DECC FiT News

DECC ANNOUNCE NEW FiT.

INVESTING IN PV OFFERS A BETTER RETURN WITH A LOT LESS RISK THAN BUYING SPANISH OR GREEK DEBT

Well that is one way to look at it.  Spain and Greece are having to pay huge (by today’s standards) interest rates to raise money because investors are not absolutely convinced they will get their money back

PV can be risky, but, as I bask in the sun this Sunday morning, I remember that most years our weather is about the same just eclectic on timing (I remember driving, roof down, in a T-shirt in September and having a party washed out by torrential rain on Mid-Summer’s day, ahhhh)

On the whole, even in the UK, PV is safer and there will be no “having to take a haircut” (what a fabulous euphemism for “default”) on your income as the banks had to do with Greek debt a while back.

On Thursday the DECC announced the new FiT which comes in to force from the 1st August.

The new rates are

System Size

Generation Tariff

Export Tariff

<4kWp

16p

4.5p

4-10kWp

14.5p

4.5p

10-50kWp

13.5p

4.5p

50-150kWp

11.5p

4.5p

Standalone

11.5p

4.5p

 So is it worth putting up PV?

Let’s look at the potential return from 10 x 250 watt panels facing South at 30 degrees (using the Governments preferred SAP Calculator)

Current

From 1st August

Generation Income

£450.66

£343.36

Export Income

£32.19

£48.29

Total Income

£482.85

£391.65

Saved (percentage)

50%

Cost per kw

£0.150

£160.95

£160.95

Total Value

£643.80

£552.60

NOW FOR SOME MATHS

If you invest £7,000 at 5% compound in 20 years you will have £17,688.

However the interest will be taxable, let’s say your marginal rate of tax over 20 years is 40% (huge assumptions but gives the idea).  Take off the tax each year and the return falls to £12,274

If you spend that money putting PV on your roof then, in the first year this will return (approx.) £552.60.  Each year that will grow by inflation (assume 3%) and will be reduced by the degradation of the panels (guaranteed to retain 80% production over 25 years).  Let’s assume that degradation is straight line, so in year 2 the income will be £564.  By year 20 it will have reached £831.  By year 20 your return (income plus saving) will have totalled £13,650

If each year you bank the money (like for like) and earn interest (which is taxable unlike the income) then by year 20 you would have £17.955

FINANCIAL CONCLUSION

In theory then you are significantly better off if you put the PV panels on your roof than if you invest the money at 5% in the bank.

THINGS TO CONSIDER

1.    At the moment you would be hard pushed to get 5% unless you lent the money to Greece or Spain, it would seem PV is a lot less risky

2.    If one person puts up PV panels it makes no difference at all but if a million people put them up then the benefit in terms of greenhouse gasses is huge

3.    Inflation is likely to stick around for a while PLUS the amount you save on using the electricity you generate yourself could be worth significantly more.

THINGS TO LOOK AT IN THE NEW RULES

The new FiT Contract is:-

1.    20 Years – was 25

2.     Still index linked (why????)

3.    Potentially going to fall every quarter for new entrants

So, get in early!

This is my opinion only.  If you want more information please go to http://www.decc.gov.uk/en/content/cms/news/pn12_066/pn12_066.aspx

Contact me, Charles@usethesun.co.uk or 01279 320020 for more information

This is the opinion of Charles MD at Use the Sun, an MCS accredited company that specialises in the installation of Solar PV (Solar Photovoltaic), Solar PVT (Solar Photovoltaic Thermal and Electric Car Chargers).  Official statements can be found on the websites linked to in the text.

Use the Sun to turn light in to electricity and cash

Photovoltaic Thermal

PHOTOVOLTAIC THERMAL PANELS IMPROVE PRODUCTION

Saving money, earning money or going green,  PVT is the new answer.  Here is some more information you might like to know. Contact me for a personalised quote
WATER IS RUN AROUND PV PANELS MAKING THE PANELS MORE EFFICIENT AND GENERATING HOT WATER.

Significantly more efficient and cutting edge.

Bit More Detail

The new panels have a “radiator” like attachment fixed to the rear around which flows a water/glycol mixture.

A solar PV panel in the UK can easily reach 80 degrees centigrade.  Circulating a cold liquid will cool the panel.  In the midday heat the cooler PV panel can be up to 30% more efficient at generating electricity.

