Microgeneration contribution to future energy mix

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Microgeneration contribution to future energy mix
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Blue Peter

Joined: 21 Mar 2005
Posts: 2400
Location: Milton Keynes

Posted: Tue Dec 13, 05 4:58 pm Post subject:

Treacodactyl wrote:

So what is the justification for not giving DIYers the same grants? If two households installed the same system one could claim ï¿½1000s in grant money, well the certified installers could, and the other couldn't claim anything. If you're connecting to the mains then I can see the need for the electrical work to be done by a 'competent' person, but the installing of panels, wind turbines etc could be done by a DIYer or a builder.

You wouldn't worry that some unscrupulous DIY-ers might just pocket the cash without doing whatever they said they would (or just putting up a bit of perspex on the roof and pretending that it's a solar water heater)?

Peter.

Treacodactyl
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Tue Dec 13, 05 5:03 pm Post subject:

Blue Peter wrote:

Treacodactyl wrote:

Having seen some of the quotes by authorised suppliers it can appear as if they are doing the same thing.

Anyway, people claim all sorts of grants and benefits. Unless you're suggesting all other grants and benefits are claimed fraudently why not use the same sort of vetting?

Blue Peter

Joined: 21 Mar 2005
Posts: 2400
Location: Milton Keynes

Posted: Tue Dec 13, 05 5:11 pm Post subject:

Treacodactyl wrote:

Having seen some of the quotes by authorised suppliers it can appear as if they are doing the same thing.

Anyway, people claim all sorts of grants and benefits. Unless you're suggesting all other grants and benefits are claimed fraudently why not use the same sort of vetting?

Dunno, but I suspect that was the reason and/or they want to make sure that the job is done properly so that we are getting whatever reduction the grant is supposed to be encouraging,

Peter.

ken69

Joined: 17 Jul 2005
Posts: 316
Location: Norfolk

Posted: Tue Dec 13, 05 5:15 pm Post subject: energy
The money is probably there, but the consultants, office staff, vetting officers, appraisers, surveyors and printers et al come first. The audit figures for EST would make good reading.

Treacodactyl
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Tue Dec 13, 05 6:35 pm Post subject:
It would be good to see a case study with the costs and grants listed and explained. Perhaps the government could subsidise solar panels or home wind generators?

dougal

Joined: 15 Jan 2005
Posts: 7184
Location: South Kent

Posted: Tue Dec 13, 05 10:34 pm Post subject: Re: mircopower generation

alternative-energy wrote:

... site that details our move to mircopower generation at our suburban house.

Hi Paul, welcome to the site. I'm sure I'm not the only one wanting to hear more about your install.

Personally, I'm a little surprised that you have decided to go Solar PV as a first main step. I've thought that it made sense for those off-grid, and perhaps those who use their electricity largely during sunny days.

I note from the figures on your site that your planned installation is expected to generate 2950 kWh per year. And that Good's contract requires you to sell **all** of it back to Good at 4.5p per kWh, which would raise something like ï¿½133 a year.
As I understand Good's contract, your generation and consumption are treated *seperately*.
You sell *all* your generated power to them. And continue to buy *all* your electricity consumption from them - at a higher price!
As far as I can tell, you **don't** get to use your own electricity 'for free'.
I refer to para 3 of the Terms and Conditions (small print) of their contract (as downloaded from their site) "The Renewable Generator agrees to sell all the benefits arising from its renewable output to Good Energy."
And that they require you to "Have a meter installed on your generator which records the total generation data."

I note that you are opting for a system costing almost ï¿½18,000 and expect to get a grant covering ï¿½8,000 of that.

Which means that, at current prices, the system has a predicted payback time of about 75 years. (ï¿½10k net cost, ï¿½133pa return on investment).

I wonder if you could tell us why you chose to go first for Solar PV, when other systems, like solar thermal, would appear to offer a greater money and carbon saving per ï¿½ invested?
To my eyes, the figures don't indicate PV as being the most effective investment - and I'd genuinely like an explanation of how you see the numbers. I don't know what point I'm missing!

