The concept of Grid Parity has always been the ‘holy grail’ within the solar industry with solar supporters extolling the need for government action in order to ensure that the photovoltaic (PV) industry evolves into a viable competitor to fossil fuel producers. Detractors of the notion of a possible grid parity have traditionally asserted that solar will never compete with fossil fuel energy on price because of the costs associated with installing and maintaining PV plant.

However, the recently passed feed-in tariff legislation which offers solar energy producers a premium rate for energy they feed back in to the national grid will prove to be extremely effective in attracting investment in the solar industry. Speaking about the solar naysayers among the energy industry Jeremy Leggett commented,

“The chief executive of British Petroleum said that solar will never be economically viable without technological breakthroughs. He is going down the road saying that, we say it will be on cost parity with electricity by 2013. We are going to find out who is right.”

Certainly with recent reports from America that two-thirds of the United States will achieve grid parity by 2015, the future seems to be mapping out truly in favour of solar energy on both sides of the Atlantic, a situation which won’t go unnoticed by investors looking for long term investment yields.

Also at the event, Joan Ruddock, acting as spokesperson for the Department of Energy and Climate Change (DECC) announced that the government would strive to reach its carbon reduction targets through a specific focus on “small-scale renewable technologies, such as solar PV”, going on to add,

“We know that it is not just a case of generating ideas and many of you have pushed for greater incentives, so we are introducing what is going to be called a clean energy cash back, that is much easier for ordinary people to understand than a feed-in tariff for people in these difficult economic times and it will be important to encourage people at this time.”

Feed-in tariffs work by offering fixed, premium rates for electricity fed-in to the grid by small scale solar energy producers. Over a period of 20-25 years the feed-in tariff (FIT) contract offers a return to solar investors thus greatly increasing the installation of PV plant. In Germany, for example where the tariff has been extremely successful in attracting investment there have been other market advantages such as job creation in the solar industry and of course a sharp rise in solar equipment manufacturing.

Members of the UK solar industry are now increasingly optimistic that the government FIT will generate a successful solar industry across the UK. As Clive Collison, head of Action South Facing a Hertfordshire based solar installation firm commented,

“We are very excited about this. We are now getting all sorts of inquiries from companies, local authorities and individuals. But nothing is guaranteed. We don’t know the level it will be set at yet and the big energy companies are still lobbying against it.”

With big conventional energy producers lobbying against solar energy legislation and a lingering support for nuclear power, it will be essential that the government seizes the opportunity this year to set up a FIT which offers real possibilities for a vibrant PV industry in Britain. With Gordon Brown’s commitment to the ‘Green New Deal’ with planned job creation and economic revitalization by means of the renewable energy industry, it is expected that the UK will reap the benefits of a strong tariff mechanism. Jeremy Leggett, Chairman of Solar Century has added his wait to the debate by pointing out the dangers of missing the boat on effective PV policy,

“UK plc will essentially have to sit and watch as other countries create jobs, tax income and energy security in one of the fastest-growing industries within the emerging green industrial revolution.”

The conference series, which attracted over 1000 attendees in 2008 will be sure to attract similar hordes of attendees as awareness of the market feasibility of the solar industry has become more widespread over recent months. The Solar Economics forum will provide those within the industry with an opportunity to meet manufacturers, installers, government representatives, banking and financing experts and many more key industry players at the London forum.

Key speakers will include:

Peter Hain, MP- Former Energy Minister & Member of Parliament

Hans-Josef Fell – Member of the German Parliament and Vice- President, EUROSOLAR

Jeremy Leggett – Executive Chairman, Solarcentury

Andrew Marsden – Managing Director Europe, GE Energy Financial Services

Jerry Stokes – President, Suntech Europe

Chris O’Brien – Head of Market Development, Oerlikon Solar

For full information on this conference and how it could benefit anyone involved in or wishing to learn more about the industry and its prospects, please visit:

http://www2.greenpowerconferences.co.uk/v812/Prospectus/Index.php?sEventCode=SP0906UK

Dr. Zhengrong Shi, Suntech’s Chairman and CEO, Jeremy Leggett, Executive Chairman of Solarcentury, Mike Ahearn, Chairman and CEO of First Solar, and Achim Steiner, UNEP Executive Director strongly advocated solar energy as a viable energy production solution which should be taken up by governments around the globe:

“Solar technology is no longer a niche energy solution, but is already reaching the scale and cost points to fundamentally change the way we generate electricity. As a result of substantial investments over the past 5 years, the solar industry has dramatically improved solar technologies and established roadmaps for further cost reductions. In fact, electricity generated from solar installations is already reaching parity with peak energy and retail energy prices in many regions.”

The conference concluded that the following objectives are the key to meeting GHG- reduction and economic-development goals:

·          Stringent, ambitious, international and national carbon regulation policies

·          Enforceable renewables mandates with a solar carve out or credit multiplier for solar energy

·          Near-term incentives that could include feed-in tariffs, partial rebates, tax credits and/or property-based loans

·          Favourable net metering, interconnection, permitting and land-use policies.

The recent UK Energy Bill will certainly have pleased the consortium as it gives provisions for the implementation of feed-in tariffs by 2010 which are seen as being fundamental to the setting up of a coherent renewable energy solution. The plans are for the government to guarantee a fixed, premium rate for energy fed back into the national grid by small, renewable energy producers and will be essential to the UK meeting its climate change goals.