The by product is a warmed liquid, run through a heat pump the liquid it is put under pressure so becoming significantly hotter.  This then goes through a cylinder creating enough hot water for both domestic and heating needs.

On a like for like comparison of a 3 bedroom house the electricity cost could be £300 less than the cost of gas for a conventional gas boiler.

Connect to a Low Temperature Heating System with convector radiators and BSRIA tests show a further energy saving of up to 31%

F.A.Q.

What happens to the warmed water if we don’t need it?  The warmed water is either used immediately or is stored in a separate tank for later use

What happens at night?  The stored warmed water is passed through the heat pump which will have to work harder to bring the water up to temperature

What if we don’t get any sun? Worst case scenario the heat pump cannot cope and so there is an electrical element in the cylinder to bring the temperature up and ensure a permanent hot water supply

How much does it cost?  The system I just defined is suitable for a 3 bedroom house.  We use 10 x 190 watt panels (peak 1.9kW).  Total installed price £16,000 (not including radiators).  A saving will be made by not installing a boiler

How much can I earn?

–      The PV Element is entitled to the Feed in Tariff.  A South facing roof should generate at least 1,600kWh a year (with the cooling maybe 15% more).  At 21p/kWh the Generation Tariff will earn £342 plus an assumed export of £25, total £367 (with cooling maybe 15% more) index linked for 25 years

–      The Renewable Heat Incentive is still to be introduced.  Indications are it will be at least as valuable as the Feed in Tariff

How much can I save? There are multiple savings to be made

–      Using the electricity you generate could save up to £240 a year

–      Heating and hot water could save £300 a year

–      Low Temperature Heating System could save 31% of your heating cost

If utility bills increase the savings become more valuable

And, of course, there is the CO2 savings to be made

What about maintenance? This is a very low maintenance system, we are offering an introductory 3 year free maintenance contract or to train your maintenance staff for free

Contact me if you would like to discuss it further

All the best

Feed in Tariff Greg Barker

Greg Barker Tweets “We have listened carefully to the solar industry and are considering moving the date of the feed-in tariff changes as a result of concerns,”

Spin?  I am getting Dizzy!

The Feed in Tariff is a great concept and at today’s rates makes it worth putting PV on your roof in the UK, (I just read the meters for 2 small systems and will be £500 better off in a few weeks, not bad seeing it has rained nearly every day for a month)

What is killing the Feed in Tariff is this government’s need to tinker with it and then tinker some more until everyone is so confused they won’t bother.

It is simple really (I feel a rant coming on).  In the UK we don’t have the weather to make Solar PV viable without a little assistance, Thus the Feed in Tariff.  We all know that last year the FiT was much too generous and we kept saying so until, finally, the Government over reacted and cut the FiT by too much too quickly.

However, like any good industry we fought back, dropped our prices, many installers shut up shop and those of us that are left have work on.

But this Government won’t leave it there, no, they have positioned the knife and they are desperate to put it in and twist it around a bit, so immediately they announce another review and hide in there the idea that they can back date the results of this review.

Of course they can’t back date it, the incompetence shown in December on this issue would be as a molehill compared to the legal battles they would have to fight

What about the Renewable Heat Incentive (RHI), is that ever going to come out

Every time the Government make a new announcement they make it more and more difficult for the business to survive.  Stop the rumours and announcements of future announcements, make a statement and STICK BY IT and then we may all be better off financially and ecologically

In its current state the FiT works by being just enough to incentivise people without costing the country a fortune.  Announce an end to changes and announcements and let us get on with our jobs

PVT

PV, PVT or PV and T

PhotoVoltaic, Photovoltaic Thermal or PhotoVoltaic and Thermal. That is the question

A solar panel can reach 80 degrees centigrade in the noon day sun, if we cool it down to say 20 degrees centigrade it could be up to 30% more efficient.

I have been investigating an amazing solution from Smiths Environmental Products (http://www.smiths-env.com/), now this is a cool piece of kit

Simply put the system runs water around the rear of the panel, this cools the panel making it more efficient.

The by-product is hot water.  Run this through Smith’s Heat Pump and this will bring it up to a temperature that can be used to heat the water in your cylinder for domestic and heating hot water.  If it is not needed (the heat of the day) it can be stored for later use (at night)

So throw out the gas guzzling boiler and put in PVT (PhotoVoltaic Thermal panels).

