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Re: Re: Re: Re: Number Help, Please

Ooops. Editing error in previous post.
Third sentance of second paragraph should read :-

If, for arguments sake, your annual electricity bill is £1,000 and the Government gives you a micro-generator supplying 20% of your electricity including free installation and free maintenance then obviously you save 20% of your electricity bill and the annual return is 20% in terms of electricity or £200 in money.



Re: Re: Re: Re: Re: Number Help, Please

Of course, the whole thing is founded on a fallacy; that the government money is not your money.
The more money government dishes out in subsidies then the greater your tax bill.
These calculations ought to include a correction factor for the tax investment.
If just one citizen akes the subsidy the citizen can safely ignore the tax correction but if every one takes it up then the tax correction needs to be more than 100% of the subsidy (because government is essentially inefficient, the cost of collecting the tax must be included).
I wonder what £2500 subsidy really represents in terms of tax collected? Is it £2501 or £3000? More?

Re: Re: Re: Re: Re: Re: Number Help, Please

Including the tax implications of the subsidy would be correct from an overall national accounting perspective but significantly complicates the calculations in a manner that obscures the central intention of the reply which was to illustrate how the amount of subsidy defines the rate of return on an uneconomic investment seen by the person supposedly making the investment.
Try to include tax and it becomes, to me at least, impossible to sort out a sensible set of conditions for an illustrative answer. For starters any figures are highly dependent on the percentage of taxpayers making the investment and getting the subsidy. Then you start worrying about things like tax rates and what is the true tax rate relative to that slice of disposable income bottom rate or top or even double taxed as from taxed income generated by savings made form previously taxed income.

In practice the tax side of things is irrelevant as its all gesture politics. The Government has decided to waste, sorry I meant spend, a fixed amount of money to make it look good to the environmental religion fanatics and self serving bandwagon climbers. Hopefully the amount has been well chosen to not seriously upset things although with Gordon in charge and the usual New Labour "here's a foot, shoot it quick, Ouch" management style such hopes may be somewhat forlorn.

Re: Re: Re: Number Help, Please


Sloppy writing or sub-editing I suspect.

I think the comment should read something like

""in terms of the overall cost reduction based on grid supplied electricity saved."

Or something like that.

To extend the consideration of indirect (or maybe semi-indirect) costs a little further I also wonder about things like Insurance costs. Would a householder be covered by a standard household policy if his/her turbine broke a blade (or blades more likely once imbalance occurred) and killed a passerby?

Public liability insurance for equipment of a similar value (for theft and damage) and £2 million of third party damage claims costs over £500 p.a. . The current scales seem to suggest that the minimum cover should really be about £5 million. So presumably a higher premium.

Factor that into the calculations and even the most optimistic of figures would be clearly uneconomic no matter how one viewed it.