Householders who are in the process of having solar panels put on their roof have six weeks to complete the job or face seeing the predicted income they generate slashed after the government said it was cutting feed-in tariffs by 50%.
Despite pledging to be "the greenest government ever", the Tory-led coalition last week shocked the renewables sector by announcing that only installations completed by 12 December would get the full payments they were promised. Hundreds of householders who had signed contracts to have panels fitted have now pulled out and others are expected to follow.
More worrying, say installers, is a proposal to make future feed-in tariff (Fit) payments dependent on the home meeting tough energy performance standards. Around 85% of UK homes would need to spend around £5,600 to meet the requirements. Such a move, which is subject to the consultation exercise announced by ministers, would kill the solar industry, insiders say.
The much-trailed decision to halve the Fits – the amounts those installing photovoltaic panels on their roof get for each unit of electricity generated – sent the solar industry rushing for its calculators in a bid to work out whether solar panels will still be worth installing. It looks as though all but the most committed environmentalists will decide it is not worth the hassle.
Under the original scheme, householders had been promised the higher Fit payments provided they installed their panels before 1 April 2012. Since the scheme's introduction in 2010, around 100,000 householders have taken advantage of the generous terms.
So what do the changes mean?
• The feed-in tariff payable on installations of up to 4kW used to attract a generation rate of 43.3p per kWh. This will be reduced to a proposed 21p for all installations with an eligibility date on or after 12 December – unless the government relents voluntarily, or is forced to by a legal challenge. This slashes their viability; the financial return on the investment falls from around 12% to 5%-7%.
• If you are in the middle of an installation, you need to have it completed and registered with your power company by 12 December. If your supplier won't play ball and demands paperwork by 5 December (as some reportedly have), switch to Good Energy, which says it is planning to take registrations right up to the deadline.
• If you complete your installation between 12 December and 1 April, you will get the new Fit of 21p, but won't have to conform to any energy efficiency measures.
• Perhaps the biggest change, and the one that has attracted the least publicity, is the plan to make the payment of Fits dependent on other energy efficiency measures. Ministers have indicated they want only homes that have an energy performance certificate rating of C or better, ruling out many homes, as it will be prohibitively expensive. Most pre-1919 homes require the installation of some or all of the following measures: loft insulation, cavity wall insulation, heating controls, hot water cylinder insulation, replacement boiler and solid wall insulation – at a typical cost of £5,600.
Critics say that for the hardest-to-heat houses, solar PV is a practical way of reducing carbon emissions, and probably much less disruptive than solid wall insulation.
• The proposals are also expected to put an end to free solar installations (often called "rent-a-roof" schemes) through a new multi-installation rate – where an individual or company receives Fits from more than one installation. They will get just 16.8p per kWh for systems up to 4kW, a rate which the chief executive of HomeSun says makes the business no longer worth pursuing.
Friends of the Earth's energy campaigner Donna Hume says the changes have cast a shadow over the UK's thriving solar industry. "The government should be encouraging more people, not fewer, to save money by making their own electricity, freeing us from the stranglehold of the big six energy firms which are pushing up our bills."
A spokeswoman for the Department of Energy and Climate Change says it is consulting on proposed new tariffs to protect consumers from footing the bill for excessive subsidies: "The government stands by its pledge to be the greenest government ever. We are taking action to ensure that the Fits scheme stays within budget, and to put the solar industry on a steadier, clearer and sustainable growth path, avoiding boom and bust.
In 2010, anyone spending the typical £13,000 to fit an average sized (2.5kW) system would receive around £900 a year in payments, on top of a £140-a-year saving in reduced electricity bills. Feed-in tariffs are paid for 25 years, tax-free, and rise in line with inflation. To really make it work, you had to plan to stay in your home for at least 15 years. The price of installations has fallen by 20%, which is why the industry expected a cut to Fits from next April.
Gabriel Wondrausch, the man behind one of Britain's longest established installers, SunGift Solar, says investors will be still able to get an average 5%-7% return under the new rules. He says that by switching to cheaper Chinese panels (rather than the better European ones he favours), it is possible to make a decent-ish return. His estimates beat the government's claim that the return is now 4.5%.
