As the Government’s solar energy Feed in Tariff is reduced to 21p per kilowatt generated, and the 2012 deadline brought forward; consumers have been left confused as to what this means for the future of solar energy in the UK.

Save Energy Renewables, part of the Save Energy Group, has been in the renewable energy sector since 2002, long before the government feed in tariff was introduced in April 2010.  The introduction of the tariff, at 41p per kilowatt generated, was designed to kick start the take up of renewable energy in the UK and bring us in line with leading European countries such as Germany.  In its second year the tariff increased to 43.3p, but was widely regarded by the industry as high and unlikely to sustain.

The tariff is reviewed on an annual basis and was due to change again from March 31^st 2012, with much speculation as to what that might be.  The announcement came on the 31^st October that the new figure would be reduced to 21p, however, what the industry was not expecting was the 12^th December 2011 cut off point – fast-tracked from the original 2012 deadline.  Therefore, only solar PV systems installed and commissioned by this date would be eligible for the 43.3p tariff.  This put an unprecedented strain on the renewable energy industry, and will almost certainly result in many smaller companies, or those with a less than perfect infrastructure going out of business.

As to why this date was brought forward, lies heavily in the surge for ‘free solar’ with companies setting up to take advantage of the tariff by renting roof space from consumers who benefited from reduced energy bills, while they reap earnings from the tariff for the next twenty five years.  The budget put in place to assist homeowners simply ran out.

The new tariff rate of 21p is now set at a sustainable level for the long term. It will ensure the tariff is available for its predicted lifespan, until the cost of the energy rises to meet the percentage that can be earned through the tariff – namely grid parity.   Steve Randall, Sales & Marketing Director: “This is extremely good news and represents a very healthy 8-10% increasing return on investment for those who choose renewable energy as the way forward.  It also represents twice what can be achieved by the high street banks.  As a business we count ourselves among the lucky ones, with a strong infrastructure both logistically and financially.  As we have been in the business for over a decade we also have strong buying power with suppliers, savings we can pass to our customers.”

Solar energy has been embraced by the UK for many years due to the inevitable savings on energy bills.  The fact that the cost of energy will only rise will see consumers continue to do so with the added benefit of the feed in tariff which is all the more attractive here in the South which enjoys far longer hours of daylight than the North.

Steve Randall concludes:  “The best way for consumers to judge whether solar energy is for them is to look at their electricity bill today, and multiply that by the life of the tariff which is twenty five years.  The option is rent your energy at a rising cost per year, or take ownership of it today. There is further good news in the marketplace as we have seen product prices lower and level out, so when visitors come to our showroom we are able to share more attractive pricing terms.

steve.randall@saveenergygroup.co.uk

Yesterday saw an explosion in productivity at the rumor mill regarding the solar energy Feed-in Tariff (FiT) and it’s impending review. With sources from all over the industry and high exposure media such as Financial Times jumping on board the scaremongering bandwagon, let’s take stock once again and remember the facts of where we are up to.

To read the full article, click here.

The Feed-in Tariff Review

As we understand it, the Comprehensive Spending Review championing the government’s budget overhaul into spending includes a review of the solar FiT. The Department of Energy and Climate Change (DECC) is the authority on this matter, and only their official release will bring about the changes and outline to what extent cuts will be made.

One thing that figures from Ofgem are highlighting is that installation rates are much higher than what they anticipated. The current rates cannot be sustained at this exponential growth level. The boom is most certainly in full swing, and the bust now appears to be approaching in all its foreboding and unstoppable glory.

“Unless Earlier Action is Deemed Necessary”

The DECC, in speaking with industry sources has released the following statement:

“As we’ve previously said, all tariffs in the scheme are being considered in the Comprehensive Review and we will be consulting on proposals later this year. We’ve made clear that tariffs will remain unchanged until April 2012 unless the review indicates the need for greater urgency. There has been no announcement about the review so any rumors about its content are just that, rumours and speculation.” (Source)

In simple terms, nothing has changed at this point and we are no closer to understanding exactly when they will. The media storm has cracked through the sky, but the underlying realities of our situation remain. There is little doubt that the review will decrease the FiT rate by some extent, and also increasingly less doubt that the changes will be brought about before April 2012.

