If you’ve ever carried a solar panel you’ll know that they’re pretty heavy (about 25kg for a 1.5sqm panel), and if you add on the racking that’s required it makes things even heavier. This is a bit of a problem for roofs that can’t support large weights, and for the installers who have to get the stuff up there.

As with many things in life however, technology has a solution on the way. In this case the solution comes in the form of flexible solar panels. This new type of solar panel doesn’t use glass as the supporting material; it uses transparent, flexible plastic sheets. They can be rolled up like carpets and unfurled across a low-sloping roof. This process is much quicker and easier than normal solar panel installation. The solar panels just need to be tacked down at the edges, rather than have heavy metal racking bolted into the frame of the roof. The material is also light enough so that any roof can support its weight.

This technology is spreading quickly but has yet to win dominance in the market. This is for several reasons. Firstly – only one company in the world is making flexible solar panels in large volumes. That company is UniSolar, based in Michigan, USA. UniSolar have developed their own proprietary process for depositing thin-film solar cells (see discussion “REF TO previous article”) on flexible plastic sheets.

In order to increase efficiency of the panels, their design in fact uses three solar cells stacked one on top of the other. Each solar cell responds to a different part of the sun’s spectrum so it maximizes the amount of energy converted to electricity. Despite this compmexity, these solar panels are significantly less efficient than traditional, crystalline silicon solar panels. They are made from ‘amorphous’ silicon and are currently around 6-8 percent efficient, compared to 16 percent for crystalline silicon panels. This means you have to cover a larger area of the roof.

A number of companies claim to have more efficient versions of the technology on the way. Companies such as US based Advent Solar, claim to have flexible solar panels that will soon reach over 10 percent efficiency while other companies, such as G24 Innovations in Wales claim to have lower manufacturing costs for this technology.

Given the success of UniSolar with their low efficiency and complex design, any company that can make an improvement is likely to have success with flexible solar panels. Let’s wait and see…

Environmental campaigners Greenpeace has released a ranking of the world’s leaders with regards to their respective commitments to tackling climate change. With the Copenhagen summit around the corner there is a massive media focus on the world’s leading economies to make real commitments to the environmental cause and Greenpeace are making an effort to look beyond the political spin.

Surprisingly Barack Obama is found wanting in the list with Greenpeace not impressed by the actions of the new American President. In the report, Greenpeace state that

“President Obama’s election hasn’t brought the breath of fresh air to climate talks that many had hoped for. Instead, it’s seen as a perpetuation of Bush-era efforts to disrupt and water down attempts to agree to a strong treaty as Obama tries to bring the whole world down to his own level of ambition”.

Certainly, with a rating of 8/100 Greenpeace have made clear that while the world’s most powerfulnation does little to address the issue of climate change, anything that occurs at Copenhagen will be futile.

Other powerful economies fared better with India’s Prime Minister Singh being lauded for his recent efforts to take on polluters. In the ranking table Singh was given a fairly good 53/100. The report stated,

“Singh has recently announced massive solar projects to accompany strong energy efficiency targets.”

However it also went on to criticise his policies regarding deforestation on the Indian sub-continent. The UK prime minister, Gordon Brown also benefited from the support his government ministers, and in particular the DECC has so far given to the solar industry in the UK with his recent announcement of the introduction of the Clean Energy Cash Back System, a feed-in tariff designed to incentivise investment in the solar industry. However, the report commented that Brown,

“Has failed to embrace renewable energy and an inability to quit coal has put the UK Prime Minister at odds with his own advisers on climate change. The EU’s wrangling over finance has left the UK unable to offer more than words to developing nations”.
The Copenhagen summit will highlight key deficiencies in global policy and will once again bring to th fore the debate in the UK regarding the feed-in tariff rate which will certainly need to be increased if Gordon Brown is to be taken seriously as a man with a real commitment to thwart the on set of global warming.

The British government’s commitment to green energy despite the political rhetoric has traditionally been written off as cynical pandering to the green lobby. Certainly, even with the creation of the impressively titled Department of Energy and Climate Change (DECC) under the leadership of Ed Milliband which was sniffed at as a mere spin operation, few took the government’s will to tackle climate change seriously. When the Energy Act was passed through parliament in November 2008 the wheels were set in motion for the introduction of the much hyped ‘feed-in tariff’ or FIT as it is often been abbreviated.

