Saturday 28 July 2012

Centrica defends 23pc leap in British Gas energy profits


Centrica defended a 23pc surge in profits at its British Gas household division, insisting the jump was due to the comparison with a “weak” 2011.

Chief executive Sam Laidlaw refused to bow to demands to cut energy prices - amid analyst predictions that Centrica was likely to increase its consumer tariffs.

Operating profits in the British Gas division rose to £345m in the six months to the end of June. The rise contributed to a 15pc increase in group profits, to £1.45bn for the period.

Ann Robinson, at uSwitch.com, said: “These soaring profits show that British Gas could and should cut its prices ahead of winter.”

Mr Laidlaw insisted the criticism was “purely because people have landed on a comparison with a prior year that was particularly weak”.
Profits had been low in the first half of 2011 due to an unusually warm winter, and gas consumption had increased again this year, Centrica said.

But gas consumption increased just 3.5pc, with the vast majority of a 21pc leap in gas supply revenues in fact due to increased prices.

Centrica said the bill rises has been needed to cover rising costs of commodities, increased social and environmental levies that it collects for the Government, and higher energy transmission costs, set by the regulator.

Mr Laidlaw said “nobody” he had spoken to felt its British Gas operating margins of 7.2pc - up from 6.9pc in 2011 - were unreasonable.

He added: “Because British Gas residential has got 16m customer accounts, the residential figure is a lot of money. But our profits equate to £3.50 a month per account before tax.”

Profits in British Gas’s business supply division slumped 27pc to £93m, as customer numbers fell. Centrica said this was due to some of the business customers going bust, and some switching supplier.

full article

Wednesday 18 July 2012

Great diesel myth


Diesel cars’ reputation for saving drivers money has been shattered by research showing they are often more expensive than petrol models.

It concludes that ‘diesels are no longer the default option for frugal motoring’.

While diesel engines may deliver more miles per gallon, it can take up to 14 years before they save the average driver any money.

This is because of the higher cost of diesel cars and of the fuel, which can be almost 6p a litre more expensive than unleaded petrol.

A report today by the consumer watchdog Which? says: ‘With drivers having to pay a premium for a diesel car – typically £1,000 to £2,000 more on a new car – our tests reveal it could take up to 14 years to recoup the up-front costs in fuel savings.

‘Lower pump prices for petrol and advances in petrol-engine efficiency mean petrol cars now often provide better value for money.’

Ironically, the findings come as diesels make up more than half of the new car market for the first time.

Which? compared similar-spec petrol and diesel versions of six popular cars – the Ford Fiesta, Vauxhall Astra, Volkswagen Tiguan, VW Sharan, BMW 5 Series and Peugeot 308 SW.

It calculated the annual fuel bill for each based on an average mileage of 10,672, and concluded: ‘In four out of our six examples, the petrol engine was the best choice for a driver covering 10,000 miles a year.

The report says diesels have become more refined than in the past, but ‘with petrol now around 5.5p a litre cheaper, and some makers offering super-economical petrol engines, it’s getting harder to justify the price premium’.

It adds: ‘Not only have we moved on from the bad old days of clattery diesels, but we’ve also moved on from diesels being the default option for frugal motoring.’

In the year to May 2012 diesel cars accounted for 51 per cent of new car sales, with petrol models at 47.5 per cent. Alternative fuel cars accounted for 1.5 per cent.

full article

Sunday 27 May 2012

Solar Panel Calculator


The big winner for those paying to have solar panels installed is not thesavings on their electricity bills from generating green electricity to use, but the income derived from subsidies under the Feed-in Tariff scheme.

Through this they get paid for every unit that they generate whether they use it or export it to the grid.

The subsidy is currently paid at two rates, the Generation Tariff, of 21p per KWh (Kilowatt Hour) for all energy generated, topped up with the Export Tariff, which adds an extra 3.1p per kWh for electricity exported to the grid.

That return is tax-free, backed by Government guarantee for 25 years and has an added benefit in that it is index-linked to retail prices inflation.

As reported above subsidies and their lifespan will now fall from 1 August. But crucially the rules are that those who install certified solar panels systems before set cut-off dates are locked in at that period’s rate for 25 years, so homeowners who beat the deadline should have nothing to fear, however much the Feed-in Tariffs are cut by in the future.

