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Renewables tariff-cut sounds a death knell for UK solar
I have calculated the financial benefits of installing solar power (photovoltaic) in the home, and under current tariffs, it just makes sense, if you factor in the environmental benefits as a persuading factor.
Modern panels are estimated to last for 25 years, as the yield decays year on year. A 6.2kWp system will generate about 5,100kWh per annum. I’m being generous and assuming that this yield will last for the lifetime of the panels, which it won’t, and offsetting that against the possibility of the panels lasting more than 25 years, which they might.
The UK government will currently pay £2,100 per annum for the electricity you generate - slightly more if you are selling to the national grid. Once you have paid off the installation cost in eight years, this £2k income is guaranteed by the government for 25 years and will also be inflation protected. Thus you stand to make a profit of £35,700 at today’s prices, for an investment of, say, £20k.
That is a 78.5 per cent return on your investment, but it is spread over 25 years, so it is only 3.1 per cent per annum or 2.3 per cent at a compounded interest rate. At current interest rates on savings, that doesn’t look too bad, although no one can predict how rates will rise while you are locked into recovering your money at 2.3 per cent per annum profit. There is also the rise in electricity prices to consider, although this is hard to predict.
The government announced on 31 October 2011 that the feed-in tariffs for installations up to 4kWp will be reduced to 21p per kWh generated from 12 December 2011, about half of what they were previously. This means that you will not get any return on your investment for 16 years, and the annualised compound rate of return over the life of the system will be so low that you will be better off leaving the money in a savings account for 25 years. If you were going to borrow the money to fund the installation, then you’ll most likely end up making a significant loss.
What a terrible shame. The government, in looking solely at its own problem - one of such large take-up of solar power that it will blow its budget for paying the tariffs - has taken a simplistic approach, with no concern for the effect that it will have on future take-up. People will stop buying the systems, so manufacturing costs will stop coming down and the installation companies will close down, decelerating the potential reduction in demand for centrally generated power.
Clive Reader CEng MIET
Higher Denham, Bucks
Patents protect true invention
As a UK-based patent attorney I read with interest your November ‘Ideas Issue’. The profile of Nathan Myhrvold of Intellectual Ventures
(http://bit.ly/ET-Myhrvold) included several references to the patents system and a welcome reminder that patents can serve not simply to block competitors but to generate licensing income.
In the accompanying text there was however a reference to “an unfair system” - presumably an oblique reference to the controversy surrounding the America Invents Act, which revises US patent law and has now come into effect. A lot of what the act does is aimed at harmonising the US law with the rest of the world, and for that reason, and contrary to the impression given, has in fact been generally welcomed by all patent users.
More worryingly, your UK readership may have been left with the impression that that our own patent system is somehow unfair and unfit for purpose. This is dangerously misleading and ignores the great efforts made over recent years to improve the situation for SMEs. For example, the UK Intellectual Property Office has streamlined the patenting process in several ways, provides low-cost patent searches and access to infringement advice. Its fees are a fraction of those charged by the US and European Patent Offices. Furthermore, the Patents County Court now provides a cost-capped and credible forum for IP disputes. The Chartered Institute of Patent Attorneys provides free patent clinics around the country and most member firms provide free initial consultations.
UK plc is not well served by denigrating the patent system, which is the rock upon which Messrs Dyson (cyclonic vacuum cleaners), Bayliss (clockwork radios) and the late Ron Hickman (Black & Decker Workmate) built their businesses. It may be fashionable to talk of support for ‘open source’ and profess outrage at abusive patent trolls and (of course) lawyers in general, but it remains true that if you have made a real invention and want to take on the big boys the way to do it is with a patent.
Fraser Brown MIET
Partner, FJ Cleveland LLP
Paying to go green
Say I have a lot of customers who drink ordinary blended whisky typically costing £12 per bottle. I walk into a shop and there are lots of bottles all exactly the same but have different prices on them and I am told that I have to buy all the expensive bottles first before I can complete my order with the £12 bottles. The bottles cost £30, £42, £49, £60, £103, and £171. Who in their right mind would buy a £12 bottle of whisky for £171?
Well, you are. The Department of Energy and Climate change is forcing electricity companies to buy all the green energy at these prices and absorb them in our electricity bills.
Typically the pool price of electricity is 3.1p/kWh, so if I equate that to the £12 bottle of whisky then large onshore wind turbines electricity costs £30. Biomass plants produce electricity at £42. Offshore wind produces electricity at £49. Small hydro up to 1MW produces electricity at £60. Farmers who put up small clusters of three wind turbines below 100kW get paid £103 and householders who install PV panels on their roof produce electricity for £171.