However, he predicts the changes will lead to a return to pre-Fits days, which saw only the keenest "greens" making the investment – particularly if the government goes ahead with its plan to impose the energy performance requirement, which will rule out most potential buyers if they have to spend £5,000 on a new boiler and other measures.
full article
Sunday 13 November 2011
Saturday 15 October 2011
Fuel poor could miss out on help
The BBC has learned that not everyone eligible for the new Warm Home Discount will receive it because of funding limits.
Warm Home Discount replaces the current social tariffs provided by the energy firms to help customers on low incomes.
More than half a million pensioner households will get £120 off their bills this winter.
But other people suffering fuel poverty may miss out because of caps imposed by other energy companies.
Changing subsidies
While many pensioners qualify automatically for fuel poverty subsidies, other people have to satisfy a number of other criteria.
To be eligible most firms require customers to be in receipt of a means tested benefit, and either have a child under 5 or in receipt of disability benefit.
But Radio 4's Money Box has learnt that the companies set limits on the number of people they are prepared to offer subsidies to.
Continue reading the main story
“Start Quote
We're looking for about 40 - 45,000 customers, so it's a case of first come, first served”
Valentine Mulholland Energy policy officer, EDF Energy
EDF Energy will offer subsidies to about 45,000 of its customers.
And according to EDF energy policy manager Valentine Mulholland, it will be a case of "first come, first served" for the rest.
Four of the other "big six" energy companies which Money Box spoke to said they too would be capping their fuel poverty funds.
Scottish and Southern Energy said it would help a minimum of 4,800 customers, although it expected to be able to help more.
Limited funds
However British Gas has a broader set of criteria than the other companies.
It is inviting applications from customers who have a household income of below £16,190 and spend more than 10% on fuel for adequate heating.
Ian Peters, the managing director of energy at British Gas, told Radio 4's Money Box programme "no eligible customer" would lose out:
"If they apply before the end of January for the first year, then I would have every confidence that they would get £120. I will guarantee we'll pay them," he said.
Continue reading the main story
“Start Quote
If they apply before the end of January for the first year, then I would have every confidence that they would get £120”
Ian Peters Managing director of energy, British Gas
Jonathan Stearn of Consumer Focus said he welcomed the move by British Gas to help all those eligible, but other companies needed to do more.
He said: "If energy firms are able to offer help to more people, as British Gas has said it will be doing, this would clearly be welcome.
"But there is a wider issue of how to fund helping more vulnerable households. This needs to be tackled as part of a comprehensive fuel poverty strategy."
BBC Radio 4's Money Box is broadcast on Saturdays at 1200 BST, and repeated on Sundays at 2100 BST.
full article
Warm Home Discount replaces the current social tariffs provided by the energy firms to help customers on low incomes.
More than half a million pensioner households will get £120 off their bills this winter.
But other people suffering fuel poverty may miss out because of caps imposed by other energy companies.
Changing subsidies
While many pensioners qualify automatically for fuel poverty subsidies, other people have to satisfy a number of other criteria.
To be eligible most firms require customers to be in receipt of a means tested benefit, and either have a child under 5 or in receipt of disability benefit.
But Radio 4's Money Box has learnt that the companies set limits on the number of people they are prepared to offer subsidies to.
Continue reading the main story
“Start Quote
We're looking for about 40 - 45,000 customers, so it's a case of first come, first served”
Valentine Mulholland Energy policy officer, EDF Energy
EDF Energy will offer subsidies to about 45,000 of its customers.
And according to EDF energy policy manager Valentine Mulholland, it will be a case of "first come, first served" for the rest.
Four of the other "big six" energy companies which Money Box spoke to said they too would be capping their fuel poverty funds.
Scottish and Southern Energy said it would help a minimum of 4,800 customers, although it expected to be able to help more.
Limited funds
However British Gas has a broader set of criteria than the other companies.
It is inviting applications from customers who have a household income of below £16,190 and spend more than 10% on fuel for adequate heating.
Ian Peters, the managing director of energy at British Gas, told Radio 4's Money Box programme "no eligible customer" would lose out:
"If they apply before the end of January for the first year, then I would have every confidence that they would get £120. I will guarantee we'll pay them," he said.
