Unfortunately it is necessary for me to respond to a recent article by George Monbiot in the Guardian criticising the UK feed in tariff. Since the article misses key points that would have influenced the conclusions made, I take this opportunity address the author’s primary arguments.

The purpose of a feed-in-tariff is to encourage investment and grow the micro-generation industry. Economies of scale and technology improvements then lead to cost-reductions, meaning that the subsidies can be reduced and eventually removed. This is exactly what is happening in Germany and many other European countries. In Germany, whilst there is some debate over how much the feed-in-tariff should be reduced, the solar industry agrees that it should be decreased faster than was originally planned due to the recent dramatic falls in PV system prices. The tariff reductions are a testament to the policy’s success, not its failure, and no-one believes it should not have been introduced in the first place.

Monbiot failed to mention that Germany’s solar industry currently employs over 60,000 people, turns over €10bn a year and generates significant tax revenues. The industry is expected to grow even with significant feed in tariff reductions and southern Germany currently produces close to 5% of its total electricity demand (the amount of solar energy in Germany has grown by almost a factor of 10 since 2006). The cost of the feed in tariff to energy consumers is just a few Euros per year per household.

Many other countries have followed Germany’s success in recent years such that the UK is the last remaining major European economy without a feed-in-tariff. Consequently, the cost of PV in the UK is still extremely high in comparison with our neighbours. Experience from Europe has shown that the downward cost trajectory for PV is very steep once the industry begins to grow, and cost competitiveness with conventional energy prices is predicted to be achieved across much of Europe in the next two years. This is why the UK needs to be aggressive with its feed-in-tariff – so it can catch up and reduce the subsidy sooner.

Monbiot astonishingly unqualifies his comparison of large-scale energy generation with micro-generation. The consumer price of electricity costs upto four times as much as the wholesale price of electricity. Therefore micro-generation, which is produced at the point of consumption, has a much easier cost target than large-scale generation to be economically competitive. Micro-generation is much closer to being economically viable than Monbiot makes to believe.

Furthermore, no-one is saying that micro-generation should replace large-scale wind, it is a valuable addition. Nor is anyone saying we should prioritise micro-generation over energy efficiency measures such as insulation. Obviously its cheaper to save CO2 by improve improving inefficiencies than to install clean energy generation, but if we are to eliminate the majority of our carbon emissions, both efficiency and clean generation are required. Insulation will be fitted wherever possible in UK buildings, why wait until this process has finished before dealing with renewables?

Monbiot also argues that PV only makes sense in southern California. The average insolation (sunniness level) is around 1.9 times higher in Southern California than in the UK. This means that yes, you have more sun in California than here, but not by an order of magnitude. The amount of sunlight that hits buildings in the UK is still 6 times the amount of energy used within those buildings and Germany’s irradiation level is very similar to ours.

I imagine that Monbiot was joking about the possibility of people fraudulently claiming the feed-in-tariff but it is worth noting that such a fraud would not be possible given the checks that are in place and since it has not been seen in any other country with a feed in tariff, why should it be seen in the UK?

In summary, Monbiot does not seem to understand what has been happening in Europe during the last few years. The feed-in-tariff has been shown to be one of the few successful mechanisms for boosting renewable energy generation and fighting climate change. I hope that his misunderstanding does not serve to hold the UK back any further than we already are.

The winter months have brought lots of snowfalls, or as they are known in the world of solar energy, ’shading events.’ You might be forgiven for wondering what exactly happens to the performance of solar panels when they are covered in snow, or anything else for that matter.

Shading is a big issue for solar arrays. A small amount of shading on one solar panel can result in a big power loss for the entire system. This is because of how they are connected together; a solar panel is made of a number of solar cells connected in series. Each solar cell has a current of around 8 Amps and a small voltage of 0.6V or so when under full sunlight. For those who remember their physics classes from school, this means that when they are connected in series the voltages add up but the current stays equal. Solar panels are then connected together in series to make a string, so the current still stays the same (on large arrays multiple strings are connected in parallel).

