Still worthwhile?

[FB.]

And put things into perspective:

What proportion of people's money goes on:

Gas & electricity
Telecommunications
Food
Clothing
Council tax
Petrol
smokes
Booze

?

So much anger directed at gas/electric companies, when people spend more on food, or spend as much on petrol, or as much on communications/telecoms, or as much on smokes, booze or holidays.

The amount of anger directed at one minority portion of monthly outgoings is disproportional to its significance. While everyone continues to have all eyes on just one obsession, they will continue to be robbed by all the other industries which provide "essential" services.

 

[Vegelen]

There appears to be a price fixing cartel operating here and customers are being ripped off.
There is no competition or we would see energy companies trying to reduce costs and prices in order to capture more customers.
Instead of this we see across the board price hikes far greater than inflation and convoluted, confusing price plans.
That's not OK with me when this is an essential utility.
There is clearly no proper regulation on the side of the consumer.

Well said.

If anyone attempts to say energy companies make money and are profitable, the old chestnuts are brought out.

"Low Profit margins of 5%, little return on shareholder capital, high risk, yada, yada, yada".

The energy business generates lots of money, problem is too many benefactors (shareholders) exist drawing off these returns".

If the energy business didn't make money national governments wouldn't show such an avid interest in it.

Lots of money is wasted in this business IMHO.

Centrica generates vast profits generating electricity from gas.

 

[Vegelen]

Why would I (or anyone else) want to invest in low-margin businesses such as utilities, at the top of consumer's hit-lists, when many other companies - especailly smokes and booze - absolutely rake it in and rob people blind without them realising it?

So why do you then?

Operate in the free market, sell your over priced shares, stop defending energy

companies and go invest in all these better alternative economic investments.

You sound more emotional about Utility companies than a standard investor.

You have made a water tight argument, why it is not sensible to invest in energy

companies for the foreseeable future.

 

[Vegelen]

Yes, because there has been too much emphasis on consumers and not enough on encouraging businesses to invest and create jobs.
The economy will not get out of its slump unless businesses can be encouraged to invest, and they will not invest unless the profit margins are satisfactory.

If 0.5% Bank Of England base rate isn't the correct environment for businesses to borrow

and invest money, i'll go shoot myself.

I'd agree that the government could do more to help encourage businesses to invest in the

UK, but to say there has been too much emphasis on consumers in the UK is absolute

rubbish.

 

[FB.]

So why do you then?

Operate in the free market, sell your over priced shares, stop defending energy companies and go invest in all these

better alternative economic investments.

You sound more attatched to the Utility companies than you claim.

You have made a water tight argument, why it is not sensible to invest in energy

companies for the foreseeable future.

I sypathise with utility companies and what I see as over-harsh regulation. I do own some shares in them but they are among my smaller holdings. Remember that I have to pay bills too, but I have a greater sense of economic balance and a fair profit for all businesses. But strip the utilities of all their profits and you'll only see bills drop by 6% - and you'll then see even less investment than there is now. Would a 6% drop in gas/electric bills - several quid a month - save the UK's poor?

Well-known companies among my largest holdings are Vodafone (21% margin) and AstraZeneca (37% margin), although I hold certain shares for reasons other than purely the profit margin. For example a big holding in Sainsbury (bought below £3 in late-2011 and early-2012) because the shares have been so cheap that they trade for less than the value of the buildings, so are begging to be snapped-up by a predator wanting to break the company up and flog-off the bits - of which the Qatari Delta-Two fund (who already have acquired one-quarter of Sainsbury's shares) is rumoured to be in talks to buy the Sainsbury family's holdings in preparation for a £5-a-share buyout (current price around £3.50).

 

[FB.]

If 0.5% Bank Of England base rate isn't the correct environment for businesses to borrow

and invest money, i'll go shoot myself.

I'd agree that the government could do more to help encourage businesses to invest in the

UK, but to say there has been too much emphasis on consumers in the UK is absolute

rubbish.

Why invest when there is such regulatory and political risk? Or the risk of consumers demanding unrealistically low prices?
Like I said: prices can't go more than several percent lower - a fiver a month on an average bill.

If you want to spend your life arguing over a maximum saving of a fiver a month through "not-for-profit" gas/electric, then fine. But I'd spend my time wondering about other, easier ways to make ends meet.
One less packet of smokes a month, or two less beers, or one less shot at the lottery each week.

 

[Vegelen]

I accept some of the points made.
What irks me is that consumers keep paying, more and more and more in a virtuos circle, on a commodity that isn't particularly special, which no one supposedly profits from?
It reminds me of "See no evil, hear no evil".
Prices rise, everyone pays more and we are led to believe no one benefits.....