Continue reading the main story
“Start Quote
If they apply before the end of January for the first year, then I would have every confidence that they would get £120”
Ian Peters Managing director of energy, British Gas
Jonathan Stearn of Consumer Focus said he welcomed the move by British Gas to help all those eligible, but other companies needed to do more.
He said: "If energy firms are able to offer help to more people, as British Gas has said it will be doing, this would clearly be welcome.
"But there is a wider issue of how to fund helping more vulnerable households. This needs to be tackled as part of a comprehensive fuel poverty strategy."
BBC Radio 4's Money Box is broadcast on Saturdays at 1200 BST, and repeated on Sundays at 2100 BST.
full article
Energy companies' profit margins soar
Britain’s big energy companies are making profit margins of £125 a year from every household in the UK, up from just £15 in June, according to Ofgem, the energy regulator.
The eight-fold increase follows recent above-inflation rises in household energy bills and has led to accusations that the energy firms are profiting from consumers’ misery.
Ofgem, which said that the average annual gas and electricity bill is now £1,345 per household, has called for “radical reform” in the way that the so-called big six energy companies deal with their customers. The regulator has instructed the companies to make it easier for consumers to compare prices and switch suppliers
full article
The eight-fold increase follows recent above-inflation rises in household energy bills and has led to accusations that the energy firms are profiting from consumers’ misery.
Ofgem, which said that the average annual gas and electricity bill is now £1,345 per household, has called for “radical reform” in the way that the so-called big six energy companies deal with their customers. The regulator has instructed the companies to make it easier for consumers to compare prices and switch suppliers
full article
Wednesday 21 September 2011
Energy suppliers and Government launch Warm Home Discount
EDF Energy last week became the final one of the Big Six suppliers to reveal inflation-busting increases.
Yet Your Money can reveal a bid to ease the pain of rocketing bills will ignore millions of families who need help the most.
Experts fear this year’s double dose has plunged another 840,000 households into poverty, leaving 6.9 million with a daily struggle to afford heating. Until now, suppliers tried to lessen the blow by offering cheap-rate deals – known as social tariffs – to those facing hardship.
In 2009/10, firms provided an average discount of £84 each to 1.6 million customers. But many people don’t know they exist and suppliers have different rules on who qualifies.
To tackle this, the Government has launched the Warm Home Discount, setting legal targets for suppliers to help the most needy.
Under the scheme, costing £1.1billion over four years, those deemed the most vulnerable will automatically get electricity rebates of £120 in the first year, eventually rising to £140.
You don’t have to apply, instead letters will be sent to those who qualify, with the money credited to accounts by next March. There are different arrangements for pre-payment meter customers.
The vast majority of people getting help – more than 600,000 households – are pensioners, the Department of Energy and Climate Change said.
Yet only households who get the guarantee element of pension credit will receive the money this winter.
Pensioners who only get the savings element, because they’ve put money aside, won’t get the rebate until later years, depending on age.
PAYMENTS
The boost is in addition to winter fuel payments for pensioners.
This will see households with someone under 79 get £200 this year, down from a temporary jump of £250 last year.
For those over 80, the amount is down from £400 to £300.
It’s also in addition to cold weather payments that older people (along with disabled households and families with children under the age of five on income-related benefits) get in extreme conditions during the worst months of the year.
But, while the scheme is a positive step, critics are worried about the many others facing a bleak winter.
Industry regulator Ofgem is talking to suppliers about how to provide emergency help but the DECC admits as few as 26,000 households in what it calls a “broader group” will get the £120 rebate this year.
This will rise to 650,000 by 2014/15 but they will have to apply rather than get the rebate automatically.
Yet it’s a fraction of those struggling to make ends meet, with campaigners fearing this year’s price hikes will leave as many as 12 million people in “fuel poverty” – defined as spending at least 10% of their income on energy.
The automatic rebates for pensioners came after the Department for Work and Pensions shared information with suppliers about who is in need.
DEAL
“We want to see more measures to protect the poorest from energy price rises so that families aren’t sitting in the cold this winter.”
Suppliers’ trade body the Energy Retail Association says social tariffs will be offered for the next four years, so those who don’t get rebates at first still benefit from cheaper deals. Policy adviser Alun Rees said: “The rebates are just one way of helping those in fuel poverty. Another is energy efficiency and suppliers will have invested £5.5billion in providing things such as insulation by the end of 2012.”
