Archive for September, 2009

As currently proposed, the feed-in-tariffs are likely to be the exclusive domain of the middle class with lower income households shut out from participating.

To prevent the FiT being accessible only to the middle classes, it needs to be set at a level that allows banks and private equity providers to step in and cover the capital costs of PV while sharing some of the benefit with householders.

In order to be attractive, the return needs to be between 7.5% and 8.5% (ungeared) depending on interest rate and how the FiT revenues are taxed. Some institutional investors say it needs to be higher, but if we stick to this figure we stay on the conservative side.

Taking PV as an example, the FiT as currently proposed would generate a 3-4% return in a mature market (e.g. £4700/kWp installed for a household system as we’re seeing in Italy). In a less mature market (e.g. £5.5k/kWp) the return would be 1.9%.

Looking at it another way, in order to achieve a 7.5% return in the real world based on the proposed FiT, the installed price of PV would need to be £3350/kWp! The other £1.35k is value shortfall (i.e. the difference between £3.35k and £4.7), which might be covered by an eco-minded middle income household but will certainly not be attractive to a low income household.

Bottom line: the proposed FiT for PV is too low. In order to provide an 8% return in a mature market (£4.7k/kWp installed for a small system), the FiT needs to be set at around 55p/kWh. For the largest schemes (>100kW), this would step down to 37p.

Sorry I’ve departed from my usual policy of putting all the underlying numbers up. The calculations are pretty straightforward but they require a spreadsheet and I don’t have a public facing version yet.

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Linked In seems to be nothing but a tool for head hunters. I’m not looking for a job so what good is it? I find my finger hovering over the delete button.

Has Linked In done anything for you? Phil? Mel? Anyone?

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Although PAYS has been conceived to address retrofit, developers and RSLs are hoping it might also reduce the financial burden of meeting more stringent upcoming regs for new build.

In theory it works like this: by capitalising future energy savings, developers could afford to put in the low carbon measures they need to in order to hit strict limits on emissions. The occupants then use a portion of the savings to pay off this capital lump.

Developers hit their targets and occupants get savings. Everyone’s a winner. But in the case of new build, what are the savings measured against? The UKGBC final PAYS report suggests that:


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homespun PV at Alex’s house

I spent yesterday at Alex Moody’s house (ex-colleague at XCO2) eating barbequed pizza (awesome) and wiring up a home-made PV panel from single cells (even better). Equipped with an almost-hot-enough soldering iron, I was a one man tabbing line while Alex put the wooden box together. When I left in the late afternoon, Alex took over and finished the lot.


This panel will one day power Alex’s LED-based garden lighting. Next steps are to get the string working with the charge controller and battery.

At Fontenergy, we’re doing some industrial PV installations in Italy. I’m really looking forward to seeing them up and running but I can’t help feeling that building a single 60W panel from scratch might be more satisfying (if in a slightly different way) than seeing a rooftop covered with someone else’s panels.

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links for 2009-09-02

  • Something to think about in the current UK energy debate:

    The CEO of the French state-owned company Aveva said it was impossible to determine the final cost of the Finnish project, raising concerns that there could be more charges to come. The project, originally due to come on line in 2009, is already three years behind schedule.

    But don't worry, it's not all bad news. Apparently despite this dismal performance on the first new Western nuclear plant in decades, Aveva's order backlog is at a record high. Hurray!

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