Monthly archives: August 2010

An article published in the Financial Times last week has vividly highlighted just what effect the recently introduced feed-in tariff has had on the UK solar industry. The news that record numbers of people have decided to install solar panels is largely due to the feed-in tariff legislation which offers installers a healthy return on investment, off-setting the costs of buying and fitting the kit.

The figures published in the FT last Tuesday taken from Ofgem state that this month alone, more than 2,200 homes have fitted solar panels compared to 1,700 last month and 1,400 in June. Indeed, with figures that more than 6,600 households have installed solar panels since the introduction of the tariff system it is good evidence that this incentive scheme could herald the beginning of a boom in the UK solar industry.

Unsurprisingly, The Financial Times paid particular emphasis to the obvious financial rewards associated with solar installation rather than environmental benefits. With the case example of John Keown, a company director who invested in solar through a scheme offered by British Gas, a good case was made for the long term viability of solar PV projects.

Keown will be set to reap the benefits of solar energy installation with expected returns of £1000 per year through savings on electricity bills and revenue from the tariff. Keown for example has estimated that since he installed his solar panels in April he has made £289 from the feed-in tariff. He stated,

“I haven’t gone into self-produced energy to be green. I’ve gone into it because I think it’s a good financial saving, perhaps even better than having an Isa account.”

Certainly, it seems to be growing in the public consciousness that the installation of solar panels to households is more than just a green fad or something which can bring about negligible carbon footprint reductions. The high rates of return which can be achieved through solar panels is likely to attract investors exponentially in the future as word catches on that sourcing and installing a solar system doesn’t have to be painful process.

In recent weeks I have seen several proposals for ‘buying groups’ for residential solar energy installations in the UK. The principle is that rather than individuals from the same area each seeking an installer for their solar panels, a buying group involves a number of home-owners clubbing together and seeking a single installer to do all the installations in one go.

There are several benefits to this. The main reason is that it leverages economies of scale, meaning that you should be able to get an overall lower price because the installer is able to source equipment in larger quantities and utilise their staff better by working in a concentrated area. The second big benefit is in administration time. Choosing an installer for your solar installation is time-consuming. You need to get quotes from several firms, who should each give a site-visit before giving their final price. In a buying group, this process is minimised because you have one tender process for the whole group.

A nice thing about buying groups is the community organisation aspect. Installing solar panels is now very profitable, both financially and environmentally so working as a local group is a great way to bring the community together to do something real that makes a difference. So how do you go about setting up a buying group? The best way is to find a group of people that already have some sort of local connection. This could be something like a residents association, a sports club, a church group or even pub regulars. The important thing is to ensure that the process is clearly explained to potential participants. It is also possible to advertise locally, but make sure you are open about whether you plan to make money from doing the organising or not.

Once a reasonable number of people have expressed an interest (I would say 5 or more counts as reasonable but this is not fixed), the group organisers can start to contact installation firms. Make sure to get full quotes and make these available to all participants to make the process as open as possible. It may even be worthwhile inviting the installer to a group meeting in order to give their ‘pitch’ so that everyone can compare the offers.

Something to be aware of is that there are a growing number of people already organising local buying groups.  Some of these groups are people doing it out of their own time because of their passion for the community and renewable energy. Other groups however, are trying to make significant amounts of money from being a middle man.

I have seen more than one proposal from buying groups looking to take ten percent of the cost of an installation as commission. This strikes me as a bit unfair since the idea of the buying group is to lower costs for the members.

Organizing a buying group takes a considerable amount of time, and so taking some money is acceptable. Personally, what I don’t like is people pretending to be doing the community a service but actually using it as an easy way to make some quick cash. Ten percent is also a bit steep. The idea of the buying group is to lower costs for everyone, this clearly doesn’t work if all the saved costs are going straight to the organisers of the buying group.

So genuine buying groups are a great idea, just beware the profiteers. If someone approaches you as a buying group be sure to find out how much money they stand to make.

