Long before he became the Department for Energy and Climate Change’s chief scientific advisor, David Mackay lectured a course at Cambridge on how to perform back of the envelope calculations called ‘Order of Magnitude Physics.’  To teach the course, Prof. Mackay used a series of example calculations based on renewable energy.  Little did I know that the examples he was using would later become part of a book he was writing (and little did he know of the fame and career change that it would bring) but it was listening to these lectures during my undergraduate that confirmed my ambition to work in the solar energy industry.

Already extremely concerned by the growing evidence for ‘human-caused’ climate change, Prof Mackay’s course taught me some astonishing facts, such as how the amount of solar energy delivered to the Earth is ten thousand times the total amount of energy we use over the course of a year.   He made me realise that human civilisation has a huge amount of work to do to halt its greenhouse emissions, but he also gave me the hope through new technologies, we really can wean ourselves off fossil fuels without impacting our quality of lives too severely.

After a PhD and several years working in solar photovoltaics for a large company in Germany, I returned to the UK and was astonished to find that the Government has extremely low ambitions for solar energy and even more astonished that it is using David Mackay’s analysis, at least in part, to justify this.  At present, the Treasury’s £360m cap on Feed-in tariffs means that support for solar PV at all scales will end by mid-2012 and limit solar PV capacity in the UK to less than 3% of Germany’s current installed base.

When I re-read Mackay’s key book ‘Sustainability Without the Hot Air,’ I find it paints a very compelling argument for solar energy.   Prof Mackay repeatedly points out that solar energy can deliver far more energy than any other renewable energy technology in the UK, as illustrated by the fact that the amount of solar energy we receive in the UK is fifty times the total amount of energy we use, including transport and heating.  At the time of writing, David Mackay singled out two hurdles for widespread solar adoption in the UK; cost and space. It seems as though these hurdles have been interpreted by the Government as insurmountable barriers, whereas careful re-examination of these hurdles using up-to-date figures reveals them to be significantly less onerous than Mackay first assumed.

In relation to costs, David Mackay states ”it will be wonderful if the cost of photovoltaic power drops in the same way that the cost of computer power has dropped over the last forty years.” This is exactly what has been demonstrated over the last 5 years.  Jenny Chase, a solar energy analyst at the research firm Bloomberg New Energy Finance claims “In 2011 we expect an oversupply of solar panels which will put continued downward pressure on system prices.” In his book, David Mackay uses a solar electricity cost of €0.25 per kWh which is 4 times current wholesale electricity costs, but only twice the price of retail electricity, and seeing as prices have continued to fall exponentially since the time of writing in 2008 we can expect this gap to be closed fast.  In fact, the cost of solar energy is falling much faster than that of any other energy technology to the point where it is the expected to compete with unsubsidized retail electricity prices in UK latitudes by 2014/2015¹.  In contrast, the cost of nuclear energy has risen 5 fold since 1970 according to a recent study by Yale University’s Arnulf Grubler².  By supporting the solar industry now, it will soon be able to support itself without subsidy.

Digging deeper into the Government’s original modelling of overall ambition for PV, the Renewable Energy Association has found that a mid-range future fossil fuel price scenario was used which assumes a cost of $80 per barrel of oil in 2020 (which is unlikely considering current prices are frequently above $100).  By using such unrealistic forecasts, the value of investment in solar energy is being systematically undervalued.

The second issue that Prof Mackay raises is with the amount of area required to get large amounts of solar energy.  Whilst there is a vast amount of solar energy available to us in the UK, that energy is disperse, meaning you do indeed need to cover a considerable area in solar panels to cover our electricity needs.  Prof Mackay points out that to get our current electricity (50 units of electricity per person per day) needs would require 200m² per person.  This is a huge amount of area, but it’s important to realise that reaching that target is highly plausible.  The total amount of roof space per person in England is 47m², domestic gardens 114m², and roads and open spaces make up 60m² and 2300m² per person respectively³, so by using a proportion of roof space and a small proportion of open space we could certainly get close to 200m².  Its important to point out that open space does not mean prime farmland, there are many brown field sites that could be put to good use.  Nor do solar panels on open space prohibit the use of that land for other means.  When placed in fields for example, solar arrays can still permit some animal grazing and in other countries, solar arrays are often positioned along motorway banks or as canopies above car parks.

