Installing a renewable energy source in one’s home is a fairly expensive exercise, which by its very nature limits the availability to those who can raise the funds or access it from their own resources.
The fact of the matter is that for those lucky enough to be able to afford the installation of solar PV, the benefits are huge and with Government imposed subsidies (Feed In Tariffs – FIT’s), ‘investment’ returns in double figures are easily achievable for the next 20-25 years. Where else could one achieve these returns?
Additionally, don’t forget that all these subsidies have to be paid for by someone, somehow in a two stage process:
- Generation tariff – simply for producing
- Export tariff – for selling any surplus over and above one’s own consumption
So who pays for the subsidies - Feed In Tariffs (FIT's)
This is just to provide a comparison - using the worst case scenario (but smallest installation & therefore cheapest) of Solar PV
Generation Tariff = £0.1490 (14.90p) per kW + Export Tariff = £0.045 (4.50p) per kW hour - giving a total subsidised price of £0.1940 (19.40p)
and at the time of writing the prices from EDF are £0.1368 (13.68p) per unit plus an annual £65.70 standing charge
The figures would seem to speak for themselves
It would seem as though these subsidies for the few are mutualised over the energy providers entire customer base
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The suppliers pass on the cost of the Feed-In Tariffs scheme to all their electricity customers
... so the bottom line is that people who don't install renewable energy systems pay for those who do!
But what about the rest of the population (i.e. those in rented accommodation or first time buyers), who simply cannot afford to play the subsidy game and yet are expected to fund the fortunate minority who have their own renewable energy sources as well as handsomely subsidised income to go with it
Has anyone actually looked at the Governments Green Energy scheme (Energy Act 2008) from the point of view of the taxpayer, energy market or simply overall fairness in general?
In reality interference in this manner by the Government has completely distorted the energy market, furthermore the imposition of additional green levies has kept the energy price un-necessarily high and disadvantaged whole sectors of the population for the benefit of a few
Whereas another approach could have been taken
- Firstly remove all grants and subsidies
- Then make renewable sources (i.e. PV) a mandatory integral part of all future new build houses and offices (domestic & commercial). With 200,000 houses anticipated every year the costs of installation would plummet (£5,000 down to say £2,000) and within a very short time there would be a substantial pool of renewable energy generating properties (in 5 years 1 million homes), covering their own needs and exporting surpluses to the grid
The prices of renewable energy would then be linked to supply and demand and not kept artificially high because of ridiculous Government imposed rules and hand outs
Surely a far better approach by allowing market forces to prevail, with little Government interference and no grants or subsidies - resulting in potentially lower energy prices
And it gets even better
BIM40520 - Specific receipts: domestic microgeneration: Income Tax exemption for domestic microgeneration
With effect from tax year 2007-08 there is an exemption from Income Tax for an individual’s income from the sale of electricity generated by a microgeneration system where:
- the system is installed at or near domestic premises occupied by the individual, and
- the individual intends that the amount of electricity generated by the microgeneration system will not significantly exceed the amount of electricity consumed in those premises
For the purpose of this exemption ‘domestic premises’ means premises used wholly or mainly as a separate private dwelling
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