In the discussion of grants and subsidies, or lack thereof, for solar PV, it's easy to forget the supply side. Silicon wafer and thin film production plants are now being built in several countries at a pace that is probably about as quick as the technology and knowledge base allows. It's far from adequate to meet the coming energy gap let alone do much to prevent climate change, but there we are. Government grants for solar panels may not actually increase the rate of manufacture - we just get into a bidding war for the available panels.

The collapse will become more apparent once we can see what % of the legacy Clear Skies registered installers and manufacturers are shown not to have re-registered for the LCBP (at £1800 per technology a piece).

Currently they are all still listed on the BRE Green Book website but their registrations all expired yesterday (there was a six month grace period from 1st April) if they haven't applied in the meantime. Once the listings are updated to remove those who haven't coughed-up then we will see clearly what is left.

Having said this I think people are still going ahead with projects - just without the grant funding. What the overall impact on the market will be remains to be seen - but I can't imagine it will be terribly positive.

This seems to be a very sorry tale, especially if the tone of darling Alastair's comments are understood correctly.

The grants system does seem to have had some involvement in sparking some life into a sector that in the UK is ridiculously behind the rest of Europe and the microgeneration sector does seem to be 'standing on its own feet' despite grant aid....

BUT (that's a big but by the way)... This is still a relatively specialist sector (in the UK), a niche market (dare I say it), it is not a solar panel on every roof and a turbine at the end of every street, and certainly not a MCHP unit under every kitchen counter, without big time subsidy (grants and/or loans for installation, R+D, business start up, commercial, residiential the whole lot) this is going to be a long way away and sadly (in terms of homes) only available to the wealthy. With rising fuel prices this is even more fuel poverty on the way...

Local gernation is an absolute no brainer for C02 reduction nationally and essential for these supposedly zero carbon new homes we're all going to build.

Enough talk, does any body have Darling's phone number... or better still his boss.? How does one lobby these days...? Its time the polititions put their (actually our) money where their mouth is...



J

"the microgeneration sector does seem to be 'standing on its own feet' despite grant aid."

I'm not convinced by that - there appears to have been no forward movement of wood pellet systems, which remain specialist items with no apparent support network or widely available fuel source. Wind generation has had a few high profile steps forward, but appears to have shot itself in the foot with unsustainably small domestic systems that provide no clear benefit. Solar hot water has been around in much the same form for decades and any progress is more likely to be to do with heavy media coverage of green issues rather than grant systems.

In other words, microgeneration remains a largely unexplored technology, with any significant improvement in the situation being foreseen in a few year's time (which as all followers of Tomorrow's World will recall, means we're unlikely to see anything for at least a decade). Not so much standing on it's own two feet as crawling on hands and knees.

Combined with the Code for Sustainable Homes apparently relying on significant advances in technology penetrating right through to the mass market, it appears the government are making impossible commitments that they have no expectation of meeting, or desire to even support in the short term.

But then I'm a cynic :-)

I think the key to when the microgeneration can ‘standing on its own feet’ is the point when the economic consideration of installing a renewable system of any sort makes sense.

When a clear financial case can be made for renewables then the sector can move out from the committed niche to the mainstream. That is meant in no way to belittle those of us who have taken the first steps but to recognise we have done it for more for ideological reasons than financial ones.

There are a number of factors coming together on this one, and others pulling in exactly the opposite direction.

I think the key factors are as follows, if you can think of anymore, or disagree with my thinking so far I would love to hear your view on it as my thoughts are still at the incubation stage.

There has to be a sensible payback period on initial investment.
At the moment if a home owner invests in say a 2kw solar system at approx cost of £8,000 then they annual return on investment works out at roughly 3%.

I work that out by looking at the energy cost saved- between £90 and £120 a year.
The ROC payment, approximately £72 a year. With feed in rates at about 4p a unit, then you can expect to earn around £24 from that.
That makes a annual income of approximately £216 which gives are return on investment of 2.7%.

Now there is a number of things that could be changed to radically change those sums.
The largest one is obviously to reduce the initial outlay. A £4,000 grant would bring the return on investment up to 5.4%.

A doubling of the ROC rate as has been raised by the Government, and in acted by Good Energy would increase the revenue to say £144 a year.

The income from feed in is small but again if it was doubled to 8p a unit this would increase that income to £48.

Put altogether that gives an ‘income’ of £312 on an outlay of £4,000 or 7.8%. Not bad as any one with money in a savings account would tell you.