 

[FB.]

Prices rise, everyone pays more and we are led to believe no one benefits.....

Known as Quantitative Easing nowadays; it used to be called "Devaluation".

The more money that enters the system, the less the remaining money is worth. Gold and property have value because they are in relatively fixed supply. Money can just be created digitally, or a bit of ink slapped on a piece of paper; Voila! £20 from a bit of paper and ink!
Unlike old money which was gold, or gold-backed.

The "price" of things does not rise; it is the value of money which declines, due to governments being unable to raise more tax, and unable to cut benefits. So they print the shortfall and instead of taking our money, our money buys less (which is the same effect in a stealthy way).

 

[Vegelen]

But I'd spend my time wondering about other, easier ways to make ends meet.
One less packet of smokes a month, or two less beers, or one less shot at the lottery each week.

Lots of people in society are poor and don't waste money on smokes, booze and gambling.

Where do they run to, when they have to make choices between heating their homes and feeding their families?

 

[dchester]

Lots of people in society are poor and don't waste money on smokes, booze and gambling.

Where do they run to, when they have to make choices between heating their homes and feeding their families?

People who have never struggled with this real life scenario will never understand that point, sadly.

Unfortunately those kind of people have been running the country for a generation now. Career politicians. Without an understanding of how real people struggle to pay the bills each month there is not much hope for this country under ANY political party.

I am fortunate, or perhaps unfortunate, to have seen both sides of the coin during my life so I can see both points of view.

 

[Somecamel]

Lots of people in society are poor and don't waste money on smokes, booze and gambling.

Where do they run to, when they have to make choices between heating their homes and feeding their families?

I don't waste money on smokes and Booze. I need smokes and booze!! I can always wear a Jumper if I'm cold

 

[dchester]

Why invest when there is such regulatory and political risk? Or the risk of consumers demanding unrealistically low prices?
Like I said: prices can't go more than several percent lower - a fiver a month on an average bill.

If you want to spend your life arguing over a maximum saving of a fiver a month through "not-for-profit" gas/electric, then fine. But I'd spend my time wondering about other, easier ways to make ends meet.
One less packet of smokes a month, or two less beers, or one less shot at the lottery each week.

It's not just a few percent though is it. The latest rise alone for me from the wonderful NPower was 22% on my gas! And that is just this year! You ignore all the previous years' inflation busting price hikes. Take electricity, where I was just a few years ago paying 4p per kWh and my renewal price this year was around 10.5p - That's an increase of 162% on what I was paying about 6 years ago! And I cannot be alone in this.

 

[FB.]

Lots of people in society are poor and don't waste money on smokes, booze and gambling.

Where do they run to, when they have to make choices between heating their homes and feeding their families?

I grew up in a council house, on the worst estate in my town. I went to the worst schools until my teachers and a high school saw potential in me and took me on.
Many of my primary school friends are either dead, in prison, or junkies - mostly associated with crime.

When I was very young my mother was involved in an accident which left her disabled and unable to work. She underwent several operations and considerable time in hospital to try to improve her quality of life.
Only my father was able to work - and he had to care for us on his own at times (when my mother was too ill). He had left school during the Depression, as barely a teenager. His education was minimal. He mostly worked as a lorry driver (sand/gravel) or heavy machinery operator in the associated quarries and landfills.

Not much stoped his fighting spirit, determination and resourcefulness from giving us a decent quality of life - even when there were soaring prices and three-day-weeks in the 1970's.

So believe me: I'm not one of those who has always had it easy. I am well aware of how the real world works and how both sides live.

Too many people today expect something for nothing. It's a side effect of the benefits culture. A lot of the girls I went to school with had one aim in life: to get pregnant as soon as possible (age 15-16) in order to be given a council house and lots of benefits; never needing to do a day's work in their life. Then they carried on breeding like rats at the expense of tax-payers or tax-paying businesses - while those who do an honest hard day's work have to think about the consequences of having additional children.

 

[dchester]

Yes, because there has been too much emphasis on consumers and not enough on encouraging businesses to invest and create jobs.

There is very little emphasis on consumers. It's all about shareholders. I already said that. These companies don't want to invest in new cheaper energy sources. They want to milk their cash cow for all they can.

The economy will not get out of its slump unless businesses can be encouraged to invest, and they will not invest unless the profit margins are satisfactory.

The profit margin does not need to be high when sales volumes are so enormous. Many computer distributors work on margins of 1% or so for some items.

How many construction workers would be given jobs, if the utility companies suddenly were able to find profitable investment options for new power stations? How much extra would that inject into the ailing UK construction industry - and filter down as wages to ordinary people? Or should we continue to lack investment and buy all our power from the Continent, with money flowing overseas instead of the UK?