Having heard that there is some 'turmoil' in the industry concerning the changeover in the grant schemes, I must ask - has your grant been absolutely cast iron guaranteed? (I note that you seem to be planning an April '06 installation, by when I'd thought that the present grant regime was due to have ended.) Because without that grant, the system becomes terribly expensive.
(EDIT: Paul, the link to your site's "Grants" page doesn't work.)

I also wondered whether or not the prices quoted included the cost of installing the special meter required to sell back electricity?

dougal

Joined: 15 Jan 2005
Posts: 7184
Location: South Kent

Posted: Wed Dec 14, 05 11:35 am Post subject:

On Monday, dougal wrote:

...very peeved that there has been no improvement in the arrangements for selling surplus electricty to the grid.

Paul's choices illustrate this problem.

If he used all the energy he generated, he would cut his electricity bill by ï¿½300.
But selling it instead brings in only ï¿½133.

So could he use it himself instead?
IMHO, since his electricity is going to be generated mainly during the daytime, in summer, when its rather UNlikely that he would be consuming electricity at a rate of over 3.28kW, I think its UNlikely that he will use a large proportion. And if its less than 133/300 (call it 45%) of his generation that he'd use, then he's better off to sell it.

Minor complicating (and economically worsening) factor: Income Tax. The theoretical maximum ï¿½300 saving comes out of tax-paid income (ie its a tax-free ï¿½300 extra in his pocket), whereas, I suspect the Inland Revenue would regard the ï¿½133 as being additional income, and so taxable...

On Monday, dougal wrote:

The point was that there was little incentive for the installation of (micro)generating equipment with more output than could be used where and when it was produced.

The way that the economic factors work, as illustrated in Paul's case, is that a more economically justifiable investment for him would be a *smaller* system on an arrangement whereby he only generates approximately the amount that he is likely to steadily use - and he might even give away any surplus electricity to the grid. (This is the Windsave approach.)
My point is that the steady summer daytime *consumption* (ie when PV is generating strongly) is likely to be low.
The industry point is that the economic rules steer people away from renewable microgeneration beyond their own immediate consumption.

alternative-energy

Joined: 13 Dec 2005
Posts: 35
Location: Kent

Posted: Wed Dec 14, 05 12:10 pm Post subject:

Dougal,
You seem to be good at answering your own questions!!
When i have while... tonight... I'll post my full reply, in the meantime don't forget to factor:
the environmental considerations, IMHO this isnt all about value for money (at this stage).This is lifestyle choice as well, not purely economic... more details tonight

inflation of fuel costs, how much is it this year >15%?

cost of upgrading, scaffolidng on its own is expensive. Get the job done properly, once

personal consumption...we plan to run an electric car from the panels in time.

Getting hold of the grant now before DTI transfer it to new builds. I have cast iron grant funding for 8200 staring from 24th Novemeber and held for 6 months to get installation completed. More details on website.

Getting on with it ... I'm a half full kind of person

I live in Kent also... once its up and running you are welcome to come over and have a look and I'll go through figures with you if you like.

use of this technology is expensive at this stage... and there isnt much info so welcome the debate

Hope you find it possible to embrace

Paul
www.alternative-energy.co.uk

dougal

Joined: 15 Jan 2005
Posts: 7184
Location: South Kent

Posted: Wed Dec 14, 05 1:35 pm Post subject:

Paul - I'd love to visit and see your setup once its in.

Grants: as above, the link (from the frontpage at least) to the Grants page is broken (file not found).

Inflation & Electric Car: as I read Good's contract, any "solar" electricity from your own roof that you use yourself is still going to cost you 6p a unit. (You could make 1/2p profit by using your own Economy7 overnight electricity, but realistically that ain't gonna happen with *solar* 'cos its mostly dark then...)
Your only protection from energy inflation is the inflation in the amount that Good pay you for your generated power.

Maybe I've got this all wrong, but it does seem from Good's contract that you don't get to use your own energy "free". You must sell it to them at 4.5p/unit and then buy it back (my quote was) at 10+p per unit...

