Bogus profits from solar power axed

solar panels on a house

UK solar industry feels chill

Complaints are purpling the British air after the government announced drastic cuts in formerly cosy subsidies for solar panels.

The Government’s decision to cut subsidies for solar energy to all but the smallest projects will threaten investment and job creation in the alternative energy sector, environmental and industry groups warned yesterday.

The Department of Energy and Climate Change (DECC) said the change to feed-in tariffs would maintain funding for households to put up panels by diverting them from larger projects.

So-called feed-in tariffs provide an operator with a guaranteed price for surplus power sold (or “fed in”) to the national grid. The subsidy is all that makes the expensive solar panel technology profitable.

Not to mention, as a complete side issue, that the many installations thus encouraged enable the government to boast about how well they’re doing on introducing “renewable” generation.

The change … will prioritise domestic and other small solar power installations of up to 50kW, which typically cover several houses and will be unaffected.

[But] feed-in tariffs for bigger projects will be slashed. Installations between 50 kW and 150kW will get 19p per kilowatt-hour, down from 32.9p, and bigger installations will have their subsidies more than halved.

I haven’t recently checked the prices of other forms of generation in the UK (I hope to have a look shortly), though I’m pretty sure these subsidies are a substantial fraction — like well over 100% — of normal prices for coal and gas generation.

It would be a short-sighted policy that provided a permanent subsidy on such a basic item of expenditure. Left to himself, the householder would choose a more modest source of energy for the same level of service in cooking and heating.

The public purse must over-extend itself in upgrading everyone to Business Class and soon run dry.

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3 Thoughts on “Bogus profits from solar power axed

  1. Alexander K on 11/06/2011 at 1:57 am said:

    Sense is breaking out in government circles at last! From where I sit in suburban outer London, people have just realised that the huge hike in gas and leccie charges just announced by Scottish Power (who are no more Scottish than my left shoe) is the harbinger of what is going to become a finacial nightmare for the new urban poor, the middle classes who are struggling to keep their heads above water, to keep their kids in a reasonable school, to prevent their local library closing, to deal with the knock-on effects of the closing of services for the elderly and for the young. The only people who are upset by the phasing out of the silly feed-in tariff are folk such as the PM’s very wealthy pa-in-law, who has made a large investment in ‘alternative energy’ which can only pay its way through huge subsidies which the poor consumer is getting lumbered with
    When the citizenty realise that most of the increase is to pay the idiotic ‘green’ taxes imposed on the power companies by the government (to allow the power companies to pay the huge feed-in tariffs), there will be hell to pay, but the notion of chucking the current government out is not a runner as all three parties are singing from the same hymn sheet! The average Brit will put up with almost anything, provided they can have a cuppatea and a scone, but everyone has their breaking point, which will be reached when elderly people whose tiny pensions don’t run to heating their accomodation start dying of Hypothermia.
    New Zealand’s ETS makes no more sense and, if the government and the Labour opposition persist with it, the public will know they are being conned and will react accordingly.

  2. Andy on 11/06/2011 at 2:55 pm said:

    The retail cost of electricity is around 15-20p per kwh, according the the UK power calculator at

    (I used my mother’s postcode of TQ12 5DY to calculate this), trying a few power usage scenarios)

    A feed in tariff of 19p per kwh is still more than the retail cost.
    At the higher rates, it was cost effective to run an arc lamp shining against a bank of solar panels to generate electricity (this was found out in several European countries when solar was generating energy at nighttime).

    Wind energy in the UK is subsidised through Renewable Obligation Certificates (ROCs). Effectively, a wind operator in the UK can derive 2/3 of their income through subsidies, 1/3 through power generation.

    All this is leading to massive power price rises, the worst being Scottish Power. It is the poor, elderly and other vulnerable communities most at risk from these prices rises as more and more of the population are pushed into fuel poverty.

    There does appear to be a fightback in the media, in particular the Daily Mail.
    This article by Nigel Lawson appeared today:

    • Andy on 11/06/2011 at 3:05 pm said:

      They are coming thick and fast from the Mail. This one from 10th June:

      Following the revelation that we’re all paying a secret stealth tax to subsidise so-called renewable energy sources, it seems like a good time to check out exactly what we are getting for our money.

      At midday yesterday, wind power was contributing just 2.2 per cent of all the electricity in the National Grid. You might think that’s a pretty poor return on the billions of pounds spent already on Britain’s standing army of windmills.

      But it’s actually a significant improvement on the last time I checked the wholesale electricity industry’s official website. At the turn of the year, the figure was 1.6 per cent. During the cold snap the turbines had to be heated to stop them freezing and were actually consuming more electricity than they generated.

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