I caught part of the discussion before the Select Committee on TV yesterday. Some members of the PV industry were saying that they won't be able to sell PV after the 12th because they will be unable to provide return on investment forecasts. That's because the tarrif after 12th December hasn't been set, it's just out for consultation and could in theory be higher or lower.

I didn't take notes but their evidence was powerfull. One man from the rent a roof side of the industry pointed out that the social housing sector had just woken up to the fact that PV was a free way fpr them to reduce fuel poverty when the government killed it off. He thought something like 112,000 installations in the social housing sector had been cancelled.

They asked if the treasury had taken into account the loss of revenue to HMRC that was likely to occur as a result of the industry contracting and workers being made redundant.

The committee had a good go at the man from DECC for their explanation of the reason for the cut but they presented hockey stick graphs showing that the number of installations had rocketed in the two months prior to the announcement of the changes.

Several times people said that they thought this might drastically impact the green deal because of the loss of confidence.

If I remember correctly it was said DECC expected the market to contract by 90% ! Did I hear that right?

I don't know if it's on iplayer .

This looks like it:

http://www.bbc.co.uk/programmes/b0184nq4.html

<blockquote><cite>Posted By: Joiner</cite>........ although Chris Huhne comes out as something of a prat. There's a surprise.</blockquote>

I wonder how on earth Huhne manages to find himself in positions of authority, as he's consistently come across as an imbecile over the years. Listening to him on Countryfile last night was similar, he quite clearly hadn't got a clue.

I'm listening to the last part of it right now, whilst trying to get on with the plans for the house........

Barry Gardiner is getting well stuck in over the crap presentation of "evidence" in the form of a dodgy graph. The imbeciles in the DECC clearly had faith that an asymptotic plot could, in any way shape or form, represent reality. Someone needs to give them a lesson in bounded data sets............

Hence the "hidden tax" bit. You can look at it as someone else paying the subsidy, it just doesn't pass through the government's (Treasury) books. Bit like a slush-fund. Gives ministers the chance to put their hands and plead "Don't blame us!"

I watched it too. I thought the solar people did very poor job of clarifying that the money comes from energy companies/consumers and not government.

Joiner you need to watch the second half because the DECC people did make some good points and showed that they are certainly not idiots. One telling point for me was that the fellow from the STA said 'we told them to reduce it by 25% in the summer' whilst Greg Barker read out what was actually put in the report which said 'reduce it by 25% at the end of the year (or was it april?)', which really isn't the same thing. Certainly you need to be very careful what you say in a select comittee because anything which is demonstrably wrong/misleading makes you look very bad and colours everything else you just said.

Noticeable that the professionals (DECC civil servants and the MP Greg Barker) were much better at answering questions without blustering - I guess they've had a lot of practice. It is very hard to think on your feet in that sort of environment - I've had to do it a couple of times and you can see that one of the things that makes a good politician is the ability to remember and marshall relevant info and present it cogently under pressure. For example when Chairman Tim Yeo asked if the large costs drop since the summer menat they had all being making excessive profits for 6 months, no-one made the obvious point that, no - prices just went down and _consumers_ made more profit, and the companies used some of the headroom for expansion.

The discussion on the difference between '80p' (actually a difference) and '£80' (a ridiculous fiction assuming no-one reviewed anything) was very good. Zak Goldsmith certainly has his head screwed on. Even after all that discussion I still found the numbers confusing. It would be good to have the various projections spelled out properly in order to assess them, because actually that's the nub of the argument.

On a randomly related point I was in a caving hut in Yorkshire this weekend and one of the other people there was Stephen McCabe who founded 35 degrees - the people who put up a couple of solar farms in Cornwall before that was kicked in the head. Oddly enough he was pretty unimpressed with DECC and maintained that the nonsensical budget item is something they've cooked up after the fact as an excuse, and there will be some other reason for the dogmatic and precipitous change. I have no way of knowing who's right there.

Can we see the ofgem figures for registrations to check DECC's hockey-stick graph? How far behind is their published info?

I managed to get DECC to publish the data that they say they used in making the graphs.

Not surprisingly they don't match.

I think the graphs they showed had data from the start of FiTs in April 2010, whereas the published data only goes back to April 2011. But there is no way the right hand end (the 'near vertical' line as Barker called it) is in the data as published. It is also quite clear that the big jump in installation numbers has happened after the consultation and cut announcement.