Obviously getting between 100m² and 200m² of solar panels per person in the UK would be a gigantean undertaking and one that would change the look of our country, but this would be just one of a long line of gigantean undertakings that have taken place in our history.  The expansion of organised farming, the construction of road and rail networks, and more recently the construction of electricity and mobile phone grids were all projects that have profoundly changed our country and its appearance.  Just because the task may be large, does not make it impractical.  In the UK we happily resurface 60m² of road per person every 5-10 years.

Solar energy has already proven itself highly popular in the UK.  It is one of the few technologies that can be produced effectively on a domestic scale giving power to families to generate their own electricity.  Solar energy can also be deployed staggeringly quickly.  In 2010 alone Germany installed 8GW of solar energy distributed among over 200,000 individual installations.  That is equivalent to over two nuclear power stations, and there is no way those nuclear power stations could be built so quickly.

There is a misconception that micro-generation does not result in large amounts of energy, but multiplied thousands of times, the amount of energy we can harvest from small solar installations is enormous.  The UK will of course need a balanced mix of different energy technologies, but lets give solar its rightful place alongside the other major forms of energy generation.  As Prof Mackay points out; ‘to complete a plan that adds up, we must rely on one or more forms of solar power. Or use nuclear power. Or both.’

Dr Toby Ferenczi is Chief Technology Officer of Engensa and a member of the Renewable Energy Association’s Solar Energy Steering Committee.

1. AT Kearney Report; ‘The True Value of Photovoltaics for Germany’ 2010
2. Arnulf Grubler, Yale University; ‘The costs of the French nuclear scale-up: A case of negative learning by doing’ Energy Policy, 2010
3. Department for Communities and Local Government, Land Use Statistics (Generalised Land Use Database) 2005, www.communities.gov.uk/publications/planningandbuilding/generalisedlanduse

Farmers and landowners in the South West should think about the opportunities being presented with the growth in renewable energies.

Sonya Bedford, Head of Renewable Energy at Stephens Scown, says as fossil fuels become more expensive and renewable energy gets cheaper, people could earn an extra income off their land, “Maximising land use to prepare for a future without oil is a very sensible thing to do, especially when subsidies are looking more and more uncertain with 2012 looming.”

The main forms of renewable energy are wind power, hydropower, solar energy, biomass, biofuel and geothermal energy.

She adds; “Renewable energy is ideally suited to rural areas and if you’re looking to diversify, mitigate climate change and earn an extra income then renewable energy may be the way forward. With the continuing and growing Government support for renewable energy, this is a development area that farmers and landowners can explore very seriously.”

By the end of 2009, worldwide wind farm capacity had increased by nearly a third during the year and wind power supplied over one percent of global electricity consumption.

Once the renewable infrastructure is built on the land in whichever form is most suitable, the fuel is free forever. Unlike carbon-based fuels, the wind and sun and the earth itself provide fuel that is free, in amounts that are effectively limitless.

Sonya says, “A wind turbine is now a much more common sight than it was and the wind power operators are on the look out for more and more land that is suitable. Landowners have an opportunity to earn additional income for each turbine they have on their land. Wind farms provide landowners with a regular income, generally for no additional labour or expense, usually for a period of 25 years.

The arrival of feed-in tariffs means there may now be profit to be made by generating electricity through photo-voltaic (PV) panels on barns/houses or commercial building roofs – the same can be said for the generation of electricity through wind turbines.

She adds, “More farmers and landowners are choosing to install their own apparatus, rather than relying on the companies to approach them for installation. The effects of increased generation of electricity will also mean that more farms and estates will be able to be completely self reliant when it comes to their energy needs.”

Biomass, another form of renewable energy, is being used by farmers both as a cash crop and to power and heat the farm itself. Biomass fuel can also include sewage sludge and animal manure and can be a useful way of using a bi-product which may otherwise be difficult to dispose of with the increasing regulations.

Hydroelectricity is generated by the production of power through use of the gravitational force of falling or flowing water. Micro-hydro can be cost effective if you have a sufficient flow and head of water on your land.

With the Nitrate Vulnerable Zone designations, the requirement for farms to increase slurry storage capacity over the next few years could mean that farmers look to Anaerobic Digestion (another renewable energy source) as an alternative option for manure management. The gas produced from anaerobic digestion can be used to heat or produce electricity.

