Solar Feed In Tariff Website

The allure of solar energy lies in their ability to provide returns regardless of conditions such as a strong economy, low inflation, or a bullish stock market. And indeed, one of the key benefits of solar energy is this ability to profit in virtually any economic environment.

This is an opportunity to invest into a solar photovoltaic park that will deliver a healthy yield over the investment period but more importantly the revenue is secured against government law.

INVESTMENT HIGHLIGHTS

• Invest from £10,000.
• Choice of exit strategies from 5 to 40 years.
• 10% Annual Yields.
• Revenue secured by Government Contract.
• Licenses in place.
• Discounted offer until January 31st 2010.
• Proven technology.
• Full warranty and Insurances.

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La Rioja is a province and autonomous community of northern Spain. Its capital is Logroño. Other cities and towns in the province include Calahorra, Arnedo, Alfaro, Haro, Santo Domingo de la Calzada, and Nájera. The climate is mainly Mediterranean climate. The average temperature ranges from 11.8°C – 31.8°C (53°F – 88°F) and the precipitation ranges between 300 mm – 600 mm as an annual average.

The installations are built and currently connected to the national electricity network under the legislation and fixed Feed In-Tariff of the RD 661/2007. Therefore these projects will benefit from the current high selling price of 0,47 /kwh for a period of 25 years (plus CPI correction). Official studies of solar radiation confirm that Spain has the highest irradiance levels in Europe which is reflected in the high solar energy productivity of the region.

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On Friday rumours emerged that the German government is likely to significantly reduce the price paid for electricity produced by solar panels. Furthermore, the reduction may be made as early as April rather than in July as previously anticipated.

We expect an official announcement this week and will update you then but the rumours alone have already sparked hefty losses in solar energy stocks around the world. This is not surprising considering how large a proportion of the world solar market Germany represents. In 2009, close to 4GW of solar energy capacity were installed. The next biggest markets, Italy, France and the US were a maximum of 1 GW each. If demand drops significantly in Germany, it could lead to more pain for solar equipment manufacturers.

Personally, I believe a significant reduction in Germany’s feed-in-tariff is a good thing for the industry. Things got out of hand in 2009 as installers and manufacturers (particularly inverter manufacturers) struggled to meet demand. Everyone wants the solar industry to grow, but it must be stable growth. Too much too soon and there isn’t enough time for problems to resolved.

For example, in the southern part of Germany, solar energy makes up close to 5% of all energy production now. This is already causing problems for the electricity grid because of the intermittency of solar power. If solar energy were to grow more slowly, these problems could be dealt with as they arise.

The other problem of the feed-in-tariff is that it was making people too rich. Solar farms in Germany are providing 10-15% annual returns virtually risk free. No hedge fund can offer that. Given the risk of a solar investment, the return needs only to compete with long-term savings accounts, so if they provide just a 4% return, that should still be attractive. It is hard to predict what the effect of the drop in feed in tariff will be. Certainly, if the return on investment is lowered, there will be a reduced incentive and less of the ‘urgency’ which gave rise to the boom of last year. However, if there is still a reasonable, positive return on investment, then large numbers of people will still take up the opportunity. If someone handing out 20 pound notes switches to giving out 10 pound notes, would people start walking away?

On the verge of releasing details of the UK feed-in-tariff, what does is the message for UK policy makers observing this 17% cut? Why should they listen to the voices calling for an increase in the tariff whilst all our neighbours are busy cutting theirs? I would ask the government not to waiver in their commitment to growing the UK solar industry. The market in Germany is one thousand times greater than that of the UK (4 gigawatts compared to roughly 4 megawatts last year). The Germans have created an efficient industry with that is able to provide solar installations at competitive prices. The UK industry has not got off the ground yet. We must provide a decent incentive so that people begin to accept the concept of solar energy in the UK.

The experience of Germany shows that subsidies do not have to be provided forever, however the industry must be there before you can scale back.

My message to policy makers is this; we have a lot of catching out up to do, so don’t lose your nerve before we have even started.

With the UK still struggling out of recession and with little good coming of the much heralded Copenhagen climate change summit, brighter news has presented itself in the recent report that the UK has over achieved on its carbon emission reduction targets.