What this means is that if one solar panel, or even one cell of one solar panel is affected, it will affect all the others. When a cell is shaded its output current decreases, which means the current for all the other cells and modules is also limited. So one small patch of shade can disproportionately reduce the power output of the whole system.
This effect can be limited by a number of means.

The best way is to make sure your solar panels are not going to be shaded in the first place. This should be checked as part of the site survey, conducted by your MCS accredited installer. You should ensure that nothing will shade the modules during the middle of the day, when your system should be producing the most energy. Shading can be checked using a special design tools that show the path of the sun behind various shading objects. This can be either a lens that shows the horizon and path of the sun in front of you, or a full design software package that uses photographs of the surroundings.

With snow it does help to clear it off. But there isn’t usually much sun when its snowing, and if the sun does come out, the snow melts pretty quickly.

If you cannot eliminate shading as is often the case in built up areas, there are several technologies that can limit the effect of it. Many solar panels now include bypass diodes that disconnect groups of solar cells if they are shaded. It is fairly crude but often works well. When you buy solar panels make sure to ask about bypass diodes.

A second technology that is not available yet in Europe but soon will be is distributed conversion. Here, rather than have power electronics (like the inverter) positioned all in one place, you have some electronics placed on each module. This allows each module to operate independently. One company in the US called Enphase claims this technology increases power output by upto 25 percent.

These are all things to bear in mind when buying a photovoltaic system.

Solar thermal heating systems could be something of a common sight on south-facing roofs in the UK with the introduction of a feed-in tariff. Previously, the high cost of solar thermal kits has put off householders wishing to invest in renewable energy generation but with the announcement of the introduction of feed-in tariffs for solar thermal in the UK in April 2011, solar thermal installation is set to become much more attractive.

The government’s feed-in tariff scheme to be called the Renewable Heat Incentive, will work by offering small-scale producers of renewable energy premium rates over a period of around 25 years for units of energy fed back into the national grid. Feed-in tariffs have been successful in countries such as Germany where they have proved to be an extremely effective way of off-setting the high costs of investing in solar power equipment.

Germany saw a massive uptake in all types of solar energy generation with tariff schemes rendering investments viable in the face of competition from traditional fossil fuel sources. For more information on how the tariff legislation is broken down year by year all of the information is available on solarfeedintariff.co.uk

In the UK, the essential figures are that homeowners wishing to invest in a typical £5000 solar thermal kit for their properties can hope to expect healthy returns on investment of around £500 p/a over a period of around 25 years not including the average £100 saving on utility bills per year. Such returns and savings are the basis of the tariff scheme and solarfeedintariff.co.uk is hopeful that these incentives will be sufficient to help the UK solar industry take off.

Through the installation of roof mounted solar panels, the sun’s energy is absorbed by the panel’s in-built technology which in turn is used to heat the water. The hot water is pumped through storage cylinders where it is heated further, providing households with south-facing roofs a good supply of hot water through the summer months and a contribution to water heating energy through the gloomier seasons.

Households aside, the government is also hopeful that the tariff legislation will bring about a grassroot change in attitude towards green energy as a whole and see technologies such as solar thermal become commonplace rather than an exceptional sight in the UK.

Solarfeedintariff.co.uk is already hopeful that with the obvious environmental benefits of utilising renewable energy sources along with the financial incentives built in to green energy schemes, the UK is set to follow in the footsteps of what are generally regarded to be the ‘greener’ nations such as Germany and Sweden. Households and community projects will all be set to capitalise on the feed-in tariff in the coming years with cash savings, investment yields and carbon emission reduction providing ample rewards for investors and communities.

When thinking about renewable electricity for your home, two options spring to mind; photovoltaic panels and small wind turbines. But which one should you choose? The government has introduced a feed-in-tariff that pays a subsidized amount for the electricity they produce and the amount paid for small wind turbines is similar to that paid for small PV systems (34p/kWh compared to 41p/kWh).

The key criteria to deciding which technology will be the most profitable is the cost of producing a unit of energy from each one. For this you need to factor in the up front costs such as equipment and installation, and then look at how much energy they will produce once out there over an average year. Without going too heavily into numbers my argument is that in some instances, micro-wind turbines will have a lower cost of energy than solar panels, but for the majority of cases solar panels will be better and this can be explained by some basic science.