It gets better though because we then recommend a Low Temperature Heating System.  Because the water travelling around the system is not as hot as a conventional system you need either to increase the size of your radiators (nahh) or to use fan convectors.

The fan convectors are great, they use a low power fan to blow the air around.

BSRIA figures suggest that this is 24% more efficient than conventional radiators, rising to 31% when used in conjunction with a low temperature system

So now we have no boiler, sun powered hot water assisted by electricity which might have been made by the panels (during the day at least) and a more efficient and responsive heating system

So, is it worth it?  Well, actually the PVT works out to be about 3 times more expensive than straight PV.  I have just quoted £16k for a 10 panel system but I have a feeling that I might lose money on that one.  Still, we all have to install our first one and Smith’s are being very very helpful

According to the Governments guidelines if the panels were south facing at 30 degrees they should generate about 1,631kWh of electricity a year, the Feed in Tariff income would be around £367.  If we assume that the efficacy from cooling will add 15% that is now £420

Using the electricity we generate ourselves might save a further £200 a year making the PV element worth around £620 a in the first year (increasing with inflation each year for 25 years)

On the saving we have a system which will cost around £600 a year compared to a conventional gas system of around £900, so a further £300 a year and rising with prices.

In the first year the client will be around £920 better off, not a bad return on £16k especially if you factor in the effects of inflation in future years.

This becomes even more valuable if you needed a new boiler anyway (as this client does), they had factored in £2k to install the boiler and that is money saved

On the downside you will have to add in the cost to change all your radiators to Fan Convection

So for £16k plus radiators minus new boiler you get

–          A tax free income of £420 a year index linked

–          An energy saving of £500 a year rising with the cost of energy

–          A more responsive heating system

–          A more efficient house

To me that is financially marginal, if you want to increase your self-sufficiency in a green way then this is the route for you

Leaving the best for last is the ever threatened Renewable Heat Incentive (RHI).  Not wishing to pre-guess when it will come in and how much it will be worth I would hazard a guess that the value of this incentive makes the whole deal financially sound as well.  This system should be entitled to the RHI when it is introduced.

It has been a long learning curve for me but I am now convinced it is a good idea and I hope that my client goes for it

If you would like to know more please contact me, Charles@usethesun.co.uk or 01268 415447

Ecovelocity

ECOVELOCITY

The Green Motor Show

Walking in to Ecovelocity yesterday afternoon to be met by a Lightning, Fisker Karma and a Tesla was special.  There are 3 cars that prove that electric vehicles can be sexy!

The lightning can do 0 to 60 in less than 5 seconds; the new Tesla has a range exceeding 300 miles while the Fiisker Karma is a range extender.  Whether your need is speed or distance these vehicles offer an eye catching solution.

The prototype Vauxhall Electric City Car reminds

me of the film Tron.  And the fabulous 3 seater Mia were also on display.

Two great looking cars that are leading the way (with others such as the Renault Twizzy etc) in proving that electric cars can be new and exciting.

The only disappointment was the number of vehicles on display.  Yes there was the Volt and Ampera for the mid market, a Renault Kangoo and Nissan Leaf etc.  But I would have liked to have seen some of the models due for release from the likes of BMW, Audi, Ford etc.

I had my ticket as part of Grand Designs live where I was researching in to some the latest eco building methods available to the public.  I was very impressed with the Polysolar Greenhouse, PV panels on a greenhouse that let through the suns growing rays while converting its power in to electricity.

So not too disappointed with the day as a whole.  Maybe next year we will see a few more vehicles.

PV Installs fall

As PV Installations fall is there still a profit in putting PV on your roof?

YES

The Feed in Tariff has been in a bit of a limbo since the Government announced a cut in the rate late last year.  The cut was first due to come in to effect on the 11th December; in the final week of the old Tariff 29,510 installations were recorded (http://www.decc.gov.uk/publications/basket.aspx?filetype=4&filepath=11%2Fstats%2Fenergy%2Fenergy-source%2F3803-weekly-solar-pv-installation-and-capacity-.xls&minwidth=true).

The Government lost the ensuing court cases and the new rates came in to effect from early March.  In the week ending 8th April the lowest number of installations were recorded, just 820.

In November and December 2011 the average number of installations was 12,986 a week, in April that had fallen to 2,629.