Those within the industry were all well aware that similar tariff mechanisms elsewhere have provoked massive investment in solar sectors which previously hadn’t been on the green energy map. The ‘We Support Solar’ campaign was created as a mouth-piece for industry members and environmentalists alike to voice the message that solar power is the most viable means of generating clean, affordable energy in the future but that this viability hinged on the introduction of a comprehensive and generous tariff rate. This last part was the main concern for campaigners who worried that the government would introduce legislation which would neither attract investment, nor render the industry economically viable. Fortunately, with the DECC’s announcement of the Clean Energy Cash Back legislation (essentially a FIT) it now appears that the UK will have a bright, solar future.

 A feed-in tariff is a mechanism whereby the government sets a law which guarantees a fixed, premium rate paid for electricity generated by renewable means. Traditionally, the benefits of solar electricity have been far outweighed by the cost of solar kits, installation and maintenance, something which has deterred investment and kept solar power as a low level, cottage industry in the UK. What the tariff does is off-set the obvious costs involved in the installation of solar plant by offering investors generous financial incentives for installing solar kit. The traditional energy companies in the UK will be obliged to purchase the solar energy at a price above market rates, the cost of this being spread over the consumers.

Even before the Clean Energy Cash Back announcement, the benefits to potential solar investors in the UK were being expounded. At the end of 2008 consultants, Ernst & Young reported that the UK had moved up to fifth place in a list of countries in an index entitled, Renewable Energy Country Attractiveness. Citing the impending introduction of the feed-in tariff and the relatively low value of Pound Sterling, the Ernst & Young report stated the UK’s rise in the index would continue as investors eventually cottoned-on to legislation changes designed to incentivise investors. It was therefore no surprise that heading the list was Germany whose own tariff legislation has often been held up as the example of how to create interest in unchartered territory for many investors.

Confidence in the future of the solar industry has certainly never been higher within the financial sector. The global financial crisis has highlighted the importance to many the need to diversify their investments and also seek viable alternatives to petro-chemical investment. In March 2009, the fund manager of Swisscanto, Pascal Schuler announced that oil and natural gas in particular would become unviable as investments within the next 20 years. Talking specifically about his green investment fund, Schular asserted that,

“Water, solar and wind energy are areas where we invest in the long-term, as there is an over-average growth potential when financing kicks off again. Banks will prefer them when they start lending.” Going on to add, “We will continue to invest in this segment but focus on companies which have a strong balance sheet and are able to survive this crisis”.

 A brief look at Google will show that there is now a real buzz around similar investments in the UK solar industry. Websites such as solarinvestment.co.uk are highlighting the excitement which currently exists in the young British solar industry, the future of which looks brighter than ever. However, confidence in the solar industry is not limited to those simply within the industry. Consultants and analysts are all putting across the message that solar installations are the most effective ways to offer consistent, high yields in tumultuous times for global financial markets. One such exponent of the solar sector is investment guru, Jim Mellon who has added his weight to the solar revolution. Mellon, has demonstrated his belief in the prospects for a solar energy future by investing in mining company ‘Emerging Metals’ which focuses specifically on metals required for the manufacture of components used in photovoltaic technology. Listed in the Times Rich List with a net worth of £500m, the financier who predicted the financial crash stated,

“Solar is genuinely clean, it ticks all sorts of zeitgeist boxes. Within five years, solar power will be as cheap as oil and gas without the subsidy. It will be bigger than the internet in five years”

Of course, whether the solar industry will be bigger than the internet in the UK over the next half decade is open to debate. What is now becoming clear however is that the UK solar sector will have everything in place come 2010 to help the sector become competitive with industries in Spain, Germany, China, California and a number of other places.

In order to make the UK competitive with other PV behemoths around the world, British Prime Minister Gordon Brown has made it clear that he wants to establish a ‘Green New Deal’ making reference to the economic plan introduced by F.D. Roosevelt during the Depression to revitalise the US economy. In a statement, Brown said that moving the UK from a carbon to a green economy would not only help meet climate change targets, but also provide jobs in new industries which would be starting up. In a report released by Brown in March 2009, the figures stated that moving to a green economy would create up to 400,000 new jobs in the next eight years with an estimated 1.3 million people being involved in the UK solar sector by 2017. Gordon Brown, on a visit to Washington to meet Barack Obama declared,

“We know that the more we are able to co-ordinate these measures internationally, the more confidence and certainty we will build and the more investment we will be able to bring forward. That’s why I want to create a global ‘green new deal’ that will pave the way for a low-carbon recovery and to help us build tomorrow’s green economy today”.