The data is here - http://www.decc.gov.uk/en/content/cms/statistics/energy_stats/source/electricity/electricity.aspx under Weekly Solar PV installation and capacity in the section headed Monthly Tables. I believe DECC now plan to update this weekly.

See also my post on it all - http://www.caerdelyn.co.uk/blogg/where-is-the-truth.html

slightly moving the discussion side ways , I was just talking to a guy who recons they should be able to offer their clients 9-10% return with the lower rate , still very good . So perhaps the concern of installation dropping off dramaticially is unrealistic , you'd have to remove the installs from the last 3 weeks from any long term view though as this spike would pervert the average .
If DECC want installs to drop by 75% to keep to long term virtual budget restrictions , they'll have to try harder to put people off PV.

It's all self interest , even if it's lobbying for the 'greater good' as the self will benefit

One of the points made by the shiny suit rent-a-roof chap was about business planning. He made the point (not at all well) that he had £10m worth of panels on the way to the UK by ship that were ordered before the announcement of the FIT cut, yet would arrive after it. I think he was trying to plead that the industry needed at least three months notice of a change in order to be able to adjust their business plans and quarterly order-ahead schedules, but to be honest he didn't make the point very well (although, unlike the minister and the PS, at least he wasn't deliberately deceptive).

"One of the points made by the shiny suit rent-a-roof chap was about business planning. He made the point (not at all well) that he had £10m worth of panels on the way to the UK by ship that were ordered before the announcement of the FIT cut, yet would arrive after it. "

The real head scratcher for me over these fits schemes in various European countries is that the main beneficiary has been Germany and China. Apart from installers, who can switch over to the next grant funded eco technology, what real PV industry has been created in the UK?
Bosch have been laughing all the way to the bank

I'm sure that the main British based manufacturers Sharp and Romag have been making lots of sales.
I'm also reliably informed that a number of Chinese manufacturers were looking to invest in the Uk as a manufacturing base as once transportation from china is removed from the equation manufacturing costs are not hugely different. However all the chopping and changing with tariffs clearly undermines investor confidence, as demonstrated by the evidence from the solar industry representatives at the Select Committee.

<blockquote><cite>Posted By: fostertom</cite>Manufacturing of this type of product, par excellence, must be very wage-insensitive. The no of 'workers' with pay packets must be tiny compared to the value of output.

All the local (i.e. in country of manufacture) cost in the product is interest on capital investment - in the shed and the machines in it. And maybe raw materials. A tiny no of maintenance men and administrators perhaps. More waged costs might be in distribution - drivers and administrators.

Very little cash gets into wage packets, in such industries. So what's in it for a country like UK to try to attract such manufacture to its shores?</blockquote>

The big problem for us is that semiconductor fab plants are expensive to build and need a lot of skills that we don't have. They are also notoriously fickle to set up and get good yields. I was peripherally involved with a company that decided to move their fab plant from Switzerland to Italy. They shifted the whole thing, lock stock and barrel, primarily because Italy were offering good incentives to semiconductor companies wanting to move there. Having moved the plant, which had been running well in Switzerland, with good yields, they spent over a year trying to get it working in Italy. This was a company that already had the skills and knowledge and knew what they were doing, plus they used the same machines, so it illustrates well how difficult it can be to establish an industry base with a new workforce.

You're right when you say that it's wage-insensitive, but it' very skill and knowledge sensitive (which is why the Germans are so good at it, despite their high wages).

Posted By: JSHarrisright when you say that it's wage-insensitive, but it' very skill and knowledge sensitive

Meaning skills and knowledge reqd resident in the destination country; not gd enough for skills and knowledge to exist in the 'parent' country? Those skills and knowledge reqd long-term, or just during set-up?

I still don't see why Italy, or UK shd go out to attract such production facilities, when they offer little in terms of employment/wage packets long term (once initial construction/set-up is complete). All the design/marketing/head office staff employment and pay packets likely to be elsewhere, A bit of local biz tax, but little income/corp tax if the parent co is clever. Share dividend income (share of profits if any) cd be accruing to anyone anywhere else in the world. So why bother? A bit like Sellafield welcoming the world's nastiest rubbish.

Hurray for BOT,
there's alway; Romag (NE), Sharp (Wales) triple solar ( london ?), Pv Crystalox ,
REC not UK but Norwegain and nice ( claim 1 year energy return on product )
OK so most of these just assemble in the UK, but it's a start at putting the cash back into the UK

I got my panels from Schuco ( German) in the end , so I'm not one to talk , but in the rush it was the best bet at the time.