This fall is not a good thing for a fledgling market in a recession, the cause is obvious, many bought forward their purchasing decision to beat the cuts.  Of those that did not many are disillusioned by the cut in the Tariff and therefore their income

Whilst the Government have cut the FiT the cost of installation has also fallen quite dramatically.  In 2 ½ year we have seen the cost of equipment fall by over 50% which has been reflected in the retail price.

Looking at a 4kW system on a South facing roof at 30 degrees.  The cost installed is now less than £9,000 (our first 4kW system 2.5 years ago was circa £16k).  This system could generate 3,434kWh a year.

The generation tariff at 21p is worth £721.06, the assumed export a further £51.50 so the owner will earn £772.56 tax free.  On top of that if they can use 50% of the electricity they generate saving 12p (average price) per kWh that represents a saving of £206.02.  Making the system worth £978.58 in the first year, a return of nearly 11%.

Of course the return is index linked for 25 years, so all things being equal, the annual return should increase every year.

So why are they not selling?

The Government has announced another review to drop the price as from the 1st July.  Normally that would encourage people to get in early; except those who have read the review.  There are 4 points that jump out at me

1.       Drop the Generation Tariff from 21p to, maybe as low as 14p for sub 4kW systems

2.       Remove the index linking

3.       Reduce the length of the contract

4.       Back date the FiT to existing contracts

A potential return of 11% is very generous but let’s be realistic.  This return is only for people with a South Facing Roof at a pitch of 30 degrees, change the pitch or the direction and your return falls.  An 8% to 10% return is much more likely.

But, is 8% – 10% a good return, your money is tied up for 25 years and the return is based on the UK weather, yes that is taken in to account in the calculations but it remains a nagging doubt in many people’s minds.

Some might say that a fall in the tariff will lead to a corresponding fall in prices, as happened in December.  No, there is not the room, when we started the “Kit” was about 70% of the price, now it is about 40% with labour, scaffolding, accessories etc making up the rest.  Even if the kit prices fall I doubt we will see a significant reduction in price.

Removing the index linking is a good idea; the capital cost is a sunk cost why should the return be indexed.  If you put the money in the bank you can have your interest or you can have capital growth, you can’t have both

Reducing the length of the contract.  I’ll come back to this another day

Back dating the new rate to existing contracts.  Hit me over the head with a large hammer.  OK.  This is a huge subject which I will come back to another day but for now let’s just say that if the Government were made to look incompetent by their actions of December 11th and the ensuing court cases that they lost en-mass that is nothing compared to what would happen if they changed the Tariff retrospectively for people who had paid more for their system.

Why are sales so dire?  In my opinion it is because of the way the Government are making everyone too nervous to get involved

Solar Panels Can Go Anywhere

We have proved that we can find a way to attach a solar panel to any suitable location.  I wish these guys had asked us.  A Catamaran with solar panels using electricity as their only form of propulsion to get around the world – How Kool is that

The amazing thing for this achievement was the people who came together.  A Swiss Engineer, German Financier and a Kiwi designer

It wasn’t fast; 19 months to complete 37 thousand miles but they were not in a hurry, they were out to prove a point and I, for one, would like to congratulate them on a job well done!More information can be found by Clicking Here

EASING OF PLANNING REGULATIONS FOR PV

EASING OF PLANNING REGULATIONS FOR PV

Great news for PV installations on flat roofs.  Click on the “read more” for an outline of the new regs and a link to the paper

As of the 1st of May there has been an easing of the planning regulations for commercial buildings.

At a quick glance panels can now be put on to flat roofs (not including listed buildings) as long as they are no closer than 1 metre from the edge of the roof and do not stand more than a mitre high at their highest

I expect this will simplify maters for a lot of people

The New Ampera

The New Ampera is launched and sales are looking good.

I have been watching for the launch of the Ampera for some time

Last year I was lucky enough to test drive one and what a superb bit of kit it is. So quiet and so comfortable.

Sales are on target with an expected 3,500 to go this year despite the £30k price tag. Not really a surprise, I believe Vauxhall have really got this one right

The Guardian have a nice bit on it at http://www.guardian.co.uk/environment/2012/may/01/vauxhall-ampera-electric-cars?newsfeed=true

Please let me know if you own one or have seen one driving around yet

Good luck Vauxhall.

For more information on the Ampera go to http://www.vauxhall.co.uk/electric-cars.html