Of course, the other added benefit does come from a reduction in bills, as when homes are using solar energy they are not racking up electricity costs from suppliers.
So is this worth doing?

There are three big things to consider about buying solar panels: the direction your roof faces in, where your home is and the size (and quality) of the installation.

A south facing roof, in southern England, will deliver the best returns and the largest a home solar panel system can be to get the best Feed-in Tariff rate is 4kWp. Adjusting each of these factors of location, direction and size will impact on performance and what you get back.

The Energy Saving Trust has a calculator on its site that can work out potential returns for you, although bear in mind that the £10,000 figures quoted for installation costs are more expensive than what solar firms are now suggesting they can do.

We crunched the numbers on the 3kWp system example that Evo Energy said would cost about £7,000, on a south facing roof, in South East England, for a home with £35 per month electricity bills.

Generation Tariff - £534

Export Tariff - £38

Energy bill saving - £79

Total return - £651

Disregarding the savings on electricity bills, that delivers a total return of £572 from Feed-in Tariff payments.

If a householder paid £7,000 for the solar panels, that equates to a 8.2 per cent annual income return, tax-free. (Including energy bill savings it is 9.3 per cent.)

full article

Solar panel payments slashed


Solar panel returns will be slashed again from August, with a cut to payments, their lifespan reduced by five years and plans to regularly cut back on subsidies revealed.

The major part of the Feed-in Tariff solar panel subsidies will be cut by almost a quarter, for new installations, the Government confirmed. Meanwhile, the period that they are paid over will fall from 25 to 20 years.

The move to cut solar subsidies under the Feed-in Tariffs scheme means homeowners hoping to take advantage of current generous rates must act swiftly - but they have been given an extra month to join.

In an announcement today, the Department of Energy and Climate Change (DECC) said changes to the Feed-in Tariffs solar subsidies scheme would arrive for all new installations after 1 August - a month after the planned 1 July date.

The amount homeowners are paid for generating energy on an average-sized installation will fall from 21p to 16p per kilowatt hour (Kwh).

However, the tax-free element and valuable Retail Prices Index inflation-linking of returns will stay and homeowners will see what they are paid for the small amount of energy they export back to the grid rise from 3.2p to 4.5p per Kwh.

Rolling cuts to returns will also be brought in, with average reductions of 3.5 per cent every three months. This will be based on take up of panels and if it is high returns could fall faster, while if it is low cuts could be delayed.

The DECC claimed that the new tariffs would give a tax-free, inflation-linked return on investment of more than six per cent for most typical, well sited solar panels.

This a is a far cry, however, from the 10 per cent-plus returns some homeowners with panels installed are currently getting.

Tax-free returns of more than 10 per cent a year

The Government took the axe to the Feed-in Tariff in late 2011 – hacking the amount that householders get paid for generating electricity from 43.3p per unit down to 21p – dramatically reducing the potential rewards.

This triggered a big decline in the take-up of panels, but the solar industry says that a rapid fall in the cost of installations has now bumped up overall returns again.

Tax-free returns nearing 10 per cent a year from solar panel subsidies can be achieved again, they say. And even supermarket giant Tesco has got in on the act - offering 20 per cent of its panels this summer.

When This is Money crunched the numbers on Tesco's £6,799 3.92KWp system, using official figures from the Energy Saving Trust, we found that this could deliver homeowners with optimally placed roofs potential returns starting at 12.5 per cent a year.

In a piece of good news for those considering panels, the Government extended the deadline for new installations to keep the old 21p tariff by one month - previously cuts had been scheduled for 1 July.

Those interested must act swiftly, however, as installation lead times of a month to six weeks mean that they may need to book solar panels by mid-June.

The Government claimed that by laying out its future plans for solar panels and the rolling three-month cuts, it would bring 'certainty' to the industry and installations prospects.

Energy and Climate Change Minister Greg Barker said: 'We can now look with confidence to a future for solar which will see it go from a small cottage industry, anticipated under the previous scheme, to playing a significant part in Britain's clean energy economy.

'I want to send a very clear message today. UK solar continues to be an attractive proposition for many consumers considering microgeneration technologies and that having placed the subsidy support for this technology on a long-term, sustainable footing, industry can plan for growth with confidence.'

full article