After the official commencement of the UK feed-in tariff on April 1^st we were surprised by the relatively mute response that it received in the UK media. The event did get some press coverage, but the general impression given was that this was just another green initiative, rather than the introduction of a program that has caused a major renewable energy boom in every other economy where it has been introduced.

Since then however, signs have been emerging that there is an ever increasing wave of companies entering this market, and that solar energy in the UK is getting interest from international investors.

As you may well be aware, qualifying for the feed-in tariff requires an MCS accredited installation company. Newly qualified installers have been added to the MCS list every day since April now and the range of companies now offering MCS solar installations is very broad. Some companies are one man, local electricians whilst at the other end of the spectrum are large energy companies such as E.On with thousands of installers, there is a large choice for those wishing to have solar panels installed.

One trend to look out for is the increasing number of professional investors who see an opportunity to make money from the feed-in tariff. By paying for a solar installation on a rented roof or field, investors can have access to the feed-in tariff revenue. Owning the PV system can provide up to 10% annual returns over a 25 year period with a high level of security.

Quite how these arrangements will work is not yet clear. There are a number of ways the contracts between the investor and property owner can be written, and great care to needs to be taken to ensure that all liabilities are covered in the case of a property sale or an accident. Despite this, a number of companies are exploring this type of agreement for the UK, which is already very common in the rest of Europe.

For land owners or property owners with suitable roofs, leasing space for solar panels can be a very attractive option. It requires no upfront investment, generates significant revenues, carries little risk, and improves the environmental credentials of the building. A property owner might earn more money if they own the solar system themselves, but that would require significant initial capital expenditure, something which many companies may not be able to afford.

The feed-in tariff is obviously very attractive to investors as there is little risk. Once you are in the scheme, the payments are guaranteed for 25 years. Photovoltaic systems are generally reliable, so long as you use good quality products. Solar panels are guaranteed for 25 years (to 80% of their power production) and inverters usually for 10 years (you should expect to replace an inverter at least once in the lifetime of the installation). Other than this, the only risk is that the sun will stop rising each day, and if it did, you’d have something a bit more serious to worry about than your profits…

If you would like to invest in a photovoltaic system, or have a suitable roof that you would like to rent, you can contact us for more information.

The rate of photovoltaic installations in Germany has continued at a faster than ever pace during the first two quarters of 2010. Far from slowing down after the record 4^th quarter in 2009, installation of solar panels accelerated through the new year. Accurate projections are hard to make, but there are suggestions that the market volume in the first half of this year could be 4 gigawatts. This is likely to make 2010 another record year for Solar. This demand has been fuelled by the discussions surrounding the reduction in the feed-in tariff in Germany, which has now finally been decided. At the recent Photon PV Technology Show in Stuttgart, there was much discussion surrounding how the PV market would continue to grow despite the feed-in tariff reduction. Many were optimistic that the market may be unaffected the changes.

The scale of activity means that Germany’s dominance of the world solar market remains. In 2009, over 60% of the world’s solar panels were installed in Germany and it is likely that this trend will continue in 2010. This is having a big impact on markets in the rest of Europe. There is currently an extreme shortage of inverters for commercial and domestic rooftop installations and there are also reports of shortages of solar panels from the leading manufacturers.

This shortage is being felt across the UK PV industry. As demand in the UK steadily grows, installers are finding it more challenging to source the right products in a short time period. Many installations are being carried out without an inverter, meaning that customers are forced to wait several weeks for the inverter to arrive and they can start collecting the feed-in tariff. If you are considering getting a PV system for your home then make sure to ask your installer about their lead time for products.

Fortunately there should be an end to this shortage. The inverter manufacturers have been working very hard to increase manufacturing capacity, and some of that new capacity should be coming on-line later in the year. After the feed-in tariff change in Germany in July demand is expected to reduce to some extent which should free-up availability for the rest of Europe. SMA, the world’s leading manufacturer of inverters with a market share of close to 40% are expected to resolve their supply issues by the end of the summer, meaning that their highly sought after small inverters, the SunnyBoy series, become significantly easier to come by.

This will be important for the UK. Prices of PV systems in the UK are still significantly higher than in the rest of Europe. The shortages prevent new wholesale distributors from entering the market and keep costs high. As the market becomes less supply constrained we expect that the industry will become more competitive, allowing an advancement in price reduction. With the great feed-in tariff we have now, any cost reductions mean better returns for the customer, and will hopefully motivate more people in the UK to ‘go solar.’

We have teamed up with one of the UK’s leading Photo Voltaic installer and Distributor to enable us to offer you this amazing Solar Investment.

This company is enabling UK investors to take advantage of a new opportunity unlike anything previously accessible, which will appeal to individual investors, savers, businesses and financial institutions alike

You can now purchase an investment-grade, high-yield Solar Power System (SPS) along with the UK Government-guaranteed right to income from the energy it produces.

How much does it cost?

A single payment of £16000 (plus VAT at 5%) gives you ownership and the rights to any income generated by the SPS for up to 25 years. If you choose to retain ownership for the full term, the payments you receive would repay your capital outlay and produce an additional average return of 7%.

What Is The Return?

