When thinking about renewable electricity for your home, two options spring to mind; photovoltaic panels and small wind turbines. But which one should you choose? The government has introduced a feed-in-tariff that pays a subsidized amount for the electricity they produce and the amount paid for small wind turbines is similar to that paid for small PV systems (34p/kWh compared to 41p/kWh).

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.

On Friday rumours emerged that the German government is likely to significantly reduce the price paid for electricity produced by solar panels. Furthermore, the reduction may be made as early as April rather than in July as previously anticipated.

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.

If I had a pound for every time I’d heard that comment I’d be a rich man. That’s not to say it’s a dumb question though, it’s a perfectly reasonable question – it’s clearly sunnier in the south of Spain than in Blackpool. The question is by how much and does it matter?

At any given moment its not easy to predict how it’s going to be, but over the course of the year, the overall sunniness level can be accurately measured and predicted. This value is called the irradiation and can be defined as the amount of energy hitting a 1 square metre area pointed towards the sun over a whole year. In the south of England, according to the European Commission’s Joint Research Center, we get 1100 – 1200 kWh of irradiation per year (a kilowatt hour, kWh, is a typical unit of energy). In Devon and Cornwall you get between 1200-1300 kWh per year and in the North of England and Scotland its 1000-1000 kWh. In contrast, Barcelona gets 1700-1800 kWh of irradiation per year and in the very south of Spain and Italy it can get up to over 2000 kWh per year. So comparing London to Barcelona that’s 50% more irradiation for the Catalonians, which is significant but doesn’t mean we should give up hope for solar energy in the UK.

There are some other factors to consider here; irradiation doesn’t correspond exactly to the amount of solar energy you get out of a PV system. The best solar panels on the market today are only around 18% efficient under good conditions. At high temperatures for example, solar panels become less efficient. If the temperature of the solar panels increases by 20oC, they will only produce around 90% of the energy they would at room temperature. This means that on a clear but cold day in London, solar panels could produce more energy than a hot and sunny day in Spain.

Another factor is the difference between clear days and cloudy days. In the UK we get a lot of cloudy weather which blocks the sun and leads to ‘diffuse’ sunlight (meaning from all directions) rather than ‘direct’ sunlight. The four sunniest months of the year in the UK (May-August) deliver 5 times as much solar energy as the four winter months of the year (Nov-Feb). Solar panels can still turn diffuse light into electricity though, and there is evidence to suggest that some types of solar panels are better at collecting it that others. This means we may be able to improve the difference between London and Barcelona by using different technologies.

Despite these factors though, solar panels in Spain will of course still produce more energy than solar panels in the UK, which makes energy from solar cheaper in Spain than over here. But in some ways what happens in Spain is irrelevant, the question that really matters is whether solar energy makes sense or not in the UK.

I would say it does. With the feed-in-tariff, installing solar panels in the UK instantly becomes a highly profitable exercise yielding significantly better returns than most savings accounts (discussed in a previous article). Much of Germany, where over half the world’s solar panels were installed in 2009, is on the same latitude as the UK (northern Germany is in-line with Newcastle). So if it works over there, it should work over here.
The second point is that prices of solar energy systems are falling and electricity prices are due to rise, leading to so called ‘grid parity’ – the point at which solar electricity costs the same as regular electricity and can flourish without government support.

Because Spain is sunnier, grid parity is expected to happen there sooner than here (some claim it may have already happened in certain cases). Several predictions indicate however (in particular those from the EPIA – European Photovoltaic Industry Association), that we can expect grid parity in the UK as early as 2013 or 2014. In just a few years solar energy will be competing on real terms with retail electricity prices, hardly a waste of time in my opinion.

So the next time someone greets you with incredulity at the prospect of using solar panels in the UK, you at least have some numbers to back yourself up…

Solarfeedintariff.co.uk, the group of solar energy specialists dedicated to green issues and leading exponents of solar energy has announced that it will be offering a solar installation quotation service via its website.

To request a quote CLICK HERE

The service will help both businesses and homeowners navigate the often complex world of green investments by offering advice as to the best solar packages available.

With a broad range of experience in the solar photovoltaic sector, solarfeedintariff.co.uk is aware that many investors in solar panels are put off by the all too confusing array of products and technology available in the market.

Solarfeedintariff.co.uk will seek to eradicate any confusion and clarify doubts by offering the right product to customers depending on their needs.

Ian Spencer, Managing Director of Solarfeedintariff.co.uk stated that,

“Ever since the website was launched, we have had enquiries requesting quotes for Solar Installation, especially with the Feed In Tariff (FIT) due to be launched in April. WE are now delighted we can offer this services, using one of the leading Solar Installation firms in the UK”

With great opportunities available to reduce energy costs and of course, help slow the process of global warming solarfeedintariff.co.uk will be rolling out a service which will help both households and businesses save money, also taking advantage of the UK government’s Clean Energy Cash Back System, designed to incentivise investments in green energy through cash rewards.

With a vast array of products on the market, often from far away manufacturing bases in the far east, it can often be difficult for first time solar panel purchasers to discern the good companies from the… not so good and to calculate whether attractive looking offers are actually as great value as they first appear.

With a sharp eye on the market and with a passion for promoting solar installation in the UK, Solarfeedintariff.co.uk is keen to make the whole process of solar panel purchase and installation as smooth as possible, offering peace of mind to customers and promoting customer friendly, ethical companies.

Ian Spencer added,

“We expect the demand for Solar Installation quotes to rapidly rise the nearer we get to April and the dramatically increase on the Feed In Tariff is more widely recognised and known about. Therefore, we are pleased to be able to offer this service now for all of our site visitors”

To request a quote CLICK HERE