think that given the huge amount of investment and institutional capital which has been ploughed into solar schemes since 2010, any retrospective reductions would invite huge legal challenges.

Those who piled in when the FiTs were first introduced at the absurd rate of 43p/kWh will continue to receive that rate and the original FiT contracts were for 25 years, not the current 20. (Although even that looks good value compared to the price the government in offering to guarantee the developers of Hinckley Point, but then that's your grandchildren's problem)