Through the SPS, investors and savers can gain a guaranteed income for 25 years which is index-linked and will provide an average return of 7% per annum, by taking advantage of the government’s Feed-in Tariff Scheme (FITS) scheme, also known as the Clean Energy Cash Back scheme, which came into effect on 1st April 2010.

Click Here For More Information

George Monbiot’s recent guardian article got me thinking about the nature of research and development in the photovoltaic industry and how R&D has been impacted by feed-in tariffs in Europe.

Having worked in photovoltaic research both in a university laboratory and industry I have some experience of R&D. The field of photovoltaics certainly falls into the category of applied research, meaning that the ultimate goal is not only to gain new knowledge, but to bring new products onto the market that improve the world around us. To achieve this however, there is a long journey that must be undertaken – getting a new technology onto the market is a multi-stage process.

Of course every new idea is different, and no new technology undergoes the same journey (whatever people say, there is no clear line between the terms ‘research’ and ‘development’). There are some features however, that are common in technology commercialization processes:

At the beginning is painstaking fundamental research in a laboratory. This may not even involve making a prototype but for example may simply consist of measuring an effect in some new material. Many, many ideas are proposed, tried and rejected for every idea that makes it past the first step. This is the most creative part of the process, which is why it attracts so many brilliant minds, but the most that can be achieved here in real terms, is some suggestion that a concept has a chance in the outside world.

From the initial conception of a new technology, extensive tests must be carried out in the lab to show feasibility of the idea. Once all the tests that can be done in a laboratory have been done, it is time for the research to outwards and beyond, and into the development stage. The challenge is to take the small-scale prototype closer and closer to what might be considered a real product using a real manufacturing process. In the photovoltaic cells, those made in the laboratory are often tiny (smaller than a postage stamp) and fabricated using methods that are totally unsuitable for large-scale production.

Laboratory research however, is relatively very cheap compared to the later stages of development. The big hurdle for scientists is to find the money to pay for the next step in the development journey.

Whilst more money in basic research is always welcome, there are a number of defined funding bodies that scientists can apply to for laboratory research. UK universities have so far been fairly successful in attracting funding to expand research for renewable energy research in recent years. What is much less clear however, is who will pay for the later stages of development when a technology is ready to leave the lab, but still has someway to go before it is proven on a large scale. Often there are a lot of big technical challenges to go from small to large-scale manufacturing, and one can never be sure that it will be viable at all until you try. With new types of solar cells, often this expansion happens in several stages, with multiple, progressively larger production lines being built. It can get VERY expensive.

This gradual scaling up of a laboratory process is not usually paid for by government sponsored R&D programs – building a manufacturing plant is seen as a commercial exercise. Scientists are therefore forced to go to the private sector and do battle with venture capitalists and the like to get the necessary funding. For this reason, many promising technologies never make it out of universities at all.

The painful truth is that the scale-up process is absolutely critical to getting a technology onto the market. Without this step you may as well not have bothered inventing the technology in the first place. I know from experience that there are hundreds of extremely exciting new types of solar cells sitting waiting in laboratories around the world. The bottleneck is and always has been raising finance for the expensive scale-up process.

In the last few years however, since 2004-5, there has in fact been a remarkable inflow of venture capital money in solar energy. Certainly not all, but many solar companies have managed to raise money to take their technologies from the lab to manufacturing. Venture capitalists (particularly from Silicon Valley) and corporations across the world have poured billions into the hands of solar cell scientists to take their technology on to the next step.

What caused this sudden surge in investment in solar energy? Certainly it wasn’t a shortage of revolutionary ideas for solar cells – the concepts that were given financing have been around since the 1970s. My belief is that it was a direct result of the German feed-in tariff that was implemented in its current form in 2004, shortly before the investment frenzy began.

Almost overnight, Germany became the single largest solar energy market in the world, and has remained so ever since. In 2009, over 60% of all the world’s solar panels were installed in Germany. The feed-in tariff guarantees a market for solar energy products and this is exactly what investors are looking for to reduce the risk of a new technology. There will always be technical risk, but the feed-in tariff means that at least if a new technology does work, investors can be sure there will be someone to buy it.

Many of these internationally funded new solar panel companies decided to build their first production lines in Germany. Examples of such companies are First Solar, Nanosolar, Avancis, Q-Cells, Sunfilm, Signet Solar, ErSol, Johanna Solar… I could go on. Each of these companies has raised hundreds of millions of dollars to build factories that produce new types of solar panels. Even the companies not located in Germany have all open their first sales office there.

Of course not all these companies will be successful, in fact Sunfilm recently announced it would go into administration, but that is the nature of developing technologies. The process of designing and inventing a new factory, and then using it to make good reliable solar panels takes such a long time. Despite this, First Solar has just entered the S&P500 with billions in annual revenue, and several others are in their footsteps. There is risk, but without trying you don`t have a chance. The prize is great for those who succeed, and often the experience an expertise gained in failure is not without value.

My opinion is that the feed-in tariff is great for encouraging investment in the scale-up stage of R&D, which is very poorly funded in the UK. Laboratory research will continue, and governments should not cut back spending on universities. However, if a government wants this early stage research to eventually make an impact on the economy, they have to find a way to support expansion stage R&D, and introducing a feed-in tariff is very good way to do this.