Without a doubt, on a large scale, wind energy is cheaper than solar. The cost of energy from large-scale wind farms is somewhere around 10p/kWh whereas the cost of energy from large-scale solar is three to four times greater at present. Big wind turbines are now very well designed products and many years of industry development means that the costs have fallen dramatically and continue to do so. Big solar farms are also rapidly reducing in cost and make a lot of sense in some locations, particularly in the many regions where wind farms are not suitable, but for now they do not compete.

On the small scale however, the economics are drastically different. As the size of a solar installation decreases, the performance falls linearly with the amount of area used, and therefore the cost of energy does not change so dramatically. In contrast, as wind turbines get smaller their performance gets disproportionately worse. This is for two mains reasons:

The first reason is that as the turbine blade length gets shorter, the ‘swept-area’ decreases quadratically. This means that if you decrease the length of a blade from 80 meters to 40 meters, the area covered by the blade decreases from 20 thousand square meters to just 5 thousand. The ‘swept-area’ determines how much wind energy the turbine can use. So when you decrease the blade length you still need all the expensive moving parts like the generator, but you get disproportionally less energy – for one big wind turbine you would need thousands of smaller ones to cover the same area. The second reason is that where you use micro-wind turbines the wind speed is generally slower. This is because most of us live in built up areas where there are other buildings nearby. These buildings disrupt the wind, making it irregular and slow. Wind speed is crucial to the effectiveness of a wind turbine, again because the energy contained in the wind is disproportional to its speed. If the wind speed drops by a factor of 2, the energy produced by a wind turbine decreases by a factor of 4. Comparing most built up areas, the average wind speed is much lower than half the wind speed found high-up in open spaces where you find most wind farms.

These two factors combine to mean that for most homeowners solar panels are the most sensible and safest option. Of course, if you live near an open space and get a lot of wind then a micro-wind turbine could be a great investment. However, if you do live near a windy open space, I would suggest trying to build as big a wind turbine as possible, as their cost effectiveness increases dramatically with size.

With the UK government announcing the imminent introduction of a feed-in tariff for renewable energy generation, the UK solar industry is already seeing the development of a grass roots approach to solar energy.

Feed-in tariffs which have been established in other developed countries with the basic motive of attracting investment in fledgling renewable industries will be replicated in Britain with solar installers being offered premium rates (typically 25p/kWh over a project’s lifetime) for the units of energy fed back in to the national grid.

Such incentives are of course absolutely necessary in order to make investment in expensive technologies viable by offering attractive returns on investment to investors.

One of the first projects to take advantage of the feed-in tariff or ‘Clean Energy Cash Back’ scheme is a social housing scheme in Manchester which plans to generate around £900 per household a year by selling renewable energy back in to the national grid.

The Manchester based co-operative called Horizon Energy Corporative is working with landlords in the Manchester area to maximise the potential of solar energy in the Manchester region.

The scheme, put together by EIC has received the full support of the department of Energy and Climate Change (DECC) which hopes that such schemes will help the UK to catch up with other countries where feed-in tariffs have been established now for some time while at the same time offering financial rewards for social housing projects.

Managing Director of EIC, Andrew Melchior stated that,

“Our energy will be used to drive down the costs of electricity and hot water for those in need of relief from fuel poverty, while supplying community-generated energy to householders in North West England.

With sufficient support there is no reason we shouldn’t end up producing energy output equivalent to one quarter of a conventional coal-fired power station.”

In a bid to prevent a shortfall in rate payments for pioneers in small scale renewable energy investment, Good Energy has promised to continue to pay its generators 15p /kWh rather than the 9p / kWh set out in the recently announced tariff legislation.

Good Energy, dealing solely in renewable energy has announced that the government’s recent tariff scheme would harm their so-called ‘pioneer’ generators who installed their renewable technology before the cut-off date of July 15, 2009. Under the new tariff regime to come into effect in the Spring of this year, these pre -July 15 customers would only be eligible for a 9p/kWh payment for units of renewable energy compared to a payment of 41.3p/ kWh for installations after this date.