It does that anyway because foreign companies have been allowed to buy our utility companies.

I presume, then, that you'd like everything to be owned by the state - including your business. After all: almost everything is "essential" and therefore why should one industry or sector be any different to other industries or sectors (especially if margins are already very low)?

I don't know why you presume that. You seem to think I'm some kind of socialist, whereas I'm actually at the other end of the scale! Without competition prices would be artificially high but there is no real competition between these companies currently. And there we go again about low margins. 7% is not a low margin, especially with such a huge turnover. It's a very healthy margin.

As things stand, you can see where investors and businesses will put their money - smokes, booze and anything with a government subsidy. Not many will be interested in low-margin utilities and investment in utility infrastructure may be starved as a result.

If it were a normal business they would invest in new ways to produce cheap energy which they could then sell for a lower price, undercutting the competition and thus increasing their customer base, turnover and profit. This does not happen because they don't have to do it. Instead they can carry on fixing the prices at higher and higher levels knowing that we HAVE to pay it.

There is far too LITTLE regulation of this industry and in fact what regulation there is seems always to be in their favour and not the hard pressed consumers. These people are always crying about government subsidies. Why should they have any at all? They BOUGHT the water company or whatever utility it is and in doing so they should take on board what needs to be done. Fix the leaks. Improve distribution and create a better, cheaper source for their product. Then the customers will come. Then the profits will flow in. Then the shareholders AND the consumers will be happy.

Of course this will never happen without someone weilding a Big Stick because of one thing: Greed.

 

[sedgy34]

@ dchester I'm just catching up on this thread just read your last post 32and then read your first post you have the answer.
also FB is a consumer not a installer and contributes a lot to the forum if every consumer were like FB the country would all have Pv and the leeches you mention would have no other alternativve than to drop there energy prices

 

[dchester]

I grew up in a council house, on the worst estate in my town. I went to the worst schools until my teachers and a high school saw potential in me and took me on.
Many of my primary school friends are either dead, in prison, or junkies - mostly associated with crime.

When I was very young my mother was involved in an accident which left her disabled and unable to work. She underwent several operations and considerable time in hospital to try to improve her quality of life.
Only my father was able to work - and he had to care for us on his own at times (when my mother was too ill). He had left school during the Depression, as barely a teenager. His education was minimal. He mostly worked as a lorry driver (sand/gravel) or heavy machinery operator in the associated quarries and landfills.

Not much stoped his fighting spirit, determination and resourcefulness from giving us a decent quality of life - even when there were soaring prices and three-day-weeks in the 1970's.

So believe me: I'm not one of those who has always had it easy. I am well aware of how the real world works and how both sides live.

Too many people today expect something for nothing. It's a side effect of the benefits culture. A lot of the girls I went to school with had one aim in life: to get pregnant as soon as possible (age 15-16) in order to be given a council house and lots of benefits; never needing to do a day's work in their life. Then they carried on breeding like rats at the expense of tax-payers or tax-paying businesses - while those who do an honest hard day's work have to think about the consequences of having additional children.

OK so we seem to share the same basic ideals, however you appear to have completely lost touch with your roots because now you just don't seem to "get it". You talk only of your investment portfolio and forget about the real people out there who are struggling. I don't mean the spongers and theives. I mean normal middle class people who can't get a loan from the bank to expand or diversify their business. Can't make enough sales to pay the bills because their clients just don't have or are not prepared to risk spending their hard-earned cash on whatever it is that the chap is trying to sell them.

 

[dchester]

@ dchester I'm just catching up on this thread just read your last post 32and then read your first post you have the answer.
also FB is a consumer not a installer and contributes a lot to the forum if every consumer were like FB the country would all have Pv and the leeches you mention would have no other alternativve than to drop there energy prices

Death to the leeches!

D.

 

[sedgy34]

Death to the leeches!

D.

Im sure someone on here can price you a 4 kw Pv system get on board like us installers who have Pv on our own roofs
post your area

 

[Gavin A]

is it still worthwhile?

Where just rejigging our figures for November, and coming out with up to 16% annual return on investment even using the IRR method, which takes off the cost of the system before working out the return - for our cheapets 3.9kW system for a high daytime energy user (50% consumption on site).

Most reasonably priced 3-4kW systems will be more like 9-15% returns depending on price, orientation, system size, daytime energy consumption etc.

If you've got money in the bank earning sod all interest, and you're paying tax on what little interest you do get then you'll be hard pushed to find better long term returns than that IMO (it's tax income tax free, which makes a huge difference for higher rate tax payers).

 

[sedgy34]

We had a customer cash there ISA in and it paid for the Pv install they are well happy