Set by the Conservative government back in 1990, the original reduction target was to be 34% by 2020, however, recent findings suggest that this reduction will now be something nearer 36%, with a number of factors helping to reduce carbon emissions across the UK. The report, carried out by the Committee on Climate Change (CCC) and released in October is already sparking debate as to whether the government is doing enough to fight climate change through carbon reduction policies.

Government action

While the government has announced that it will not go ahead with the construction of any coal power stations employing carbon capture and storage, many believe that not enough is being done to bring about a wholesale change in the way Britain produces its energy.

However, despite surging ahead with non-renewable energy programs, it would be difficult to argue that ministers in Westminster have turned a blind eye to the potential of green energy. Indeed, the Department of Energy and Climate Change (DECC) has already overseen the devlopment of some of the largest off-shore wind farms in Europe.

The Clean Energy Cash Back Scheme (essentially a feed-in tariff) similarly represents a commitment to reduce carbon emissions through legislation. The DECC is already publishing papers on the future landscape of the UK power infrastructure with a grid capable of connecting various micro-generation sites across the country.

The recession factor

With the world financial crisis manifesting itself in the UK in the form of a protracted recession, this has of course had an effect on energy use with the population using less energy and therefore generating less carbon. Critics of the reports findings have highlighted that some of the carbon reduction percentiles can be accounted for by the economy and any imminent up-turn could similarly skew the figures.

In response to such assertions, Ed Milliband, minister for the DECC stated that,

“The recession will not deflect the Government’s efforts to cut emissions and move to a low carbon economy. We must redouble our efforts at home and internationally.”

With the growing global trend towards renewable energy Britain is finally taking the first fundamental steps towards large scale micro-generation of electricity. With the UK government’s announcement that they will be going ahead with the development of a 100 billion pound wind farm in a giant off shore project, the UK is set to continue as Europe’s leading exponent of wind energy.

However, with wind representing a mere 0.5% of Britain’s energy generation, the future for wind and other important renewable energy means will come in the form of households producing their own electricity with small scale micro-generation kits, installed on their property.

These such small scale endeavours, while initially expensive, have been rendered viable through the announcement of the imminent introduction of a feed-in tariff which will offer homeowners ‘cash back’ for surplus renewable energy which is fed back into the national grid. In the UK, this financial incentive will come in the guise of the much anticipated ‘Clean Energy Cash Back’ scheme but elsewhere they have also proved successful at encouraging homeowners to install their own renewable energy kits.

Solar potential for UK households

Despite the gloomy skies and similarly murky outlook for the economy, the UK has the potential to become a competitive player in the world of micro-generation and emulate the leading light of renewable energy, namely Germany. Homeowners who may currently wish to invest in solar panels for their property have the twin hurdles of finance and confusion to overcome before parting with cash.

Fortunately, with regards to solar photovoltaic (PV) technology, investors will have the costs of installation (typically around 6000 pounds) softened through savings on energy costs; amounting to around 250 pounds p/a. Also, with cash back payments on surplus energy from the utility companies a typical household with a solar pv kit could hope to repay the initial outlay while at the same time saving around 1 tonne of carbon emissions p/a.

Similarly, solar thermal can prove costly to install with a typical homeowner having to spend around 4000 pounds on a kit but with the obvious advantages of tariff incentives helping to recoup capital outlay along with savings on energy bills. With the introduction of the Clean Energy Cash Back System in April, homeowners looking to make sound investments in their property will be investigating the potential of solar energy for their homes. The downside of new technology of course is the leap into the great unknown with unscrupulous agents, manufactuers and installers looking to capitalise on consumer naivity.

Fortunately solarfeedintariff.co.uk is seeking to make investing in solar micro-generation simpler by offering a quotation service designed to eradicate the need for time consuming market research by offerig the latest, expert advice on the best option for your home. For more information on the solar quotation service, please visit:

http://solarfeedintariff.co.uk/solar-installation/

As the party season ends, more sober thoughts turn back to the great issues that dominated towards the end of 2009. With the Copenhagen conference highlighting massive short-comings in international efforts to fight climate change, it will be hoped that 2010 will see the UK move ahead in the use of renewable energy and herald greater cooperation between the powers in agreeing .