I do take and respect your point about it being a lifestyle, rather than an economic choice.
My concern is that the system is so arranged that what everyone is agreed is a beneficial result (microgeneration from renewables) should be made such an uneconomic option as to positively discourage general adoption.

alternative-energy

Joined: 13 Dec 2005
Posts: 35
Location: Kent

Posted: Wed Dec 14, 05 7:59 pm Post subject:

Hi Dougal,
I hope I have got my calculations correct but this is how I see the maths.

We use about 3000kwh each year @ 10p per kwh = ï¿½300
I would pay that any given year.

This is non-negotiable every year I would have used 3000kwp and paid the going rate.

Enter PV scenario 1

I produce 3000kwh use it all during the day and live in darkness with the fridge and TV off. I sell it at 4.5p thatï¿½s ï¿½135 I have pocketed plus the ï¿½300 I would have paid for the lecky. Iï¿½m now ï¿½435 better off.

Scenario 2 (realistic)

I produce 3000kwh and get paid ï¿½135
I use 1000kwh when Iï¿½m not generating @ 10p per kwh = ï¿½100. I therefore I am paid ï¿½35 for my electricity supply for the whole year. However I have saved ï¿½335.

Now we add in the increased prices of lecky each yearï¿½ not huge but not inconsequentialï¿½ Ok Iï¿½m in the hands of the generators but sometimes in life youï¿½ve got to be prepared to take a risk. Basically as the years go by the saving will mount I reckon, without getting my spreadsheet out we are talking 18 - 20 years. To pay back the ï¿½9041 I am payingï¿½. (I got a reduction for sorting out my own scaffolding)

Other questions
Solar thermalï¿½ we have no water tank see house pictureï¿½ major plumbing would have been needed for this.

The benefits of having a larger area is that because of % grant is per kwp it actually works out much cheaper per kwp boughtï¿½ Look at the figures on the site. Under our installation sectionï¿½ the pay back is then even quickerï¿½ even though it takes a whileï¿½

Export meters do have a cost ï¿½50- ï¿½100 has been quoted. Good Energy do not need one though.

My email is on the website if you want to come overï¿½Just let me know.

I really welcome this debateï¿½there are a lot of people out there that want to embrace this technology and getting it organised isnï¿½t easy. Thatï¿½s why I set up the websiteï¿½ in my little spare time!!

I hope you follow our progress. Yes mistakes, and Iï¿½m sure Iï¿½ve made a few already, will be made but then everyone can learn from them.
I will post these concerns on the site and deal with issues on there now, for a wider readership and permanent reference, not just those on downsizer, great though it is.

Cheers
Paul
www.alternative-energy.co.uk

dougal

Joined: 15 Jan 2005
Posts: 7184
Location: South Kent

Posted: Wed Dec 14, 05 9:43 pm Post subject:

Paul - we seem to be reading the Good Energy contract rather differently

***********
You think you might benefit by either ï¿½435 or ï¿½335 pa your scenarios 1 & 2
But I think the contract makes your benefit ï¿½135 under either scenario 1 or 2.
***********
I highlighted this concern in bold above.

I think you expect to "have your cake *and* eat it" - and I really don't think it works like that.
Simply put, under your scenario 1, Good would be ï¿½135 a year worse off. And they haven't got any electricity from you to sell to anyone else, 'cos you've used it all. I really don't think it works like that.

Have a look at https://www.good-energy.co.uk/home/33_about.html

Under "General Requirements" look at the third bullet point

Quote:

You must also have a meter that measures the renewable installation's total generation. This meter must be Ofgem accredited.

- You *must* provide an approved meter dedicated to measuring the PV output.
- That meter must measure the *totality* of your generation.

At the bottom of that page is a link to download a PDF of the contract: https://www.good-energy.co.uk/PDF/GE_Home_Gen_Contract.pdf

On the contract, find Page 5, headed "Terms and Conditions: Renewable Generation".
Right in the middle of that page is Clause 3. It states:

Quote:

The Renewable Generator agrees to sell all the benefits arising from its renewable output to Good Energy.

- You are going to sell ALL the electricity you create.
- If you sell it, you can't use it yourself without paying for it.
- If you use electricity, whether you generated it or not, its still going to cost you 10p a unit (or whatever they quote). *None* of your electricity will be free - because you have to agree to sell *ALL* of it to Good.