EDF Energy will raise gas prices by 15.4% and electricity by 4.5% in November, following recent hike announcements by British Gas, npower, E.ON, Scottish Power and Scottish & Southern Energy.
Since November, suppliers have increased average prices by £224, or 21%, leaving the typical family facing an annual bill of nearly £1,300.
Tom Lyon, energy expert at comparison website uSwitch.com, said: “You cannot have two consecutive rounds of energy price hikes in less than a year without seeing casualties.
“The visible victims are the 6.9 million, or over a quarter of all households, now living in fuel poverty, but they are more than matched by those who struggle to pay their bills and are starting to self-ration their usage.
“We are in danger of seeing energy becoming an unaffordable luxury instead of a household basic.
“My concern is the impact will really become apparent this coming winter.
full article
Yet Your Money can reveal a bid to ease the pain of rocketing bills will ignore millions of families who need help the most.
Experts fear this year’s double dose has plunged another 840,000 households into poverty, leaving 6.9 million with a daily struggle to afford heating. Until now, suppliers tried to lessen the blow by offering cheap-rate deals – known as social tariffs – to those facing hardship.
In 2009/10, firms provided an average discount of £84 each to 1.6 million customers. But many people don’t know they exist and suppliers have different rules on who qualifies.
To tackle this, the Government has launched the Warm Home Discount, setting legal targets for suppliers to help the most needy.
Under the scheme, costing £1.1billion over four years, those deemed the most vulnerable will automatically get electricity rebates of £120 in the first year, eventually rising to £140.
You don’t have to apply, instead letters will be sent to those who qualify, with the money credited to accounts by next March. There are different arrangements for pre-payment meter customers.
The vast majority of people getting help – more than 600,000 households – are pensioners, the Department of Energy and Climate Change said.
Yet only households who get the guarantee element of pension credit will receive the money this winter.
Pensioners who only get the savings element, because they’ve put money aside, won’t get the rebate until later years, depending on age.
PAYMENTS
The boost is in addition to winter fuel payments for pensioners.
This will see households with someone under 79 get £200 this year, down from a temporary jump of £250 last year.
For those over 80, the amount is down from £400 to £300.
It’s also in addition to cold weather payments that older people (along with disabled households and families with children under the age of five on income-related benefits) get in extreme conditions during the worst months of the year.
But, while the scheme is a positive step, critics are worried about the many others facing a bleak winter.
Industry regulator Ofgem is talking to suppliers about how to provide emergency help but the DECC admits as few as 26,000 households in what it calls a “broader group” will get the £120 rebate this year.
This will rise to 650,000 by 2014/15 but they will have to apply rather than get the rebate automatically.
Yet it’s a fraction of those struggling to make ends meet, with campaigners fearing this year’s price hikes will leave as many as 12 million people in “fuel poverty” – defined as spending at least 10% of their income on energy.
The automatic rebates for pensioners came after the Department for Work and Pensions shared information with suppliers about who is in need.
DEAL
“We want to see more measures to protect the poorest from energy price rises so that families aren’t sitting in the cold this winter.”
Suppliers’ trade body the Energy Retail Association says social tariffs will be offered for the next four years, so those who don’t get rebates at first still benefit from cheaper deals. Policy adviser Alun Rees said: “The rebates are just one way of helping those in fuel poverty. Another is energy efficiency and suppliers will have invested £5.5billion in providing things such as insulation by the end of 2012.”
EDF Energy will raise gas prices by 15.4% and electricity by 4.5% in November, following recent hike announcements by British Gas, npower, E.ON, Scottish Power and Scottish & Southern Energy.
Since November, suppliers have increased average prices by £224, or 21%, leaving the typical family facing an annual bill of nearly £1,300.
Tom Lyon, energy expert at comparison website uSwitch.com, said: “You cannot have two consecutive rounds of energy price hikes in less than a year without seeing casualties.
“The visible victims are the 6.9 million, or over a quarter of all households, now living in fuel poverty, but they are more than matched by those who struggle to pay their bills and are starting to self-ration their usage.
“We are in danger of seeing energy becoming an unaffordable luxury instead of a household basic.
“My concern is the impact will really become apparent this coming winter.
full article
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