This is important for PV systems because the inverter must convert direct
current into mains compatible AC with an acceptable voltage level. Inverters
are also designed to shut down if there is a problem with the grid for
safety reasons.

In Germany, the voltage level is very precise (perhaps as you might expect)
and since Germany is the world’s largest solar market by far, most inverters
in Europe have their settings with Germany in mind. This means that when the
grid strays slightly away from 230V, the inverter temporarily shuts down. In
the UK, the grid is much more likely to deviate from 230V, meaning that with
German settings, an inverter could well spend more time off than on.

Luckily the problem is generally easily fixed by changing the inverter to
new settings which make it tolerant to a wider voltage range. The key point
to remember is that with the inverter shortage, products are being sold
which are completely unchanged from their German settings. This means you
need to be extra vigilent when buying an inverter to ensure compatibility.

A related topic, that I will soon cover, is to do with how lots of solar
energy connected to the grid can actually affect the grid voltage and
frequency – but that’s another issue.

If an inverter is used in the UK without any change in settings then chances
are, with our fluctuating grid, you will have peaks or dips in the voltage
that shut off the inverter from time to time. The solution is simply to
change the settings via the firmware to allow the inverter to carry on
working in a wider range of voltages.

Solar panels produce direct current (DC). This means you need an inverter to turn that electricity into mains frequency alternating current (AC).  Inverters come in a range of power ratings. The more solar panels you have, the more power the inverter has to deal with, so the size and cost increases. It’s very important to match the size of the inverter to the number of solar panels.

If the inverter is too small, you will lose out on some of the energy that your system produces. If it is too large, the inverter may not perform at its optimum efficiency, and you will have paid for more than is necessary. In the UK, the optimum situation is to have an inverter that is rated at 80% of the power rating of your PV system, since it is rare you will be producing at 100% power.

More critically than getting the power right, you need to ensure the voltage and current of your solar panel system remains within the input range of the chosen inverter. To re-cap, solar panels on your roof are generally connected together in series, in a ‘string’. This increases the system voltage, but does not increase the current. Once a certain number of solar panels have been connected in series, the voltage will become too high and the system needs to be arranged in two strings, each of the same number of panels, connected in parallel. This generally occurs after a string exceeds 8 – 11 solar panels. When strings are connected in parallel, the currents add-up, but the voltage remains constant.

By adding more and more strings in parallel, the current and voltage can be controlled to remain in the inverter limits. For large solar installations, inverters can used that that have a very high power capacity, or alternatively it is possible to use many small inverters connected in parallel.

It is important to remember certain constraints. Inverters come in several sizes, but there may be some numbers of solar panels for which no inverter is ideal. For instance, because it is necessary for all stings to be equal in size, you can only use an even number of solar panels when using multiple strings. In addition, all solar panels must receive the same amount of sunlight when connected to the same inverter. It is no good to have some solar panels facing different directions on different parts of the roof. New technologies, soon to become widely avaialable that will make this process much easier. Namely micro-inverters, which convert DC to AC at every solar panel, will mean that solar panels can face different directions, however these are not yet widely available.

If you have a sales visit from a solar company, make sure the salesman understands these points as he’s designing your system.

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.’

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How much does it cost?

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What Is The Return?

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For solar energy, there are many different types of fluctuations. In the UK for instance, winter months produce only a quarter of the amount of energy as summer months. Obviously solar energy production takes place only between dawn and dusk, and even during the day, clouds can cause major fluctuations in solar energy output. These fluctuations make it hard for electricity grid operators to really use renewable energy since they need to guarantee power is delivered 100% of the time.

At the moment, because renewable energy makes up such a small component of our electricity generation in the UK these fluctuations are irrelevant. However as the proportion of renewables connected to the grid increases these effects will eventually become more significant. In southern Germany, where solar energy makes up over 4% of the electricity generated and at times represents 30% of the electricity on the grid, energy companies are starting to think carefully about how to use this resource most effectively.

Several can be done to decrease the impact from these fluctuations in renewable energy:

The first thing is to have a strong and efficient electricity grid. This is the case in Germany where energy can be efficiently and almost instantaneously moved from one part of the grid to another. This means that when there is a surplus of energy in one part of the country, energy can be transported at very short notice to where there is an energy deficit. Interestingly, as the amount of solar energy in a country increases, short term fluctuations caused by clouds are “ironed out” as shaded solar panels in one region are compensated for by unshaded solar panels in another.

In addition, as some of you may have heard, there is something called a ‘smart grid’ in development. This term is used to refer to lots of different things but on its most basic level it implies that energy demand can be controlled in some way. This could be very helpful for renewable energy since energy demand can be matched to when there is an abundance of solar energy in the middle of the day.

Another tool that can be used is prediction mechanisms. Using weather forecasting and remote monitoring, the amount of solar energy expected can be predicted. Providing this information to energy companies allows them to use various forms of reserve energy such as gas turbines or hydroelectricity which can be turned on and off in a matter of minutes.