Solar PV installation, Harpenden, Herts. 2.22kWp system

Having been interested in domestic energy generation for several years, we’ve been watching developments in the various technologies over this time. The wind technologies for the domestic market never lived up to expectations. Our hot water is obtained through a gas combi boiler so solar hot water wouldn’t be financially viable. As for PV, the recent government FiT scheme suddenly made it very attractive. So we started looking into it. We did our research on systems, manufacturers, technologies, searched websites for indicative prices and contacted several installation companies for a chat.

At this point I must warn prospective PV clients about the selling techniques some companies employ. As knowledge grows about domestic PV and the government’s incentives, companies are springing up at a very swift rate to jump on the band wagon. There’s companies sending out reps with little or no knowledge of the technicals, and operating the ‘double glazing’ sales/marketing techniques whereby the price drops 40% over the course of their visit! If you come across one of these techniques, DON’T sign up!! The reputable companies will provide an indicative quote by phone or email and if you’re interested in taking it further, they’ll send out a technical bod for a site visit. The site visit will confirm your property’s orientation, the roof construction, the cable routing, the siting of the electronic boxes, and confirm (or modify) the indicative figures of generation (units and cost benefits) that you’ll have received in your provisional quote. It’s worth bearing in mind that any indicative figures given to you should have been based on the government’s SAP figures, which are generally conservative.

The company we chose was Spirit Solar, based in Reading. They were professional, thorough, knowledgeable and above all fun to deal with. They shared the ‘buzz’ and excitement of ‘green’ energy, which made the whole experience even more pleasurable. The installation went without a hitch and we were generating juice by 4pm on the second day. We do, however, live in a bungalow which made the install relatively easy. There was no need for extra scaffolding and we had given thought ourselves to the cable routing to make things easier.

We’re now one week on from commissioning and all the facts and figures we worked out (and those we were quoted in quotes etc) appear to be on target as expected. And we can’t stop watching the Sunny Beam wireless generation meter!

We have 12 x 185kWp Yingli poly panels with a SMA Sunny Boy 2500 inverter, providing a 2.22kWp system. We face due south-west with no shading. The expected annual output is around 1,750kW – about half of our annual electricity usage. System cost was £10,500.

We anticipate an annual return of around £900 – a combination of Feed-in, export units and the saving on our electricity bill. Guaranteed for the next 25 years, and tax-free!

Steve Bryant. Aug 2010.

A survey carried out by the Solar Trade Association (STA) has reported a massive drop in sales in solar panels in the last few months. The STA, a body which represents photovoltaic installers, manufacturers and suppliers has stated that since the arrival in office of David Cameron’s Conservative government business has dropped off considerably.

Paying particular attention to solar thermal installers, the STA findings have shown that since early May around 50per cent of these installers have reported a 75 per cent reduction in new business, figures which are likely to have resonance across the renewable energy sectors.

Spending cutbacks have been the prominent feature of the new coalition government and these spending cuts have certainly been felt in the solar energy industry according to the STA’s findings. Concepts such as the ‘Green New Deal’ are also being harmed with a sharp fall in green jobs across the country. Indeed, the STA report found that 65 per cent of its members were considering leaving the industry temporarily during these hard times with 7 per cent considering leaving permanently.

Chairman of the STA, Howard Johns said,

“We have a new Government which claims to be the greenest Government ever, yet in its first days it has caused severe setbacks in what is otherwise a buoyant sector. Removing grant support for solar thermal and giving no clarity on new incentives has severely hit a sector that will provide many green jobs and lots of renewable energy with the right support behind it.”

The withdrawal of certain schemes for solar thermal such as Renewable Heat Incentives and the Low Carbon Building program grants have been in stark contrast to solar PV where feed-in tariffs have seen investment and installation go from strength to strength. First introduced under the guise of the Clean Energy Cash back scheme, it highlights exactly how crucial government incentive schemes are in kick starting renewable energy take up in the UK.