Solarbuzz, the market research group which focuses on solar photovoltaic (pv) has released its UK pv market 2010 report and highlights strong growth potential for the year ahead. Indicating the link between the market and the feed-in tariff legislation, Solarbuzz predict that 2011 will see a surge in solar pv installation as investors look to tap into the government’s tariff scheme.

With a focus on such factors as market segmentation, market size and tariff rates the report has highlighted the continuing growth of the infant solar pv market in the UK. Alan Turner of Solarbuzz said,

“The early entrance of big name brands are helping to lend public confidence to what is generally a poorly understood renewable energy source in the UK,”

The Solarbuzz market report has highlighted the following trends for solar pv:

• The south east accounts for 45 per cent of residential solar pv installations in the US
• 2011 solar pv figures will be hugely impacted by emerging agricultural and industrial projects
• Big name brands entering the solar pv market will easily meet the growing demand for solar installations

According to a Solarbuzz market report, solar investment in the Czech Republic increased 17 fold since 2007 due to the strong feed-in tariff there. Last year 50.8 megawatts of solar plant were installed in the Czech Republic compared to just 3 megawatts in 2007 representing a huge increase in solar investment. The Czech solar market, although still small compared to the European renewable giants Germany and Spain, has grown exponentially since the introduction of a feed-in tariff in 2005.

The Czech feed-in tariff has been extremely successful at attracting investment as it pays the highest rate for renewable electricity of any other European tariff. Currently set at 12.79Koruny per unit of energy fed-in to the grid (44p), the rate makes solar investment a very viable option for investors looking to diversify their portfolios by moving towards green shares. In the light of the recent economic downturn and the drawing in of purse strings in most sectors, solar offers investors a yield on their investment protected by government legislation. The Prague government has set itself the target of reducing its carbon emissions by producing 8 per cent of its energy by renewable means by 2010 and will therefore look to protect the solar industry within its borders.

While the Spanish solar market is still 48 times bigger than that of the Czech Republic, the Spanish sector has experienced a slowing due to the reduction of the rate of its feed-in tariff when the 500 megawatt cap was reached bring the rate paid down from 0.42 euros to 0.32 euros. This fall in the feed-in tariff rate was reflected by a marked reduction in Spanish solar plant and provides a warning to governments looking to sustain a boom over a long period. Jenny Chase of New Energy Finance commented that,

“I know some developers that were in Spain are now in business school because the market’s over, and some have moved to the Czech Republic”.

The Spanish example of the shrinkage after the initial 2007 boom will provide a warning to governments looking to implement their own feed-in tariffs in the near future. Certainly, the Department of Energy and Climate Change (DECC) will implement the feed-in tariff in the UK by the end of 2010 and are currently undergoing consultancy as to how to finance the tariff. Industry insiders have petitioned the government demanding at least a 40p/unit rate for electricity fed-in to the grid over a long term period of around 20 years. The Czech government have been extremely successful thus far and will continue to use their tariff system to attract investment in solar.