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The first 2,000 kwh

Discussion in 'Home Power and Microgeneration' started by Tom P, Jul 19, 2011.

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  1. Tom P

    Tom P Guest

    Our little grid-tied roof installation just went past 2,000 kwh. Despite
    cool rainy weather over the last month, in just over 6 months operation
    the installation is generating 25% above planned capacity.
     
  2. vaughn

    vaughn Guest

    I envy you. I am the sort of guy who might have a system like that, even though
    the my business eduction informs me that they seldom make economic sense. But
    nagging details get in the way. Unfortunately, I live in hurricane country,
    which raises engineering and insurance issues with PV installations. Further, I
    know that many do it, but I just can't bring myself to drill holes through a
    perfectly good roof.

    Congratulations!
    Vaughn
     
  3. Giga2

    Giga2 Guest

    That is brilliant!
     
  4. Peter Franks

    Peter Franks Guest

    Yes, but not economically sound.
     
  5. Tom P

    Tom P Guest

    Really. RWE just transferred 526€ to my bank account.
     
  6. Giga2

    Giga2 Guest

    Why?
     
  7. Peter Franks

    Peter Franks Guest

    Let me know when the 35,000€ 'investment' is paid off.
     
  8. Peter Franks

    Peter Franks Guest

    Because the cost outweighs the financial benefit.
     
  9. Tom P

    Tom P Guest

    You're a factor 3 out.
     
  10. Paul Aubrin

    Paul Aubrin Guest

    Is PV electricity subsidised in the country were you live?
     
  11. Giga2

    Giga2 Guest

    Depends how much it cost, how much Tom is saving and how much he is earning.
     
  12. Paul Aubrin

    Paul Aubrin Guest

    And how much subsidies he can get. Many countries (Spain for example) are
    reducing their subsidies for new PV installations but must pay those
    subsidies for former contracts.
    The Spanish solar industry companies complained loudly that they would go
    bankrupt if the Spanish government reduced too much the subsidies.
     
  13. As do the oil companies when threatened with loss of their tax breaks
     
  14. Peter Franks

    Peter Franks Guest

    Right, and we already discussed that and found that it isn't
    economically sound.

    If someone wants to install PV, have at it. But it isn't financially
    sound, and won't be until it is $1/watt installed, imo.
     
  15. Giga2

    Giga2 Guest

    Very true, that is what I meant by 'how much he is earning'.
     
  16. Giga2

    Giga2 Guest

    And *we* (not including you) came to the conclusion it was economical.
    What is it now?
     
  17. Falcon

    Falcon Guest

    Right, and we already discussed that and found that it isn't
    economically sound.

    If someone wants to install PV, have at it. But it isn't financially
    sound, and won't be until it is $1/watt installed, imo.[/QUOTE]

    We don't have enough information, Peter.

    It's the Return On Investment (ROI) that's important from Tom's point of
    view. In this case not only the current return on the cost of investment is
    important; assumptions he has made about the future price of electricity
    and maintenance costs are critical. If the assumptions are realistic and
    the ROI still compares favourably with other forms of investment, Tom has
    made a wise move, regardless of any other considerations.

    That said, the return he makes on his investment doesn't appear out of thin
    air. It MAY be economically sound for Tom, but what about everyone else?
    What concerns me is the effect the subsidies he receives, has on
    electricity prices for the vast majority of people who cannot afford to
    invest in PV or other forms of renewables. His generous feed-in tariff is
    paid for by the rest of us in the form of higher electricity prices.

    If his (and other domestic and corporate investors) ROI is as high as, say
    10%, does that justify and increase of 10% in electricity prices for the
    rest of us? How do you feel about it Tom?
     
  18. Tom P

    Tom P Guest

    We don't have enough information, Peter.

    It's the Return On Investment (ROI) that's important from Tom's point of
    view. In this case not only the current return on the cost of investment is
    important; assumptions he has made about the future price of electricity
    and maintenance costs are critical. If the assumptions are realistic and
    the ROI still compares favourably with other forms of investment, Tom has
    made a wise move, regardless of any other considerations.

    That said, the return he makes on his investment doesn't appear out of thin
    air. It MAY be economically sound for Tom, but what about everyone else?
    What concerns me is the effect the subsidies he receives, has on
    electricity prices for the vast majority of people who cannot afford to
    invest in PV or other forms of renewables. His generous feed-in tariff is
    paid for by the rest of us in the form of higher electricity prices.

    If his (and other domestic and corporate investors) ROI is as high as, say
    10%, does that justify and increase of 10% in electricity prices for the
    rest of us? How do you feel about it Tom?
    [/QUOTE]

    A couple of things to say about this. The first is that electricity
    prices reflect the cost of generation, which to a large extent reflects
    the cost of fossil fuels. Household electricity tariffs in Germany have
    increased by a factor of around 4 since 1970, and roughly doubled since
    2000. There is no reason to expect the cost of fossil fuels to fall in
    the future and every reason to expect them to rise, meaning that we can
    expect electricity prices to rise regardless of renewables.