With government backing, the UK is now in a strong position to build a solar sector which will be capable of emulating PV industries in Germany and Spain. In April 2010, the Clean Energy Cash Back (feed-in tariff system) will be introduced and the subsequent months will see a frenzy of activity both in the media and from investors as people attempt to join the industry in its infancy. 2010 will be a make or break year but it is now looking highly likely that as the economy goes out of recession and in to growth, the solar industry will reap the benefits of being both politically fashionable and financially attractive.

A reduction in the price of solar panels means the return on investment for solar energy installations is better than ever in Germany. In response, the construction rate in the second half of this year has skyrocketed. Toby Ferenczi discusses the implications for the world’s largest solar economy.

 What would you say if your financial advisor told you about an investment product that had guaranteed returns of 15%, was extremely safe and was government backed for 25 years? If you happen to live in Germany you may well be being told just this. Under Germany’s Renewable Energy Act (the EEG), anyone with a solar photovoltaic system can sell the energy produced to their local utility at a fixed and elevated price (in English this is often called a feed-in-tariff or clean energy cash back scheme). Germany introduced this scheme in earnest back in 2004, and since then the country has been the world’s largest solar energy market (except in 2008 when Spain introduced their own feed-in-tariff) meaning that over half of the world’s solar panels are installed in Germany. So if solar has been booming in Germany since 2004, what’s so special about what’s happening in 2009? The reason is that this year could well be Germany’s biggest year for solar installations by a factor of two, despite a major recession.

 According to the Münchner Merkur, a local Munich paper, the utility E.On is currently connecting 200 solar installations to the electricity grid in Bavaria every day, a level so high that it is struggling to keep up with demand. One leading industry analyst claims that installations in Germany will reach close to 4GW this year; equivalent to a market size of €16bn and a surface area the size of 4000 football fields. This is particularly staggering given how quiet the industry was at the beginning of the year when no banks were lending and investors were nursing their wounds. Since the end the second quarter however, many people have become aware of the window of opportunity, including everyone from families to major investors. Most installations (80-90% of market) are small rooftop installations, but some of the largest solar parks in the world are also currently under construction in Germany.

 The explanation for the surge comes from simply looking at the return-on investment. Under the EEG, the feed-in-tariff is supposed to decrease for new installations each year by around 10% with the hope that eventually solar energy will survive without subsidy. In the aftermath of the financial crisis, the price of solar panels fell by 30% or more, meaning that the amount of money you can get back from your investment is unprecedented. Many Germans now appear to be taken with the idea of investing in a solar electricity system, something they can see and touch, rather than the ambiguous stock market that hurt them so badly.

 There is of course a dark side to this solar energy bonanza. Whilst the feed-in-tariff was supposed to create an economic incentive for renewable energy, it wasn’t supposed to help rich people get richer. Supporting the scheme costs the German taxpayer a significant amount, so a policy that creates an unbeatable financial product for people with access to roofs or land raises some ethical questions. Several reports of the ruthlessness with which landowners pursue the construction of large power plants have emerged. Millions of euros are at stake in making sure solar parks are finished before the year-end to have access to this year’s feed-in-tariff, and some landowners have been accused of not taking the well being of local communities into account.

 The newly elected German government will certainly be scrutinizing the situation very closely as they are expected to make a decision on the feed-in-tariff reduction in the next few weeks. Anti-feed-in-tariff lobby groups claim that the law is now simply handing money to the swathe of Chinese manufacturing firms that can now produce solar products at lower cost than the German firms.

 The feed-in-tariff will undoubtedly and necessarily take a big cut next year, but this will hopefully lead to more sustainable growth of the solar industry. As the price of solar electricity decreases further, the moment when it competes with conventional energy on its own terms will be brought forward. When consumers are able to make bumper returns from solar without the governments help, that will be an investment product worth fighting for.