The idea is that you have a new meter that measures what you generate. But that you still keep and continue metering all your consumption.

I'm sorry to labour this point, but I think its kind of critical, AND I think you've misunderstood it.

So I'm doing a picture to clarify it
I think your generation meter has to be connected as per the solid green line NOT the dashed red one...

alternative-energy

Joined: 13 Dec 2005
Posts: 35
Location: Kent

Posted: Thu Dec 15, 05 7:51 am Post subject:
Dougal I suggest you contact Good Energy yourself, if you feel you need to clarify.

dougal

Joined: 15 Jan 2005
Posts: 7184
Location: South Kent

Posted: Thu Dec 15, 05 1:17 pm Post subject:

dougal wrote:

Maybe I've got this all wrong, but it does seem from Good's contract that you don't get to use your own energy "free". You must sell it to them at 4.5p/unit and then buy it back (my quote was) at 10+p per unit...

Well, I *had* got that wrong.

According to Good, you aren't actually selling them the electricity, as such, (and the literature may be slightly confusing on this).
Its the subsidy...

What you *are* selling is your generating capacity.
On which *they* then claim the Renewables Obligation Certificates, or ROCs. (One big missing piece in my jigsaw!)
Currently, you need to generate 1000 KWh (1MWh) a year to qualify for an ROC worth ï¿½56 from the Government.
Generating 2950 KWh just gets 2 ROCs (ï¿½112)
But Good can put your generation together with other folks - and in that way they can claim on the fraction in excess, in this example 0.95 of a ROC.
Hence your generating capacity is worth ï¿½165 from the government to them, which is how they can happily pay out ï¿½133 to you!
Now, its news to me that the ROC scheme could lead to you being paid by the government for using your own electricity - as in your scenario 1. I suspect that it might also be news to the government!

So
- the connection *is* going to be in the form of the dashed RED line!
- you *are* going to be protected against energy inflation, to the extent that you are using your own electricity.
- you *do* require an ofgem-approved total generation meter as part of your renewables installation, (and not, as we both recognised an expensive {ï¿½50-100 a year} net export meter).

And because Good account for their payment to you as a "credit" against your ordinary electricity bill, they think it shouldn't be regarded as taxable income. (I think that suggests there might be a tax liability if Good were overall paying you...)

Thus, on the basis that you were going to have to do the scaffolding anyway, and with a ï¿½300pa benefit, (ie net balanced account with Good - which I'd be pleasantly surprised if you achieve, implying use of more than half your electricity in daylight and mainly in the summer), the payback time would be around 30 years[.
While I accept that energy inflation is highly likely, and thus the true payback time may well be shorter, for purposes of comparison with other schemes a straight payback calculation is usual.

alternative-energy

Joined: 13 Dec 2005
Posts: 35
Location: Kent

Posted: Thu Dec 15, 05 3:23 pm Post subject:

Ok glad about that...

I'll post something to that effect when i get time on my website. You can write it for me if you like!!!.

I too have spoken to Good Energy to clarify. They were surprised that their literacy was misleading but i guess thats what happens when small print is analysed... i think they may clarify this in the future publications. I think this would be a Good idead (pun intended). It would be awful if people were put off mirco generation because of this reason.

Dougal, when the installation is underway (early April) contact me and come over to see some of the install, if you're free.

What are your plans in the area of mircogen?

Thanks

Paul

dougal

Joined: 15 Jan 2005
Posts: 7184
Location: South Kent

Posted: Sat Jan 07, 06 3:23 pm Post subject:

dougal wrote:

Well *NOW* I *am* confused...
I've just come across a Press Release on the DTI website that says that it *is* the way I first thought it was... (but they want to change it)

The DTI wrote:

The second new clause would simplify the issue of the Renewables Obligation Certificates for microgenerators by removing administrative obstacles. It would allow agents to act on behalf of microgenerators and amalgamate their output. It will also remove the requirement for a sale and buy-back agreement. Currently the legislation requires that generators that consume their own electricity must first sell it to a supplier before buying it back for their own consumption.

https://www.dti.gov.uk/renewables/renew_5.1.2.2.htm
see the second to last paragraph.

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