The ultimate solution though, is to find a cheap means of storing energy. This would make all the fluctuations from renewable energy irrelevant. Researchers around the world are busy working on a wide range of different energy storage technologies. One of the most familiar ways of storing energy is to use a battery. Regular alkaline batteries are far too expensive and not durable enough to be used on a large scale, but there is huge number of new types of battery being worked on that could soon bring the cost down dramatically.

Besides batteries, there is a wide range of other technologies in development that could all be used to store renewable energy. Examples of these include; compressed-air energy storage, pumped hydro-electricity, molten-salt, fly-wheels and hydrogen, to name a few. Of course each technology has advantages and disadvantages, but it remains that we have a number of potential solutions for storing renewable energy. So the fact that the sun doesn’t always shine is certainly not a reason not to support solar energy.

“The poor old cottage industry of renewable energy will not know what’s hit it. People could be forgiven for waiting to install these technologies up until this point, but once the tariff comes in, things could change rapidly,” states Harris who certainly knows how difficult it has been to bring about a change in attitudes towards the viabilty and importance of green technologies.

Harris who along with his colleague Bill Dunstar created the BedZed village project featuring carbon neutral housing in the Surrey commuter town of Wallington ten years ago can easily recall the derision which green ideas were met with at the time. The project which was shortlisted for the Stirling Prize in 2003 highlighted the potential feasibility of sustainable materials and carbon neutral building at a time when such ideas were far from the mainstream. Harris recalls,

“It’s amazing when you sit in meetings now; people are saying exactly the same stuff that was laughed at when we were starting BedZed. Back then, things such as using reclaimed materials, sustainability assessments, local sourcing, having an ecological footprint… they were just not on the construction agenda, let alone the housing agenda.”

With the introduction of the feed-in tariff at the beginning of next month the situation has changed dramatically for micro-generation projects such as BedZed pioneered by Harris and Dunstar. The tariff will offer small-scale generators of green energy guaranteed, premium rates for energy fed-back in to the national grid and will thereby seek to offset the obvious costs involved in installing renewable technologies. With annual returns of £500 expected for households with solar PV installed, the industry is hopeful that the solar industry has the potential to take off with the backing of the tariff.

Steven Harris certainly believes that solar micro-generation could become widespread with the tariff mechanism incentivising investment and see the BedZed project become reality within the next decade.

“Solar technology has really moved forward. In China, it’s illegal not to put thermal solar on your roof, but they have the advantage of a totalitarian state. The fact that they have to manufacture panels for billions of people has really driven down the cost of solar. I know when we first started BedZed, the payback on a panel was around 75 years; now it’s about 12.”

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.

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.

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.

We expect an official announcement this week and will update you then but the rumours alone have already sparked hefty losses in solar energy stocks around the world. This is not surprising considering how large a proportion of the world solar market Germany represents. In 2009, close to 4GW of solar energy capacity were installed. The next biggest markets, Italy, France and the US were a maximum of 1 GW each. If demand drops significantly in Germany, it could lead to more pain for solar equipment manufacturers.

Personally, I believe a significant reduction in Germany’s feed-in-tariff is a good thing for the industry. Things got out of hand in 2009 as installers and manufacturers (particularly inverter manufacturers) struggled to meet demand. Everyone wants the solar industry to grow, but it must be stable growth. Too much too soon and there isn’t enough time for problems to resolved.

For example, in the southern part of Germany, solar energy makes up close to 5% of all energy production now. This is already causing problems for the electricity grid because of the intermittency of solar power. If solar energy were to grow more slowly, these problems could be dealt with as they arise.

The other problem of the feed-in-tariff is that it was making people too rich. Solar farms in Germany are providing 10-15% annual returns virtually risk free. No hedge fund can offer that. Given the risk of a solar investment, the return needs only to compete with long-term savings accounts, so if they provide just a 4% return, that should still be attractive. It is hard to predict what the effect of the drop in feed in tariff will be. Certainly, if the return on investment is lowered, there will be a reduced incentive and less of the ‘urgency’ which gave rise to the boom of last year. However, if there is still a reasonable, positive return on investment, then large numbers of people will still take up the opportunity. If someone handing out 20 pound notes switches to giving out 10 pound notes, would people start walking away?

On the verge of releasing details of the UK feed-in-tariff, what does is the message for UK policy makers observing this 17% cut? Why should they listen to the voices calling for an increase in the tariff whilst all our neighbours are busy cutting theirs? I would ask the government not to waiver in their commitment to growing the UK solar industry. The market in Germany is one thousand times greater than that of the UK (4 gigawatts compared to roughly 4 megawatts last year). The Germans have created an efficient industry with that is able to provide solar installations at competitive prices. The UK industry has not got off the ground yet. We must provide a decent incentive so that people begin to accept the concept of solar energy in the UK.

The experience of Germany shows that subsidies do not have to be provided forever, however the industry must be there before you can scale back.

My message to policy makers is this; we have a lot of catching out up to do, so don’t lose your nerve before we have even started.