In a bid to keep pioneer installors viable until when they hope the government will amend their pre July 15, 2009 rule, Good Energy will continue to pay these generators the previous 15p/kWh rate. Currently, Good Energy sees itself as a market leader in renewable energy uptake incentivisation and wants to continue awarding attractive incentives for smale scale installors of renewable energy technology. Leading the way in 2004 with their renewable energy incentive scheme HomeGen, Good Energy believe that the government’s scheme is treating long term micro-generators unfairly.

CEO of Good Energy, Juliet Davenport, announced:

“It’s outrageous that the new FiT only pays the highest reward to new generators – Good Energy believes that the early adopters of microgeneration technology should also be recognised for their pioneering attitude and taking a lead.

That’s why we’ve decided to continue paying our existing accredited HomeGen generators 15p a unit for all the electricity they generate and lobby to change the government’s mind.

It’s outrageous that the new FiT only pays the highest reward to new generators – Good Energy believes that the early adopters of microgeneration technology should also be recognised for their pioneering attitude and taking a lead. That’s why we’ve decided to continue paying our existing accredited HomeGen generators 15p a unit for all the electricity they generate and lobby to change the government’s mind.”

With the details of the much anticipated (and much debated) UK feed-in tariff announced, discussions are already taking place as to whether the rates will suffice to kick start the fledgling solar industry in Britain.

With the UK as one of the last major countries in the EU to implement a feed-in tariff mechanism as a means of boosting solar investment attractiveness, we have already given the opinion on this website that the government seems to be taking reals steps towards a viable renewable energy economy.

Praise

Coming under praise following the government’s lengthy consultation process have been key features of the tariff mechanism such as 25 year lifespan which will help to secure investments, inflation linkage , and calculations that the average annual ROI for sub 4kW installations will be around 7-8%.

With European tariff models having already pioneered the way through trial and error, it seems that the UK government has taken heed of some of the potential pitfalls that can harm the effectiveness of feed-in tariff mechanisms.

Certainly, in their annual Solar Attractiveness Indices, Ernst & Young consistently look favourably upon those nations with strong, long term tariff rates which offer security and real value to money for investors. With the recently announced tariff details it certainly appears that everything is in place for a strong solar industry to develop in the UK as investors are enticed by the opportunities of this new market.

With a history of incentivising renewable micro-generators, energy suppliers, Good Energy are well aware of the benefits that can be achieved from the recently announced feed-in tariff system, with CEO Juliet Davenport commenting that,

“Good Energy has shown for many years that financial incentives work on a commercial scale, benefiting generators at minimal cost to the energy consumer when delivered effectively.”

Solar thermal potential

The announced details of a further thermal tariff to be implemented next year also seem to have exceeded most expectations with regards to the solar thermal industry in the UK.

Tariffs offered for micro-generation using solar thermal technology will significantly boost the UK solar thermal industry as Chief Executive of Micropower Council Dave Sowden has stated,

“We particularly welcome the significant boost given to heat technologies such as solar thermal and heat pumps, and the recognition by Government of the crucial role microCHP is going to play in reducing carbon emissions for those with gas-fired central heating,”

Criticism

Unsurprisingly, criticism has been voiced from environmental campaign group and strong advocates of widespread renewable energy use Friends of the Earth (FOE).

With the government having set a target of generating 10 per cent of its energy from renewable sources by 2020, there is a concern that not enough is being done to dramatically reduce carbon emissions. While solarfeedintariff.co.uk amongst others have been happily surprised by the tariff announcement, FOE maintains that the rates will not be sufficient to attract investment in the industry in the face of strong competition from abroad. FOE campaigner Dave Timms has commented that,

“Installing renewable technologies will now be a good investment for many homes – but farmers, businesses, communities and others will get little or no extra incentive to invest in clean electricity.”