Of course, if the expensive bottles are only a very small percentage of bottles bought then I can absorb the ridiculous prices I am forced to pay. According to a report in October’s E&T, in 2010 wind turbines only produced 0.4 per cent of the electricity. This only illustrates how the present wind-turbine building programme is going to crank up the cost of electricity and maybe why our prices are having to surge to pay all this extra money needed.
Mike Travers FIET
Waste of space
As an environmentally considerate engineer I must support Robin Hanbury-Tenison’s position in your November For & Against debate (http://bit.ly/ET-SpaceDebate) that furthering scientific exploration of space, at this time, is a waste of resource. I passionately believe that as engineers and scientists we should primarily maintain and stabilise what we have on our planet.
To pour valuable resource into new ventures before securing our foundations is folly. It is this foundation, this Earth, that will provide for our future and subsequently allow for exploration of space to be greater concentrated, directed and controlled, therefore providing richer results whilst having a comfortable and secure environment in which to plan the best use of these results and findings.
C Swainson CEng MIET
Automated taxis didn’t take off
Your news story ‘Personal pods replace buses at Heathrow’ took me back some 50-60 years to when a concept for a linear town embracing Watford and points north was being considered. This would have had a manufacturing and work section in the centre, with new residential accommodation at the ends. In between there would be landscaped areas.
An automated taxi system was envisaged with stopping points at which passengers could call a taxi and indicate their destination. Soon after, the nearest vehicle would arrive and whisk them off to their intended destination.
I was involved with electronic systems for industrial automation and process control. However, after some exciting investigations it became apparent that we had no control equipment capable of undertaking all the sensing and control features required that could be housed on-board or elsewhere. My own involvement ceased when the project was put on ice.
The linear town did not happen as anticipated. Instead, Milton Keynes was developed.
RJ Richman MIET
Innovation isn’t child’s play
I disagree most strongly with Professor Heinz Wolff’s comment in your November issue
(http://bit.ly/ET-Wolff) that most modern consumer devices such as iPhones are nothing more than “toys”. Today’s technology is nothing more than spectacular! Also, the fact that this technology is not locked up in some lab somewhere but is available to all, and we are using it today, is simply astounding and a true success story of today’s European business model.
I suppose you could say that the ubiquitous computer mouse was a toy when it was first was introduced. Now look at what it has achieved and how widespread it is. These technological ‘toys’ have a habit of becoming part of our everyday life and essential to our economic and social development.
I do however agree with Professor Wolff when he says that the next development needs to be in the social design of society and the promotion of a paradigm shift to a ‘real cultural change’.
We need to employ existing science and technology to educate, applied psychology to motivate, and provide outstanding leadership for citizens to recognise and follow. I feel that we need the hand of leadership to touch the tiller of the country such that we have a safe passage through the current and forthcoming socially and financially troubled times.
Toys, never! More like facilitation engines for cultural change through innovative thought, but only if we know how.
Andrew WS Ainger CEng FIET
How the U.S. protects its engineers
I am currently reading Lord Sugar’s autobiography (a great read with some very interesting stories) and believe his remarks earlier this year about engineers not making good business people may stem in part from his misunderstanding of what an engineer is. Early on in the book, he refers to a friend who left school and became a ‘TV engineer’, i.e. someone who repairs televisions. A little further into the book he implies that someone who solders printed circuit boards is an engineer.
In my native Texas it is against the law to claim to be an engineer or to offer engineering services unless one is a licensed ‘Professional Engineer’. Broadly, this requires a recognised four year college or university degree course in a relevant subject, plus a minimum period of experience, and subsequent successful passing of a general engineering exam, another exam specific to the field of engineering which one has chosen to enter, plus an examination covering ethics. The title of Professional Engineer may then be conferred.
As a result, it is rare to find someone on my side of the Atlantic confusing the person who services the boiler, repairs the photocopying machine or fixes the plumbing with an engineer. If I tell someone here that I am an engineer, they understand that I am a degree-qualified professional, and the reaction is generally very positive. Engineering over here is regarded as a desirable, lucrative and respected career.
Over the years my family has had many mobile phones and with each purchase we get a charger. For some reason these units all had different connections to the phone; surely if all these fittings were made standard then we would only need to replace the phone or the charger and so cut down on cost and waste.
I am a manufacturing/mechanical engineer and so unaware of the technical reason for this, but my instinct still tells me it is wasteful.
T Bradbury CEng MIET