Solar electricity the new UK Scheme

[bluemac]

The UK last year started a solar electric scheme the basics of it is, you invest in the solar panels and put them on your roof, cost ranges from about €13-20k. Then your are paid about 17p per unit by the supplier guaranteed by the government you produce even when using it in your own house.. You still pay your normal usage bill of say 13p per unit. Some believe over 10 years it could be as high as 27k return for your 13-20k investment.

I was over in the UK a few weeks ago and you can see this is booming friends of ours have had it done and swear by it.

Lots of jobs have been created,
people are spending money they had saved in a safe investment!,
Green energy is being harvested. (lowering the chance of fines from europe)

My question is why can we not role this scheme out here?

 

[Leo]

My question is why can we not role this scheme out here?

Maybe because we already have a similar grid buy-back scheme in place?

It still doesn't make good financial sense, ROI on PV systems just isn't there at the moment. The UK scheme estimates that the average household 'could earn up to £1,100 per annum'. With the above installation costs, this means it'll take up to 18 years to break-even, and that's assuming zero maintenance/replacement costs. You'll do well to get much more than a 5 year warranty on the equipment.
Leo

 

[serotoninsid]

Maybe because we already have a similar grid buy-back scheme in place?

I'm open to correction but whilst the framework may be the same, the payback is poor by comparison with the UK scheme. The feed-in tariffs are smaller - and are not guaranteed in the medium-long term.

 

[quentingargan]

The reason the payback in the UK is so good is because the feed in tariff is 43p per Kw Hr., compared to 19c in Ireland. That's a ludicruous feed in tariff when you consider that large wind turbines in Ireland export to the grid for 7c.

By the way, wind in the UK for domestic installations gets 28p per Kw Hr.

Question is, while you might want to roll out renewables and build an industry, have the UK over-done it, and has Ireland under-done it? The talk is that the feed in tariff will be dramatically reduced after March next year, and when it does, there will probably be a substantial shrinkage in the market. That is what happened in Spain when the feed in tariff was dropped from 45c to 37c a few years back.

You can see the list of UK tariffs [broken link removed]

Those tariffs are IN ADDITION to an export tariff. You get these fees for electricity you produce and use. If you don't use it, you get more!

 

[Slim]

From another web discussion forum so usual caveats apply:
"First off this is not subsidised by the government, it is subsidised by customers of the electricity, companies, yep! that’s you and me.

What is the FIT (Feed in Tariff) scheme? This is where you become a solar power generator and sell the power (feed in) to an electricity company, the rate you sell at has been agreed between the government and the companies. You are paid today (based on a nominal 4kWh installation), approx 43p for every kWH you produce, whether you use it or not, there is an additional payment of 3p for each KWh that you feed back into the grid. So the electricity you produce is measured by your installation, what you use is free to you and you are paid for generating it. Because what you actually put into the grid is not measured it is assumed to be 50% of what you produce(even if you use it all or none of it) so you are paid the extra 3p on 50% of what you produce. This rate is guaranteed to last for 25 years and the prices will be index linked annually.

You form a contract with one of the electricity companies, tell them how much you produce they send you a payment. This is a totally different contract to the one you use for supply of electricity, you will still need to buy in as there will be times when you are not generating enough (night time, winter ect). Your supply contract does not have to be with the same company you sell to, and you can switch as readily as you do now.

There are basically 2 schemes.

First as an individual householder you arrange and pay for an approved installer to fit the system (£12000-16000), get the system certified and contract with one of the big supply companies(they cannot refuse you if you abide by the rules). You generate, get paid 46p for 50% of what you generate, 43p for the other 50%, use as much or little as you want. You pay as normal for what you buy in, with maybe a little additional bonus, some,not all, meters are driven backwards by what you export so that gets knocked off your bill too ha ha.

Second way. Some companies will pay all the installation costs, you can use as much of the generated juice for free but they receive all the payments. They will only do this if they expect to profit from the deal so usually only south facing roofs. Usually you contract with the installer for 25 years, then the kit belongs to you, but consider, it is unlikely that the FIT scheme will still be in existence then.

Over a 25 year period it is expected that, barring physical damage the system, it should remain functional though the efficiency of the panels will degrade by about 20%, you can expect to replace the inverter once, (£1500). It is also predicted that electricity buy in costs will increase faster than the inflation rate.

So this makes money only because the current FIT rate is so good. It will be reviewed in April 2012 and will almost certainly be changed as it is recognised that it is overly generous, but if you are on the scheme before then your payment rate is agreed. If you are able to use most of the electricity produced (ie you are home during the day) then you really are on a winner.

Note that the government has another plan to replace all our meters with smart meters, this will eliminate the oddity of driving some meters backwards, also it will be possible to measure exactly what is fed into the grid from your installation so you can expect the 50% estimate to be replaced by an actual measurement."