Experienced solicitors at Stephens Scown are available to guide and assist you in making optimum use of your land. For more help or advice, contact Sonya Bedford on 01392 210700, email s.bedford@stephens-scown.co.uk or visit www.stephens-scown.co.uk

With many South West farmers looking to capitalise on the opportunities from renewable energy, Sonya Bedford from Stephens Scown looks at some of the key considerations you should make before rushing into an agreement for a solar park:

• Despite relatively tight timescales, don’t give into pressure and make sure you take proper professional advice before entering into a binding agreement.

• Be aware that some terms on offer are quite miserly – we’ve seen an option fee as low as £100 quoted. The commitment will be for a 25 – 50 year Lease (or possibly even an outright sale) and should not be entered into without proper remuneration.

• Bear in mind that it’s desirable not only to receive a simple rent under a Lease for your land, but also to obtain a share of the revenues from the sale of electricity generated on the site. You may also be able to negotiate an electricity supply for your own property, often for no cost.
• Be aware of any other development you might want to carry out on your land. Often leases and option agreements will include restrictions on developments adjacent to the site and which could have an effect on the performance of the solar PV arrays.
• Ask who will remove the equipment at the end of the lease and to what extent will it be removed at all?
• Seek professional advice about the potential tax implications. You may already have plans for mitigating Inheritance Tax, but granting an Option for a ‘solar park’ will impact on that, with reference to (where you are a farmer) the removal from agricultural use of some of your land.
• Consider the implications on any stewardship schemes you have in place – consent from Natural England will need to be obtained
• And if your land is mortgaged to a bank you will need to get consent to enter into long leases or sales.

Having said all this, there are exciting opportunities in the Westcountry where the solar resource is at its greatest and such opportunities should be seized, with a view to converting them into a 25 year income stream.

Sonya Bedford is Head of Renewable Energy at Stephens Scown. Visit www.stephens-scown.co.uk to download a specialist guide to solar energy for farmers or call 01392 210 700.

As a customer, its important to understand the process by which solar panels get from manufacturers to end users to ensure you’re getting a good deal.  In general, most solar panel manufacturers are big companies who produce in very large quantities. This means they generally prefer to sell to only a few large distributors in high volumes rather than have lots of smaller customers. This makes their sales process easier since managing many customers is very small time-consuming and costly.  The large distributors then sell to either smaller distributors or to installation companies.  The distributors aim to provide all the necessary components for installers, allowing them to buy in small quantities and providing technical support.

Examples of well known solar distributors in the UK are Dulas, Segen, Solar Century and Waxman.  Because the UK solar industry is so small and so new however, these UK wholesalers are very small compared to their European counterparts in Germany, Spain and France.  One of the biggest solar distributors in Germany, IBC Solar, will sell 500MW of solar equipment this year.  This compares to a total expected UK market size this year of 60MW! So IBC Solar sells nearly 10 times the total UK market, and is just one company!

Unsurprisingly, since the UK is now seen as an interesting emerging market in the solar industry, many of these large European distributors are moving over here.  I spoke to one last week that is investing 200 thousand pounds this year to set up a warehouse and employ a 5 person team to address the UK market. This is good news for UK installers because they will now have access to pricing that was only previously available to their counterparts in mainland Europe.  The UK wholesalers on the other hand may struggle to compete with such large competitors.

Competition is coming from all sides however, and there are now solar panel manufacturers who are moving downstream and becoming more like wholesalers. It is now possible for smaller installers to buy directly from a few of the European manufacturers, thereby bypassing the wholesalers and their margins.  To withstand this competition the big European wholesalers are trying to gain advantage by developing an array of advanced support services for wholesalers to win them over.  This includes things like credit lines, training and design software.

It is unclear whether these features will suffice since there is also competition from the big in-house installers.  In the US there is a very large installation firm called SolarCity which is going head to head with the wholesalers for marketshare, but does all installations using its own in-house team.  This has advantages in-terms of pricing and quality of service – there are no middlemen and they can guarantee the end to end service – the drawback is that growth is capital intensive and slow.

The market is evolving so rapidly it remains to be seen which business model will win out in the long run, what is clear is that there will be a lot of movement in the market – all of which is good for customers since it means prices will fall and customer service will improve.  So when choosing a solar panel system, try to find out where the installer buys their solar panels from, not just who the manufacturer is.  This will help you tell if you are getting a good deal or not.