And that is assuming that energy costs remain constant, a big assumption given the present situation.

The next ‘tipping point’ would be some solid research into the effects of investing in such a system on the final house price received when selling. Anecdotal evidence suggests that an energy efficient house can command a small premium, whereas a solar powered house can reach as much as 8% more- the Energy Savings Trust say 10% but I find that difficult to credit.

What I find incredible in the present situation is that none of the above is actually that difficult to implement, nor in the general scheme of things that expensive.

A 50% grant or tax break on installation, say it cost the tax payer £40 million a year, means a national investment in the renewable sector of £80 million. Now that is what I call a real public private partnership.

The doubling of the ROC payment would hardly break the Tresaury,if Good Energy can afford to do it so can the public purse.

And the energy companies are not going to be filling for bankruptcy if they have to pay 8p a unit.

Now I have based that on solar. I would really appreciate it is fans of the alternatives could see what they could come up with a similar idea for them.

If nothing else it would make a good article for naturalchoices.co.uk.

Pete

I agree with the above, the investment and payback understanding of the issue is fine, however it still need the spare cash up front presenting an issue for people who cant afford the capital investment, this is where leasing could really be applicable, also what about government loans rather than grants...?

J

James, now there is a cunning plan- and interest free loan over say a five year period combined with some sort of grant.

As i say here in France you get a small grant plus a whopping great tax break- but the tax break isn't until the next year- so you need to have the cash in the first place, and equally have an income tax bill that can be reduced significantly. Niether of which apply if you are poor.
Pete

So people... in light of darling's comments whats the actual plan of action then....



J

The low carbon buildings programme has now stopped taking applications from businesses under streams 2A and 2B.
They lasted less than 12 months. So there is now no funding for businesses installing microgeneration.

The whole programme has been underfunded and is frankly a waste of time.

Dominic said:

"It's probably been voiced before, but "payback times" don't seem to come into the equation in any other aspect of life;
cars, holidays, clothes, jewellery, phone bills, vehicle fuel, and anything else we choose to spend our money on?"

My issue is more that, when listing the benefits of ecologically aware technologies, it's not going to win converts if you claim a return on investment that simply doesn't exist. The 'Green Marketeers' are often the first to bring up payback times and claim that such systems are investments - and who are the public to trust when these claims are shown to be wrong?

I spoke to microgenerations early last summer who informed me that for my customers to recieve grants I would need to pay over £3000 + vat for the privilage. I asked what the money was for and told that part was registration and part for sending some one down to check me out. I asked what they were checking for , was it my credentials as a long running HETAS solid fuel specialist or my companies green ethos? I was told 'no' just want to see what sort of people you are.They then continued that half of their wood based companies were not HETAS registered anyway and that it meant nothing to them if you are.

I promoted the earlier dti project through local press and found that many customers assumed the process would be straight forward, when the reality was realised I had to deal with the disgruntled public , I was made to feel as if my promotion of the scheme was underhand in some way, every thing I m trying to achieve is being undermined by a government who ( I thought) needs the Knowledge gained by an existing Uk industry that goes back generations.

The only excuse I can see is that this government scheme started after unrealistic promises to the rest of the world were made. In a panic , clueless ministers looked to foreign solutions , companies and technologies ( mostly marketed by clueless businessmen) for a quick fix solution. In reality most of the pellet and log boilers are only suitable for a fraction of the population and only viable for larger scale installation.Lots of effort and millions of pounds later and they have achieved the ridiculous.

Why did they rubbish so quickly the ability of existing uk manufacturers to create a solutions for the uk market?

Why have they turned their backs on an existing competant persons scheme which suffers from lack of funding?

Why wont they take small scale residential wood burning more seriously?

In stead of this mess, simple legislation (like banning open fires or insisting disused chimneys be capped etc etc) would bring instant results.

I find that the £2000 - £3000 outlay for a good stove fitted properly can give instant payback, mainly ( if done properly) from the aesthetics of a good looking working fireplace adding value to the property.

To summarise ??????????????????????????????????????????????????????????????????????????I dont get it!

Carbon Trust Loan 100k repayable over 5 years biggest con out. applied for and approved then when they found out I was also a farmer loan rejected. even though totally separate business to the farm. Applied 1 year later and still rejected as the original business which was credit vetted and approved apparently does not now exist in the eyes of the Carbon trust although it has got a contract for supplying 4800 MWh of renewable electric with a major electric provider.