    Another factor in the consumer price of electricity is tax. Electricity
    in France is not significantly cheaper because of nuclear energy, but
    rather that the French government applies a much lower tax rate than
    nearly every other country in Europe, Germany and Denmark the highest.

    Since the percentage of PV grid feed-in has only recently become
    anywhere near significant, it is clear that none of these price rises
    can be the result of subsidized grid feed-in, and hence the claim that a
    10% rise in electricity prices is the result of grid feed-in subsidy is
    unjustified and simply used as a scapegoat.

    As far as the feed-in tariffs are concerned, the difference between the
    average household tariff and the grid feed-in tariff is around 5 cents.
    The feed-in tariff is declining every year, so that in a few years
    together with the rising electricity prices we can expect parity. At
    that point no-one can claim that the PV installations are being subsidized.
     
  19. Tom P

    Tom P Guest

    Incidentally, there's another reason occurred to me why prices rise -
    shareholder return. Since privatization, power companies have to make a
    profit, and the shares have to go up in value.

    It's that which is a majorly
    Good point. I don't know how the situation is in your country but here
    it is essential to get the installation done by professionals, or more
    exactly, trying to DIY is insane.

    The reasons are:
    - the power utility will refuse to connect to the grid without the work
    being done by a certified electrician.

    - DIY work on your building structure, including the roof and wiring,
    may invalidate your fire and building insurance.

    - a professional installation company is insured against any
    consequential damage or loss incurred by their work. In addition their
    employees are insured while working on your building. Not many people
    realize what it can cost them if they employ someone to work on their
    roof, and he falls off, breaks his neck and ends in a wheelchair.

    - a professional installation company will guarantee the installation
    for x years and guarantee a minimum performance profile for x years.

    Wrt insurance, you should inform your building insurance company. Most
    will offer extra insurance cover, either as an extension to your
    building insurance policy, or you can opt for a separate insurance from
    another company. The second was marginally cheaper, but I opted for the
    first to avoid any finger pointing problems down the road. The insurance
    is around 80€ annually and covers things like storm damage and 3rd party
    liability.

    The installation is essentially maintenance free. The company I used as
    part of the contract come after the first year to check everything through.

    I only had two problems with the project. The first was that the weather
    held up the roof installation by nearly two months. The second was to
    get the electrical network company to finally issue the payment contract
    for the grid feed-in so we could get any money. It took endless phone
    calls to find out who was delaying what and why, and to chase people to
    send the right bits of paper to the right people.
     
  20. Falcon

    Falcon Guest

    I don't know where you got your figures from, but in the UK the situation
    is different.

    1) "...the difference between the average household tariff and the grid
    feed-in tariff is around 5 cents".

    I'd like to see a reference for that. In the UK, the fee-in tariff is "up
    to 41.3p/kWh, depending on the type and size of the system used to generate
    renewable energy", plus "an additional 3p/kWh when you export any surplus
    back to the grid".

    The UK market is awash with different tariffs, but average price consumers
    pay for electricity is around 13p/kWh. This is expected to rise to around
    15-16p/kWh (20% or so) in the next few months as wholesale prices feed into
    the retail market.

    In the UK the difference between the price paid to someone like you with PV
    panels and the average household tariff is, therefore, around 28p/kWh (31-
    32 Euro-cents/kWh.

    2) "The feed-in tariff is declining every year..."

    I'd like to see a reference for that. In the UK, the feed-in tariffs are
    are index-linked to RPI and guaranteed for 20 years, except solar systems
    which qualify for 25 years. According to the Government, that should earn a
    return up to 8% p.a. I know of no other form of investment that virtually
    guarantees a return of around 8% p.a. for 25 years.

    I understand that the government is now reviewing the subsidy for larger PV
    installations (i.e. >50 kW plus) because of the cost of supporting them.
    I'm not surprised.

    3) "the claim that a 10% rise in electricity prices is the result of grid
    feed-in subsidy is unjustified".

    I agree, that was a simplistic and misleading estimate.

    Ofgem estimates that environmental costs (which include the Energy
    Efficiency Commitment (EEC), Community Energy Savings Programme (CESP),
    Carbon Emissions Reduction Target (CERT), and Renewables Obligation
    Certificates (ROCs)) currently adds around 8% to average domestic fuel
    bills. I expect that percentage will rise, but of course that depends on
    what happens to gas, coal and other fuel prices.

    Feed-in tariffs are not specifically mentioned in the report; they form
    part of the overall cost of environmental obligations.

    References:

    Feed-In Tariffs
    http://www.fitariffs.co.uk/

    Fuel Prices
    http://xrl.us/bk2k9r (Link to www.confusedaboutenergy.co.uk)

    Environmental costs
    Ofgem: Electricity and Gas Supply Market Report, June 2011
    http://xrl.us/bk2k55 (Link to www.ofgem.gov.uk)
     
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