2009 was a year which saw the announcement of the introduction of the Clean Energy Cash Back system, essentially a feed-in tariff designed to attract investment in the UK solar industry. The announcement by the Department of Energy and Climate Change (DECC) was welcomed by those who have seen how successful similar tariff regimes have proved in other countries where they have been introduced.

However, following the consultancy process which followed the announcement, there have been a number of observers who have noted that the tariff rate will need to be sufficient in order the UK to compete with more mature markets in Germany, Spain, China and the US. While this month will see some clarification of the specific rates to be set for the UK tariff, it will be absolutely essential that the numbers are sufficient to boost investment in the new industry.

Critics of government policy have been headed by the flagship group ‘We Support Solar’ claiming that many within the government are acting against the general interests of solar energy, something which they believe will be reflected in a watery feed-in tariff.

However, not all predictions for the UK solar industry in 2010 are so pessimistic. David Kidney, Under Secretary of the DECC stated that any criticism of UK solar policy is nonsense and that the UK are set fair to strive to compete with the big international players this year. Speaking at a low carbon conference last month, Kidney fielded questions from an audience which pulled no punches, claiming that the UK was a leading light in the use and development of renewable energy.

Speaking mostly of the UK’s big offshore wind projects, matters also turned to solar where Kidney was adamant that the UK solar energy is looking healthy. Talking with regards to the introduction of the feed-in tariff system in April, he claimed that,

“April FiTs [feed-in tariffs] arrive in the UK and the solar industry is gearing itself up for what it thinks will be a major increase in demand for its products.”

Everybody within the industry will be hoping that the government under secretary’s optimism is well founded. As we approach the tariff date we will be able to greater gauge the level of investor interest in solar PV products. Certainly, with solar markets still going strong in Germany with investors looking to diversify portfolios with green stocks, the UK industry will be hoping to attract similar capital.

With Ernst & Young offering their annual solar attractiveness indices at the end of 2009, it again highlighted the clear correlation between strong feed-in tariffs and attractive markets for investors. Until the UK can produce a robust tariff (hopefully this will happen in the first quarter of this year), investors will be put off solar investment by the traditional worries that returns to not justify investment.

However, with the government under massive media pressure to fight climate change, 2010 may just be the year which is looked back on as the watershed in solar installation. With growing public awareness of solar combined with viable solar investment products, the UK could be set to become a world player…we hope.

This week the economist published an article criticising the German feed-in-tariff. The article wasn’t totally atrocious and it highlighted some of the current issues facing the German solar market. However it did leave out some key points that would have changed the articles’s conclusion. Being a fan of both the Economist and the feed-in-tariff I had to respond.

In addition, although I didn’t mention it in my response as I hate nit-picking, the author made a factual error by implying that the solar panel’s made by First Solar incorporate silicon. Since the key differentiator of the world’s largest solar manufacturer is that they don’t use silicon, this error raises doubts about the author’s level of expertise or research.

You can read the article using this link and my reply is shown below.

http://www.economist.com/businessfinance/displaystory.cfm?story_id=15213817

My response:

Sir,

Whilst your article makes some valid comments, it misses two key points.

Firstly, according to the Bundesnetzagentur (Germany’s grid regulator), large utility-scale photovoltaic installations accounted for fewer than 20% of the solar market in Germany in 2009. The rest of the market is made up from smaller rooftop systems. This is not the case for wind energy (since their performance decreases disproportionately with size). This means photovoltaic installations compete for the retail electricity price rather than the wholesale electricity price. Since retail prices can be four times greater than wholesale ones, solar energy has an easier cost target than wind energy.

The second point is that the cost of energy from photovoltaic systems is predicted to decrease at a faster rate than the energy from wind turbines. The basic components that make up a wind turbine have been costed-out for far longer than those making up a solar installation. According to the European Photovoltaic Industry Association, economies of scale and technological innovation will bring solar energy to cost competitiveness with regular grid prices by the middle of this decade, including in cloudy Germany. This means the end of subsidies is well-within sight.