The only concrete truths the industry has to offer are that if you’re installed prior to the changes you will receive an enviable rate on your solar power for many, many years. If you do not, you won’t.

Written by Jarrah Harburn

jarrah@solarselections.co.uk

T: 0844 567 9835

© Solar Selections Pty Ltd 2011

The UK is in the midst of a race to install solar PV on its roof-tops from domestic dwellings to schools, hospitals, council buildings and agricultural sheds.  All this is being driven by the Feed- In-Tariff (“FIT”) that has been put in place since April 2010 by the UK Government, to support renewable energy generators to invest in technology such as solar PV.  The FIT provides an index-linked subsidy for power generated for 25 years, providing an ideal investment asset for pension funds and long-term investors.

Whilst roof-top solar no doubt has its place, an innovative company based in Scotland and Somerset, SolParks, has looked further afield and brought another variant of solar PV to the UK market – the solar car canopy.

The solar canopy is a structure built over a car parking space with solar PV panels mounted on its top. The canopies bring a number of direct user benefits such as shelter in poor weather, keeps cars shaded from the heat of the sun and can add further to user amenity, by adding in electric vehicle charging points (powered by renewable power, rather than mains) and using LED lighting under the canopies, which can be sensor operated, rather than large street lighting, to provide bright, safe car parking.

The power generated by the solar PV can be supplied direct to the car park owner, or can be supplied to the national grid.

The environmental and user benefits are obvious but also extend to easing legal issues between landlord and solar PV operator.

Elliot Roe of Solparks says “we researched the market for more innovative solutions for solar PV and found car park canopies in both France and USA, where the markets are far larger.   The benefits in the UK are obvious as well and we are innovating even further by using the FITs to enhance the financial benefits for users.”

Solparks is looking for installations of 12 car parking spaces up to 100.   Roe goes on to say “we can provide the installation to a site owner without any cost to them.  We undertake the planning consent, construction works, grid connection and pay for the canopies and solar PV.  The user in return receives discounted power and gains the benefits for their car park users.   The power they can’t use on site is exported to the grid.”

Using the power generated from solar PV on site can save the landowner power costs and can provide a valuable hedge against the threat of rising electricity prices. It also sends a strong, visible, message to customers about green credentials.

Roe says “ we are happy to work with any size of car park owner; however, an ideal customer would be one with multiple car parks. That way the customer achieves wide spread benefit, and the amount of power generated becomes a meaningful contribution to reducing their power bills.”

Solparks feels its solution offers much more simplicity for building owners.  The solar PV doesn’t compromise the core building, no structural surveys or reinforcements are needed and we can also accommodate re-development much more readily.

So why, given all these advantages, is the product limited to 100 spaces in any one location ?  Roe comments that “the changes in the FIT from 1 August make it very difficult, with the FIT alone, to achieve the sorts of levels of returns that are needed to fund a roll-out on a larger scale.  There are other commercial solutions that could be looked at to achieve much larger deployments however and we would be delighted to hear from any potential Solparks customer”

Solparks provides a fully turn-key service to those wanting to purchase rather than lease.  The service includes planning, grid connection, Ofgem accreditation, procurement of all materials and onsite installation. Solparks can also provide an ongoing operation, maintenance, monitoring and reporting service.

The Solparks product comes with a full 25 year warranty over the steel and PV installations plus a 2 year workmanship warranty.

And what of electric vehicle transportation ?    Solparks believes solar car parking can play a large role in the infrastructure needed for electric vehicles – both cars and scooters.    Roe says “adding charging points below the canopies, powered by the sun, is an easy next step and can provide further amenity to customers”.

Given the benefits, we expect to see many Solparks installations starting to appear, and provides large car park owners with another potential revenue stream from an asset that they already own.

For more information email elliot@solarfeedintariff.co.uk

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