FOE maintain that in order for the UK solar industry to take off, just as the German industry did, the return on investment will have to be more around the 10 per cent mark rather than the 6-7 per cent figure in order to attract the levels of investment required to render the industry viable in the long term.

Solarfeedintariff.co.uk believes that the UK has a great role to play in the future of renewable energy generation and that with the feed-in tariff in place, 2010 is going to be a very exciting year.

If you are interested in what the tariff could mean for your home or business, or want information on the investment potential of solar in the UK, this website will be regularly updated with news and investment products to meet your needs.

The UK feed-in-tariff announcement has generated a lot of interest in solar energy for homeowners. But what of the interest for organisations such as farms, businesses or local communities?

Some in the press have criticised the government’s proposed feed in tariff plans because they do not offer specific incentives to businesses as well as private individuals.

I would argue that the feed in tariff as it stands applies equally well to enterprises as it does homeowners. Businesses are often able to think longer term about investments. The incentives for installations above 50kW are still attractive for commercial roofspaces, especially if businesses use the electricity they generate for themselves, meaning that installing solar would be a prudent investment to have on a balance sheet. That is not to mention the kudos that comes with being a net exporter of green electricity.

In Germany the commercial rooftop segment of the market is the largest by volume, and with a feed in tariff pricing that now looks rather similar to the UK’s. We may therefore expect that companies start to explore using their roof space for PV. In fact if they haven’t thought of it yet, someone else will soon be approaching them with an offer.

That’s not to say the governments plans are flawless however. The UK is still pitifully behind the rest of Europe when it comes to renewable energy generation and particularly microgeneration.

Still lurking in government policy the ridiculously low target of 2 percent of energy coming from microgeneration by 2020. This is incomprehensible given that Germany is already at 4 percent from solar and other countries like Denmark with biomass gain nearly 40 percent from microgen. Surely this target must be revised!

Speaking as a professional in the global solar industry, the new UK feed in tariff has put us on the radar (a bit). Rather than smirking when I mention the potential for solar in the UK, my colleagues are now starting to take some interest…

After the long wait we finally know for sure the amount to be paid to producers of solar electricity under the clean energy cash back scheme. The result of a consultation process lasting 6 months, the initial outlook for solar energy in the UK is positive.

In comparison with the provisional figures released last year, there has been an across the board increase in the generation tariff paid per kWh for all sizes of installations. The table below shows the feed in tariff as they stand now;

There some important new features of the arrangement;

-         The export tariff (the amount paid when energy is fed into the grid) is reduced to 3p/kWh. This will increase the motivation for generators to use the energy for themselves since retail electricity prices are normally significantly more than 3p/kWh.

-         The lifetime of the FIT is 25 years. This is in line with other feed in tariffs around Europe and increases the attractiveness of solar (compared with 20 years) as it increases the security of the investment.

-         The feed in tariffs are linked to inflation. This means payments will increase over time in absolute terms. This is something that we had been campaigning for as ‘inflation risk’ is a significant worry that we have encountered in prospective solar producers.

-         The feed in tariffs can be legally assigned to any party. This allows room for innovative leasing models that are popular in Europe and the US where the either a third party leases roof space or a home owner leases the solar panels system.

Our initial calculations show that this level of tariff should result in 7-8% annual returns for homeowners retrofitting PV systems under 4kW. This means solar will compete with the best investment funds out there for investors pounds.

For Solarfeedintariff.co.uk this announcement represents a positive move by the government. It shows that during the consultation process it has listened to voices in the solar industry (hopefully including ours) and taken note of what is happening in the rest of Europe. Germany has shown that microgeneration, in particular solar PV generation can contribute very significant amounts of the nation’s energy and that a feed-in-tariff is the best way to encourage this growth.

Claims that have recently been made in the press that solar panels are merely ‘eco-bling,’ exhibit complete ignorance of what is happening in the rest of the world. Unfortunately this is a common attitude in the UK, the last major European economy to implement a feed-in-tariff. Hopefully, now with the tariff announced, this will change. We fully expect strong growth in the UK solar industry. This is a good day for Britain and our hopes of achieving our emissions targets.

Stay tuned for more updates.