It is clear that the German solar market became overheated in 2009, and in fact many within the industry have themselves called for the feed-in-tariff to be reduced faster than originally planned. However considering the above factors, alongside the fact that many of the world’s leading solar companies are German as a result of subsidy, Germany’s pioneering feed-in-tariff should be considered a resounding success.

If I had a pound for every time I’d heard that comment I’d be a rich man. That’s not to say it’s a dumb question though, it’s a perfectly reasonable question – it’s clearly sunnier in the south of Spain than in Blackpool. The question is by how much and does it matter?

At any given moment its not easy to predict how it’s going to be, but over the course of the year, the overall sunniness level can be accurately measured and predicted. This value is called the irradiation and can be defined as the amount of energy hitting a 1 square metre area pointed towards the sun over a whole year. In the south of England, according to the European Commission’s Joint Research Center, we get 1100 – 1200 kWh of irradiation per year (a kilowatt hour, kWh, is a typical unit of energy). In Devon and Cornwall you get between 1200-1300 kWh per year and in the North of England and Scotland its 1000-1000 kWh. In contrast, Barcelona gets 1700-1800 kWh of irradiation per year and in the very south of Spain and Italy it can get up to over 2000 kWh per year. So comparing London to Barcelona that’s 50% more irradiation for the Catalonians, which is significant but doesn’t mean we should give up hope for solar energy in the UK.

There are some other factors to consider here; irradiation doesn’t correspond exactly to the amount of solar energy you get out of a PV system. The best solar panels on the market today are only around 18% efficient under good conditions. At high temperatures for example, solar panels become less efficient. If the temperature of the solar panels increases by 20oC, they will only produce around 90% of the energy they would at room temperature. This means that on a clear but cold day in London, solar panels could produce more energy than a hot and sunny day in Spain.

Another factor is the difference between clear days and cloudy days. In the UK we get a lot of cloudy weather which blocks the sun and leads to ‘diffuse’ sunlight (meaning from all directions) rather than ‘direct’ sunlight. The four sunniest months of the year in the UK (May-August) deliver 5 times as much solar energy as the four winter months of the year (Nov-Feb). Solar panels can still turn diffuse light into electricity though, and there is evidence to suggest that some types of solar panels are better at collecting it that others. This means we may be able to improve the difference between London and Barcelona by using different technologies.

Despite these factors though, solar panels in Spain will of course still produce more energy than solar panels in the UK, which makes energy from solar cheaper in Spain than over here. But in some ways what happens in Spain is irrelevant, the question that really matters is whether solar energy makes sense or not in the UK.

I would say it does. With the feed-in-tariff, installing solar panels in the UK instantly becomes a highly profitable exercise yielding significantly better returns than most savings accounts (discussed in a previous article). Much of Germany, where over half the world’s solar panels were installed in 2009, is on the same latitude as the UK (northern Germany is in-line with Newcastle). So if it works over there, it should work over here.
The second point is that prices of solar energy systems are falling and electricity prices are due to rise, leading to so called ‘grid parity’ – the point at which solar electricity costs the same as regular electricity and can flourish without government support.

Because Spain is sunnier, grid parity is expected to happen there sooner than here (some claim it may have already happened in certain cases). Several predictions indicate however (in particular those from the EPIA – European Photovoltaic Industry Association), that we can expect grid parity in the UK as early as 2013 or 2014. In just a few years solar energy will be competing on real terms with retail electricity prices, hardly a waste of time in my opinion.

So the next time someone greets you with incredulity at the prospect of using solar panels in the UK, you at least have some numbers to back yourself up…

You heard it here first. Sources recently disclosed to me that we can expect an announcement from the UK government concerning the feed-in-tariff in mid-to-late January.

You may well be aware that while the government has committed to launching a feed-in-tariff program to support renewable energy, it has not confirmed the value of the proposed tariff yet. Numbers have been suggested, but we do not know the exact price per kWh of energy that will be paid to producers and this is causing significant problems for the UK PV industry when advising customers.

The long-awaited announcement will be closely scrutinized to see whether the UK government is serious about meeting its renewable energy targets. Given that the UK is the last major European economy to introduce a feed-in-tariff program (by a considerable margin) the industry will be hoping that the price set will be strong enough to allow the UK to gain some of the lost ground.